Expert: Connie Wildasinn-Broker,GRI,Realtor® - 2/19/2009

Question
I am new to the buying house concept.  I want to find out more info about it.

I am 35 and my gross annual salary is only $26,000.
I have zero in debt and can down 80k.  I currently rent a room in a house for $300/month.

1. I am in the Seattle area.  What is the max house I can afford?  I am assuming that the max term for anyone is 30 years, correct?  What is the typical interest rate?  What is the max house I can afford?

2. I have been grabbing these free local mini real estate booklets/guides that show houses up for sale in certain local counties.  I came across this page showing houses that look like they should be in the 400k range.  But this particular house is being sold for only 255,000 and its called "BANK OWNED".  What is "Bank Owned"?  Does this "bank owned" clause have anything to cause this house that again should be in the upper 350k or at least in the 400k range to be only 255,000????

3.  The local real estate websites I come across seem to only show NEW houses.  How do I find real estate websites that actually sell QUALITY, USED homes? (assuming of course that USED homes are always way way cheaper than new ones).

4.  Overall though, w/out you getting too technical on me, what "clause" should I look for in houses that will cause it to cost the less, regardless if the house being sold is new or used.  I mean, for a house to be tagged as (for example) "foreclosed" or "bank owned" or "short sale" or whatever other clauses are out there, do these tags/clauses hint to me that that house will cost way way less than it should becuse of that tag/clause? If so, what other clauses should I look for besides "foreclosed", "bank owned", and "short sale"?

5. When realtors sell you a house, is it their requirement to tell the person who is interested in the house to tell him/her/them the "past of the house"?  In other words, I am worried about these USED or even NEW houses in which the past of that house or property/land the house was built on to have murders or something gruesome happened.  Or is this the job of the person interested in buying the house to ask about this?  The realtors do not have the right to LIE about the truth should they come across this question, right?

Thanks for your time.


Answer
Hi Pan,

1.   Your best to find out exactly how much mortgage you can afford is to speak with a mortgage broker in your area.  You have a good down payment, but your income is slight… so you really need to see a professional to get your numbers put to paper and see where you are exactly, so that you know what to shop for….

2.   What is "Bank Owned"?  Does this "bank owned" clause have anything to cause this house that again should be in the upper 350k or at least in the 400k range to be only 255,000????  - Yes and no… Banks are not  in the business of owning property, so they simply want the property sold… many times the agents will under value the property to get  multiple offers and end up selling for well over the asking price, even in our current environment.

3.   The local real estate websites I come across seem to only show NEW houses.  Do yourself a favor and find a top notch buyers agent to work with, the information is in-valuable to you as a frist time buyer, and they can guide you through the process.

4.   “what "clause" should I look for?”   There is no magic word… it is still information in – information out.. you need to have an agent guide you so that you truly understand value when it is presented to you.  That is an educational process.

5.   When realtors sell you a house, is it their requirement to tell the person who is interested in the house to tell him/her/them the "past of the house"?  every state is different it what it considers to be disclosure on a property, I advise you to find out what issues make a difference to you and then get the information necessary to make a decision.   Example, death, to on person this is a determent to another a simple way to get a property for less money, some it makes a difference on how the prior seller died to other they do not care… and on a bank owned property, they will have no information to pass on as they most likely have never even seen the asset they are selling, and the agent may or many not know anything about the house or area.  Here in California, your agent can be 100’s of miles away and not really know anything… so find out what is important to you and do your homework.  

You had a load of questions, so I hope this helped you out in your decisions!  Good luck