How much power does that paint job require, and where do you plug it in?

I would add "You can't afford to put 20% down" to the first list.

@GitEmSteveDave_SavingsTime: i agree, but i like it!

Why would anyone have a hard time absorbing that list? I mean, would you buy a car if you didn't have a driver's license and had no idea how to operate a motor vehicle? No?

Then yeah, don't try and buy a house if you hate fixing things, are already in debt, and don't know how long you want to live in the town you live in.

Hm. The ratio thing is interesting. Considering that a nice two bedroom/two bath w/parking runs roughly 1800 in places like Bucktown and Lakeview in Chicago, it seems as though the market pricing ratio 425,000/21600= 19 percent. Does this actually mean pricing is actually in line? I actually suspect it's not pricing keeping people from buying so much as it is fears of unemployment.

@UrIt: I think I lived down the street from it in San Francisco years ago. About a block to the right of the picture.

@thesadtomato: Buying a house currently as a fixer-upper is a great way to receive a return on your investment. I bought my house so far under what most houses in my area were going for that Even if I sold tomorrow I would recoupe my losses.

And who the hell likes to fix things? Now updating is fun, but fixing somebody elses fuck ups? That's not fun but it is required.

@GitEmSteveDave_SavingsTime: You mean that's not your place?

They should add "be willing to back out if your mortgage guy changes the terms at the last minute". Seems obvious but when you're young and excited you can get seriously screwed.

@floraposte: When I lived in Park Slope, Brooklyn, I frequently passed by this brownstone. I always wondered exactly how much the neighbors hated whoever owned it.

@Chris Walters: Oh just to be clear, I'm referring to the second building from the left.

@FatLynn: In general, I agree - but personally my husband & I are in the process of buying a home with 100% financing with a "physician loan" - if we had to wait until we've saved 20% to put down, then it would be a few more years to get a house we like - additionally, less $ invested in the house, more I have to put into other investments.....

@Chris Walters: Is that the new Barbie Brownstone by Matel?

@hillsrovey: And if prices drop, you are stuck.

@Trulymadlyme: The article says that 10-14 means it is "in line". Approaching 20 is overpriced.

@Chris Walters: I don't know. They say taupe is very soothing.

(and the movie played twice this weekend and I watched it both times.)

Our current five year plan ends with "buy a house". I don't know where we will be living in five years from now- it depends where I find work- but my wife and I have resolved not to look for houses until we have all our credit cards paid off and we can put 25% down.

@GitEmSteveDave_ H1N1 Symptoms List:
[img.groundspeak.com]

I used to walk by that house all the time in Philly And wonder how the hell the city let him do it.

@Magspie: Or, even simply... understand the terms and conditions of financing a loan and what to expect if you don't have a fixed-rate one.

@FatLynn: if prices drop you you lose regardless of how much money you put down. I fail to see your point?

You honestly get better deals not putting anything down right now since interest rates for FHA's are 5% of course there is the MMI to consider however, you can pay off your 80/20 before the 5 year period without penalty thus eliminating the MMI.

We have several friends who are buying houses. I'm sure they're all making the right decisions, but we just can't see it as being something we want right now. We're still working our way up, and we're still trying to figure out our long-term financial goals. We want all these things eventuallly - other people seem to be really getting ahead of us on the whole house and baby thing. We're still really excited about our new TiVo.

@Skankingmike: If prices drop, and you have negative equity in your home, you can not sell the house if you need to. If you put money down, you have a cushion.

I understand there are special circumstances if you are making more on interest than the cost of a second loan, but if you can't save up a down payment, you probably shouldn't be buying a home.

When interest rates are low, you put as little down as you can-- 5% usually works. That's why they have PMI.

And I hate the snobs who like to pretend buying a house is complicated- its not any more complicated than buying a car. You shop around, find what you need (location, location, location) and make an offer. How freakin' hard is that.

IMO, I would first wait for prices to drop a lot more. Unfortunately we have become the "what's my monthly payment" nation so the actual price of the house seems to matter very little to some.

@Scoobatz: Or... DON'T GET AN ARM. Period.

@pecan 3.14159265: Good for you. I'm 27, have a mortgage, 4 children, minivan, and wouldn't have time for TV without my DVR. We do alright, but a little much too soon for me!

@FatLynn: One thing you fail to take into account is the current interest rates. Yes, if prices free fall (which all signs point to they they won't -- drop probably, free fall no). However, you're paying less in interest so if you plan to stay in said house for a significant period of time the drop in value right now will kill you less than higher rates in the future.

I truly believe that FREEDOM is one of the most undervalued assets a person can have. Freedom to pick up and move to a new place if you want, freedom to change careers (i.e. perhaps take a major pay cut) if you discover that you actually hate what you are doing for a living, etc. And most of the time, renting (not buying) is more conducive to freedom than buying. So before buying a home, do some real soul-searching on how much you value freedom/flexibility because buying a home can seriously limit it.

And I say this as a guy who bought a too-big (at the time) home before the boom, and lucked (timing-wise) into a 4.125% 15-year mortgage.

@Chris Walters: I find it hilarious that you actually had to specify which one.

@FatLynn: If you are planning to stay in the home for more than 7 years, then it shouldn't matter if the value drops some if you didn't put down 20%. 20% or more can be quite a lot of money in some areas, and take a real long time for people to save up.

In my area, for example, a nice 3 BR house in a decent area is $300,000, so 20% is $60,000. My husband and I were saving up for a down payment at $2,000 a month and got $20,000 saved up before we bought. Yeah, we could have waited another 3 1/2 years, but I was pregnant with our second child and we really needed more room than our 2 br apartment. So we bought with 5% down, used the rest for closing costs. We're paying PMI, and might have to do so a bit longer with the market flat, but our house hasn't lost much, if any, value (just hasn't gained anything), but we're certainly doing much better on taxes (thanks to 2 kids and mortgage interest deduction).

@thesadtomato: Definitely agree that one shouldn't buy a house if you don't know where you want to be/live in a few years. In buying a house, one should plan to live in it at least 5-7 years.

Not sure I agree totally on the credit cards. Yeah, having little to no debt is nice, but not always feasible. Some debt on your credit cards isn't going to hurt you in buying a house (and may even help your credit score). I'd say having a small "manageable" debt on the credit cards is fine.

@FatLynn: so you're saying unless i have 60k+ saved plus additional money for a house I should never buy a home in NJ?

@DGberg: Perhaps, but most places around where I live require a year lease with a 4 month penalty if you break it.

Freedom indeed.

IMO, the biggest reason not to buy a house is not having a good steady income. Frankly I'm surprised at the number of people that bought houses with little to no income, or living on very small disability and/or social security payments. I know the american dream is to own a home, but not everyone who works at McDonalds is entitled to be a home owner. I may have put less than 20% down, have credit card debt and don't have six to nine months of savings, but my husband and I have good steady jobs, make our payments on time and are slowly getting ahead (yeah, would be faster if the economy didn't suck and we both got raises, but at least we have jobs).

As for buying a house, the biggest advise is Get Your Own Agent and Hire an Inspector! And communicate with both. Doesn't do you any good to have an agent or inspector if you just sign of where they tell you to without reading the contracts and/or asking questions.

Read the title commitment report for any encumbrances on the property and ask to see the documents.

Don't put your head in the sand when it comes to the home inspection, follow up on every little thing. Don't believe the seller that the effloresence on the basement walls was "nothing" or that the inspector doesn't need to see behind ceiling tiles to check for termite damage (when there's other evidence of termites).

Remember that the seller wants to get out of the house, they are not your friend doing you a favor. Protect yourself. An inspection is the best $300 you've ever spent (and if you can't afford to pay for one, then you really shouldn't buy a house). If the inspector has any concerns about the structure, consider hiring a structural engineer. Structural issues can be very expensive to fix, but only $200 to find out about and get out of the contract.

Don't get pushed into a mortgage for more than you are comfortable with, or with terms you don't understand (fixed rate baby!). I don't think this happens as much now, but when I bought a couple years ago, the broker still wanted me to borrow $150,000 more than I was comfortable with paying. Yeah, maybe our credit report debt to income ratio was good, but I knew what our other monthly payments were (child care, family loan, etc.)

And finally, don't get too attached to a home. There will always be plenty of homes on the market, if one doesn't work out, just wait a week for another.

@pecan 3.14159265: I bought a house as well, but my wife is in her career already and I'm lagging behind in school.. These are things she claims will motivate me.

She's still on the fence about a baby. I just can't even think about that responsibility yet we have a hard enough time with our dog let alone a baby!

@pecan 3.14159265: The spouse and I have a house, but are more than happy to let our friends get waaaaaay ahead of us on the baby thing. Me, I'm thinking more long the lines of a Boston terrier from one of the local rescue groups.

@DGberg: I look at it from the other point of view. Owning my home will (once it is paid off) give me freedom from:

-Having to work a job you don't like just to keep a roof over your head
-Leases/tenancy agreements
-Unscrupulous landlords
-Rent increases

@FatLynn: Eh, like other commenters here, I'd disagree with the 20% minimum. I bought my house 6 years ago with 5% down, and my (now) wife bought hers at roughly the same time with 10% down.

We both sold earlier this year, netting $30k in equity from her place (townhouses aren't selling very well right now in our area), and $70k in equity from my place.

Granted, we're taking that money, and putting about 25% down on our new, bigger house. But as long as you're not maxing out your affordability, I don't see much merit in the %20 rule.

Sure, PMI is a bad thing, but as Skankingmike said, the low interest rates can make up for the added PMI cost.

Totally agree about an inspector being THE most important thing. Its pretty much the best potential return you could ever make - $300 to make sure there isn't a $50,000 problem with the house.

@Jon Mason: Unfortunately, inspectors don't always find everything and they make you sign a contract that says they aren't responsible for anything they didn't find or were wrong about.

@TreyWaters: FHA doesn't call it PMI it's called MMI :)

@JulesNoctambule: Man i hope you have a lot of free time. My Aunt has one of those and as cute as they are, they are incredibly hard dogs to train and keep happy. Consider your couch destroyed :P

@JGKojak: I wish it were that easy! Seriously not a snob, but I've got the location, location, location picked out.... but can't seem to seal the deal (outbid twice in the past 2 months)... It's not that easy for everyone - I envy you! I'm looking for a house where I can stay put for maybe 20 years, so I think it's a lot more complicated than buying a car!

@samurailynn: True, but hiring one still probably gives you at least a 50% shot at finding a problem, whereas not hiring an inspector means you probably are at 5% for finding a problem.

The main thing with an inspector, is to know one, or get referrals before you make an offer. Otherwise, you usually only have a few days to find an inspector and get the inspection scheduled, so you don't have a lot of time to find a good one. This is mostly for new buyers, who many times don't know about this step and thus have to randomly pick someone from the yellow pages, or rely on your real estate agent (if you have one).

One reason to have the escrow period be 45 days at a mininum. Give yourself time to find and fix any problems. Don't be pressured to rush into settlement at 30 days, or less.

@MostlyHarmless: Well, he did say BROWNstone.

@hillsrovey:

In general, I agree - but personally my husband & I are in the process of buying a home with 100% financing with a "physician loan"

So, in general you agree, except when it's you?

/has 100% financing too, but bought way below his means.

@FatLynn: You can have negative equity with a 20% down purchase, too, as many people who bought in 2007 will tell you.

I bought with 20% down and I'm happy to have been spared all that PMI. But as long as you're into the purchase as a house rather than a ROI and you're not trying to refinance (which nobody getting a fixed-rate mortgage now is likely to ever want to do) or move soon--which the seven-year thing takes care of--being underwater is only a theoretical problem anyway. Unless you're trying to turn the investment liquid or borrow against it, its current value just doesn't matter.

@Skankingmike: I'm thinking of a woman I know of who was absolutely floored by the task of screwing knobs onto her cabinet doors. She was a poor candidate for home ownership unless she had a financial cushion to pay other folks to do basic tasks. Which around here you can actually do, so it's not insane, but it should be factored in.

It should also be considered when you assess what kind of home you want to buy. Your fixer-upper would be my doom--I have neither the time nor the knowledge to pull such a house together, even outsourcing the labor. Even with a non-fixer-upper it needs to be considered--I love old houses, but I just wouldn't be able to deal with the constant attendance required by a Victorian.

@DGberg: For me, freedom would come with buying the house. Wouldn't have to live under anyone else's rules (landlord, roommates, family), I'd be able to decorate it how I please, arrange it how I please, put in a garden and fence the yard for the cat, etc.

I find apartments very restrictive.