Expert: Jessica Bryan - 12/23/2008

Question
Hello. I am SO new to buying a house. Me and my wife make about 40k anually together. I had my job for 16 years. My wife for 5 years. Our credit is EXCELLENT! Our scores is 785. YES you heard it right, 785. We are really good with money. It is only 1 credit card that I pay monthly. Its $100

These are my questions!

1) Based on how I budget ourselves, we dont want to pay absolutely more than $800 including all insurance, property taxes and all expense involving just the house. (Not incl utilities, Im budgeted separately for those) How much house (price of house) can we afford? In our area, we seen tons of houses in the $100k range.

2) What are the MOST basics for what I really need to watch for when buying. (tricky contracts, non honest salesman, age of home etc).

3) Should I wait a few more months for the prices to bottom out more, so I can be SURE I wont regret not waiting. Or are prices nogotiable enough as of now.  

Answer
Dear Gilbert;
Your monthly payment on a home of about $100,000 would probably be lower than the amount you stated but with insurance and taxes as the unknown in the equation I would say that this is probably where I would recommend staying.  To know exactly what you can afford you should sit down with a lender and look at the tax rates and insurance in your area.  The lender can then calculate the actual monthly payment based on the amount you have for a down payment and the actual cost of the the home.  

Your second question is an important one.  You should go to a reputable company based on recommendations of co-workers and/or referrals from family or friends.  Find an agent you feel comfortable with who is easy to talk to and has lots of time to spend with you.  If you feel the least bit uncomfortable don't work with the agent--find someone else.

After finding a home you want to buy, make sure to have it inspected.  Rely on the expertise of your agent but make sure to ask lots of questions. Newer homes have fewer problems so if you are worried about getting caught with something that is not what you bargained for I would suggest a new home with a good warranty.

As for your last question: with interest rates as low as they are right now I would start looking for a home soon.  I can't say where the bottom is on home prices, but even if they drop lower I don''t think that this is a bad time to buy.  Waiting may save you a little more, but it may also mean that you lose out on a good home available now.

Best wishes,
Jessica Bryan