UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Next Thread
Author: farmrboy Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127680  
Subject: Help - New job & relocating Date: 9/20/2005 12:22 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Questions at end.

Overwhelmed. A week ago I received an offer from a company I've dreamed of working for since high school 15+ years back. Looked over the offer, was satisfied - should have asked more questions, but am definitely happy with the package - and said yes. The pre-employment screening - legal, medical & background - is underway and should be completed in a week to two weeks. Once that is finished a start date can be set and the real whirlwind will start.

A homefinding trip has to be worked in around one business trip in mid October (16-19) and another possible local conference the 26-28th. I'm not sure when I'll give my 2 week notice.

The DW & I don't own a home, but would like to buy a home where we're relocating (St. Paul/Minneapolis - MN) and our current income at 28% for housing would allow for about $1200/month mortgage payment. Now just from the offer I received, my base salary (not including company performance variable based pay), allows us to go significantly higher (not that I want to).

The company has relocation agency that can find us an agent and has preferred mortgage suppliers (Wells Fargo & Citibank).

Ideal scenario is taking the homefinding trip in about 2 weeks (be in MN for 1 week) and hopefully find a place we like and can afford. We left the area two years ago after I finished grad school, so there is familiarity, but no experience regarding real estate. We are prepared for an 80/15/5 mortgage setup as avoiding PMI would be nice.

As this is the first time buying a home for either of us, is it wise to go with the relo agency's recommendations? Do we need to get pre-authorizied or pre-approved for a mortgage asap? What should we do before the homefinding trip in order to maximize the productivity of the trip?

Awash in a sea of uncertainty,

-farmrboy
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: JBeauty Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90560 of 127680
Subject: Re: Help - New job & relocating Date: 9/20/2005 3:48 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
just one opinion, but I would hate the stress of buying a first home on a short deadline in an area I didn't know on top of the stress of moving and starting a new job. Phew!

nothing wrong with renting while you check out the area and have time to find the best house for your family.

do you get significantly more from the company for relocation if you are purchasing a house?

JBeauty

Print the post Back To Top
Author: khaar Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90562 of 127680
Subject: Re: Help - New job & relocating Date: 9/20/2005 4:00 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
As this is the first time buying a home for either of us, is it wise to go with the relo agency's recommendations?

ONLY IF, when you compare them to other sources, they look better than the alternatives!!!!!!!!

What should we do before the homefinding trip in order to maximize the productivity of the trip?

Find some real people (not your new boss or his secretary, not HR, not the company relocation specialist who's been assigned to help with any questions you have, etc.) and ask them for recommendations for mortage brokers, real estate agents, advantages/disadvantages of various neighborhoods, and whatever else comes to mind. Since you went to grad school there, you should have some reasonably reliable contacts.

Start talking to the real estate agents NOW. Ask 2-4 of them to e-mail listings they think would suit you. Based on your conversations and how closely you feel they hit the mark on their recommendations, you may have to ask some more questions. (Keep in mind that they are trying to mind-read long distance also.) After you have a feel for a few agents, call up the relocation agency and ask for the realtor recommendation. Definitely give them a call, but compare them carefully to those you've already interviewed.

I would also recommend looking at the on-line MLS for the city you're moving to (if available) or at least at realtor.com. It's not the best way to pick a house, but it will start to give you a feel for what's available and at what price.

Lastly, don't rule out the possibility of renting temporarily while you spend some additional time looking for the right house. It's unlikely the money will kill you, and your new company may pay for a portion of it.

Have fun!
Kathleen




Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: JBeauty Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90565 of 127680
Subject: Re: Help - New job & relocating Date: 9/20/2005 4:52 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
btw, I've had two occassions to work with relocation companies. both times the stuff they showed me was more expensive than what I could find on my own. However, the relo people were friendly and helped me out with maps and could answer basic questions about the area and the first drive-by to show the area was quite useful. YMMV



Print the post Back To Top
Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90566 of 127680
Subject: Re: Help - New job & relocating Date: 9/20/2005 5:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
There are really only big two reasons that I can think of to hurry up and buy before you move instead of renting;

1) Some of your costs will be paid as a relocation expense.
2) You have kids that would that you don't want to have to change schools twice.

Renting and moving twice is a hassle, but when you consider the amount of money you will be spending on a house it is worth while.

Some of the problems with buying quickly are;

1)If your spouse will be looking for a new job once you get there, then you do not know where to buy for a reasonable commute.

2) There is a small but real chance that you might hate your job(or vice versa)once you get there.

3) You do not know the area and while you might be able to find an Ok or good house it is unlikely you will find a great house. The problem is that the great houses will not be on the market long. I found the best house that I have had by selecting the area that I wanted then watching the houses that came on the market.

There is a counter argument to this in that with it being fall, you might be able to find an acceptable house at a reduced price that did not sell during the summer. Interest rates are still good and you don't know what they will be six months from now.

If at all possible a good approach would be to be prepared to rent, but if you find a great house then to go on and buy.

As to your questions;
Do we need to get pre-authorized or pre-approved for a mortgage ASAP?

Go on and get pre-approved. In addition top being a better bargaining position you do not want to have to be looking though 50 packing boxed for a piece of paper the lender wants.

What should we do before the home finding trip in order to maximize the productivity of the trip?

Read up on why you should users a buyers agent instead of a traditional real estate agent.

Find a web site with good aerial photo's in addition to the real estate listings. Try teraserver and google maps. When you do not know the area looking at an aerial photo can tell you a lot. When I was relocating, I looked at the aerial photos at one house I liked and it had this funny line in the trees in the aerial photo not far from it. It was a railroad track. Be a bit early og the exact location though because a lot of the addrress lookups are a bit off. In the areal photo you should be able to see wich side of the hosue the driveway is on and the shapr of the roof to try to match it up to the listing photo.

Start looking for a good home inspector. If you use the one your agent recommends you might agent one that is too easy.


Greg


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90567 of 127680
Subject: Re: Help - New job & relocating Date: 9/20/2005 5:55 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
As this is the first time buying a home for either of us, is it wise to go with the relo agency's recommendations?

I have relocated twice to brand new areas in the past 3 years. Both times I had good luck in asking at my potential workplace if they had a realtor they could recommend. It was not the realtor who was recommended by the relo service in either case.

What should we do before the homefinding trip in order to maximize the productivity of the trip?

Since you have lived in the area before, you may already know the areas you would like to live, which will be one of the things you want to tell the realtor - they may also have some ideas once you tell them what you are looking for and the price range. Be very specific with the realtor, i.e. "I want to live within 15 minutes of work even during rush hour traffic", "I want a single story home with a yard big enough for a large dog", "I want a fixer-upper", etc. Have this conversation at least 3 days before the house-hunting trip so that the realtor can get appointments set up in advance.

You have a $1200/month budget, but with taxes and insurance, what does that figure out to be in terms of how much house you can afford? You may need to talk to the loan officer to figure that out, but you need to then tell the realtor what the max house price you want to look at is. Depending on how hot the market is, you may want to tell them a little less than your max amount to leave room to overbid if necessary.

You may also want to look around to see if you can find a better loan deal than the one from your preferred mortgage suppliers - sometimes they have good deals, but not always.

If we lived in an ideal world, you would find your dream house on the house-hunting trip. If you don't, are you willing to rent for a short time and continue to look? It may mean moving twice, but that can be a better option than purchasing a house that may turn out to not be the right house. Since the transaction costs are very high with real estate, it can be better to wait and get the right house than to hurry up and buy a not quite right house that you will be unhappy with in the end. I rented for 3 months on my relocation 3 years ago and was happy that I had.

Having said that, I do have to admit that I bought my current house after looking at 12 houses in the space of 4 hours and have been happy with it. However, this was also the 5th house purchase that I have made, and my realtor was great about showing me houses that met my specifics, so he had narrowed everything down for me pretty well.

Good luck!
AJ

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: mew5280 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90582 of 127680
Subject: Re: Help - New job & relocating Date: 9/21/2005 1:03 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hey there, I relocated to St. Paul awhile back with my company but I was very mobile and only wanted to rent. I had to move 9 months later to the East Coast. I loved the Twin Cities, though.

Anyway, I do think you would be best to listen to the relo people but then research some on your own. From experience, I would get the lowest possible mortgage, resist the offers for higher, resist those who say "but you can qualify for more."

I hate moving so if you rent first, you have to move twice and possibly deal with storage. However, a week is a short time to buy a house, though sounds like you lived in the area before and know what you want. The suburbs there are nice, I remember Applewood and White Bear Lake but I like the older city neighborhoods like the lakes are in Minneapolis. Sorry, just reminiscing!

Print the post Back To Top
Author: farmrboy Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90596 of 127680
Subject: Re: Help - New job & relocating Date: 9/22/2005 4:23 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Thanks for all the feedback. The DW and I are in a situation that we don't HAVE to find a house during the week we're up there, but it sure would be nice. A timeline for moving could then be set. Otherwise, I end up starting, stay in temporary housing for a while, continue to look, and have her come visit every once in a while.

I can't say how much I would dislike moving again in a few months or year. Plus we have a cat and so many landlords don't like pets.

Reimbursement doesn't change a whole lot one way or the other, except that we could lose some $ if we don't abide by the company relocation policy guide.

I was just quoted a rate today by one of the preferred lenders for an 80/15/5 at 5.125 (1pt) 30yr fixed / 8.0 20 yr fixed. They told me I had excellent credit (which I already knew) and only one question mark (which I figured would come up). I'm lucky enough to have inherited some farmland with my brothers which is in an LLC that has a loan as one of them wanted out a few years ago. This shows up on my credit report and shows only the balance since after the LLC, the partners are on the hook for the loan. The joys of documenting that I'm not paying for it and the LTV of the LLC is something like 20%.

But no problem with the pre-approval and we're at least looking on the eastern side of the metro area so housing is slightly cheaper (and a better value).

These are the days where I wish I was independently wealthy and didn't have to worry about a several thousand here or there. *Sigh*

But hey, life is good and it's going to get better.

-farmrboy

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Wheee Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90599 of 127680
Subject: Re: Help - New job & relocating Date: 9/22/2005 8:53 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I've been in this situation 3 times.

Once I rented for a year and then purchased. Once I was in temp housing for 30 days and then purchased. This last time I was in temp housing for 60 days and then purchased.
Based on this being your first house purchase, I'd slow it down. Learn the neighborhoods a little. Rent for a while. A mistake buying can be very expensive.
Whee

Print the post Back To Top
Author: kdts2002 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90600 of 127680
Subject: Re: Help - New job & relocating Date: 9/22/2005 8:55 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi,
I've moved a few times and the first thing I done was to get newspapers from the area. Now you can get them online.The realtor.com was a good idea however, beware as they usally show the "best". I really liked the topo idea, good tip, it should be under the "land use & planning" at the city or county.gov website.

I know winters coming and it gets cold there,but a motorhome or camping trailor might be an option for a month or 2? We lived in one for 6 months in MT with a 1 and 3 yo [27' MH] and packed all our stuff in a 24' enclosed trailer [ beats moving it twice].

Hope this helps.

kdts2002

Print the post Back To Top
Author: PaulEngr Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 90661 of 127680
Subject: Re: Help - New job & relocating Date: 9/26/2005 10:36 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
I'm unfortunately an "old hand" at this. I've been through it multiple times.

First off, you simply don't have enough time to make an informed choice in a matter of a couple days, especially since it's your first house. This is brutally clear when you are asking questions like what the difference between pre-authorize and pre-approved is.

I would highly suggest that you negotiate with the company to hold off on buying a house with a reasonable time frame. Such as putting you up in a corporate apartment (basically a fully furnished apartment) for a couple months or even for you to take a short term rental unit (6 months) and agree to buy the house in that time.

This will make the employer happier because if you suddenly decide to walk, they aren't stuck holding the bag on anything. And it will make you happier because you get enough time to make a reasonably informed decision. They usually just like to set some sort of reasonable time limit.

You are basically stuck being able to look at perhaps a half dozen properties in a very short period of time. Although you "know" the area, you certainly don't know the individual neighborhoods in an area that large and you definitely won't know the "market", especially being a complete newbie. My wife and I can look at perhaps 6-10 houses spending about 10-20 minutes on each and after we see the asking rates (and perhaps check on a few recent sales on stuff we've looked at), we can quickly make a determination as to the rough value of a property. You need that skill if you are going to negotiate a decent price.

When you are negotiating what is usually the largest personal financial item in what is essentially a sellers market with a relatively highly leveraged position (80/15/5), clearly you need to be able to understand the market pretty darned well or you will overpay dearly for it.


That out of the way, here's what else I've learned. Companies like relo agencies (I've used one three times) simply because it eliminates a lot of paperwork and because it takes care of a lot of hassles like dealing with moving companies. They offer deals like you are being offered primarily because good prospective employees with kids have a difficult time having the time to simply uproot and travel several hours away and then go through all the little details of settling into a new area...in other words, it's a relatively low cost way to attract better people (not that it's particularly low cost...the mover bills alone are shocking the first time you see them).

The relocation agency is usually pretty good with a yellow pages listing. And they may or may not have a database of contacts. But that's about it. So just understand what you are dealing with, no matter how expert they appear to be. They are similar to real estate agents...they're not "necessary"...they're simply brokering various service agencies to you.

Okay, now for the real estate agencies. This is where it gets a lot more dicey. It's not that all real estate agents are bad. Heck, it's the 90% that give the other 10% a bad name. If they can actually manage to return your calls, actually manage to show you more than 3 or 4 houses and then insist on you making a decision among that pathetically small cross section, not try to go out and bid against you if you actually do manage to find a good deal, actually listen to what you are interested in, and not try to pry your financial situation out of you and then only show you properties that are at the very top of what you can afford, then you may have discovered one of the 10%.

To give you some idea of what you are dealing with, the people we bought our current house from were real estate agents. We still get some of their trade magazines. They are interesting to browse through but after doing it, I always feel like I need a hot shower. One third of the magazine is dedicated to what to do with your money after you've unethically extracted as much as possible out of unsuspecting buyers. One third is how to get more efficient at extracting as much money as possible and leaving as little as possible on the table. And the remaining third is full color quarter page ads for various get-rich-quick schemes that are normally in the back pages of most magazines and newspapers.

Do NOT reveal your actual buying range, ever. If you do, you will be very disappointed and you will need to switch agents. Give them a range to show you and/or start making suggestions when you do some recognizance on your own (searching MLS listings, driving around neighborhoods). But don't tell them what you can and can't afford. They'll eventually figure out a close number but don't EVER give away your top price or that's exactly how much you are going to pay.

That being said...it doesn't matter what the relocation agency suggests. It also doesn't matter what's in the phone book. In fact, my wife and I usually just picked a few things off realtor.com or something similar, called the number (for a seller's agent obviously), and went looking at stuff that was close but definitely not what we were really looking for. We weren't really looking for houses. We were looking for agents. Eventually, we'd find a good one after 5-10 tries and just stick with that one until we closed the deal.

Now the "pre-authorized" vs. "pre-approved" crap. "Pre-authorized" means that somebody who knows a tiny little bit about the mortgage market (or not!) gets you to cough up enough personal information that you can make a decent stab at how much you can afford. "Pre-authorized" means nothing contractually except that they gave you a rough number for shopping purposes. If you want to calculate it yourself, then get on eloan.com and use one of their calculator programs to figure out what you can afford and play around with the mortgage "shopping" engine to figure out a good idea of what you can get. For your "15%" loan, figure about 1-2% higher over the 30 year fixed 80% loan going rate, and that it will be a 10 or 15 year loan. You definitely should be doing a budget and figure out especially tax rates in the area of choice, insurance rates on houses, and figure a reasonable number for "upkeep". Don't worry about the money you'll be saving on taxes...it's not significant for budget purposes.

Back to the original point...now you have a good "pre-authorized" number. There's a web site out there and it may be eloan that allows you to "fill in the blank" on a "pre-authorized" form. Why do this? I once wanted to check out a certain property. It wasn't in the MLS listings. The real estate agency that kept it in house would only show it if I was "pre-approved or pre-authorized" with enough money to afford it. In other words, they were using this as a come-on to get at my personal financial information in order to sell me the maximum house I could afford (and maximize the amount of money they extracted from me). So I filled it out for $1,000,000 so that I could look at a $150K house. They relented when I called their bluff.

Pre-approved means that someone in the mortgage business has actually checked your credit (much more than the usual standard credit check) and is actually making you an offer for a mortgage loan up to a certain amount for a certain period of time. Since this is somewhat more involved and they don't want to waste their money on customer fishing calls, they usually charge a nominal amount to get pre-approved. If you did the previous pre-authorizing step and you are confident about your financial numbers, then you don't really need pre-approval ahead of time. And it locks you in if you find something better later after spending some cash ahead of time unless you don't mind blowing the cash.

If you live in one of the right states that requires credit agencies to give it away, go ahead and get your credit report now. If now, use the stupid "freecreditreport.com" site and just make sure to cancel their service before they charge you money. This is just assurance that there's no surprises when you actually go to get the mortgage.

Finally, immerse yourself in MLS listings. Start with the easy ones such as realtor.com. Also search for local agencies in your area of choice. Often you can start with the national sites for "Century 21", "Re/max", and so on, and locate a local agency's listings which are usually more complete. Sometimes even better yet you can stumble on one that gives you more information such as addresses or days on the market. The address is a really great find because although real estate agents mean well and all that, I can frequently knock many of the potential searches out simply by driving by the place. Sometimes I can get an agent to give up the information when they realize that I'm just trying to avoid wasting time for both of us.

If you must take the trip route, then I'd still make the same suggestions. Print out as many MLS listings that you are interested in as possible. Talk with the agent(s) over the phone and try to whittle it down to a few reasonable items. Don't be afraid too to ignore asking price to a certain extent. Sometimes you can find bargain basement items and sometimes you can find obviously overpriced stuff a little higher than what you expected to pay. On my most recent house, we looked at one house that was only asking $150K and that was actually very close to a real price. The moment we turned in a bid, there was a 3-way bidding war going on and it got ridiculous. Another house that was asking $180K was worth that AFTER spending about $20K to fix all the problems. So we started at $155K which was reasonable and the sellers said they had a valuation done that claimed $175K and wouldn't budge. We walked and our agent pretty much agreed with our conclusions...which was the reason that it was on the market in excess of 180 days. The one we settled on was asking $190K which was significantly above our affordability range. We decided not to make a formal offer because we knew that what we were going to offer would be considered an insult. Surprisingly the sellers came back and actually asked us to put in a formal offer at that rate and we actually did settle for something very close to what we offered...the sellers lost a couple deals already because they were asking for all kinds of goofy extras. So they were getting antsy to move.

To summarize:

1. Before doing anything else, construct a reasonable budget. Try to get every number in your budget as real as possible. Use eloan.com to get mortgage numbers and plug in everything else to get as realistic a number as you can. Don't buy that "2-3x your salary" thing (with current interest rates it is significantly off anyways). Don't go with the FHA allowable limit of 33% debt. Use your own real numbers. Don't forget things like an "entertainment budget" and funding an emergency-fund. The goal here is to be pessimistic so that you don't end up "house poor"...you've got this huge beautiful house but you're miserable because that's all your pay check is covering. Lenders will easily let you become house poor so it's in your best interest not to let it happen.

2. Look at as many listings ahead of time as you can get your hands on. The goal here isn't to look for a "yes". It's to reject as many as possible. You want to develop as many "maybes" as possible while rejecting as many properties as possible ahead of time. This can be tricky. For instance, we saw one house that looked great in the photo but when we drove by it was obvious that the siding needed replacing bad and that the whole property was very run down. Being at the upper end of our affordability range, we couldn't take on a handyman's special at that price so we didn't even need to get a walk-through. Similarly often if a house was photographed in fall or winter and there's leaves everywhere and lots of trees in the yard, it can look horrible. So it can land in the maybe pile even though the photograph screams no way. Don't put too much stock in the photos if you can help it.

3. Before and during the first trip in addition to eliminating as many properties as possible, try to eliminate as many real estate agents as possible.


Anyways...you should get the idea from this. It's so much work that I can't realistically see how you can pack it into 2 or 3 "house hunting trips". I think you'd be better off spending a single trip locating an apartment. Taking the job very early (like ASAP), then continuing the search BEFORE you move all your stuff. This gives you time, and house hunting trips simply can't offer you that time.

Also, my experience is that you simply can't compress the whole offer/mortgage/insurance/signing process into less than 2-3 weeks. So don't think that you can accomplish this thing in 2-3 days either even if you found the dream home at a dream price. Even when my wife and I were DESPERATE (living in a hotel room for 3 months straight in a non-suite hotel) to get into a house, we couldn't get it to clear faster than that.


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Next Thread
Advertisement