House Shopping

[jrcagle]

I second on the buyer's agent. And on the home inspection.

True story: we bought our house in 2004 somewhat close to the peak (good for selling the townhouse; not so good for buying the single-family). At that time, buyers were in a frenzy and many were forgoing the home inspection because it gave them an edge on getting the contract. (Given buyer A and buyer B, the seller prefers the one with least hassle).

We decided to stick with the inspection.

On the first contract we put down, the home inspection took place. Room to room, this thing and that thing dinged, but nothing terrible. The last room was the garage, an in-ground garage (a lot of houses in MD are split-level, dug into a hill). The inspector said, "Take a look at this!" Running across the foundation was a 20' long horizontal crack at about eye-level. He explained that this kind of crack occurs because of pressure from the ground beside it, often caused by poor siting. The result was that unless remediation occurred, which he estimated at $80k, the wall would eventually collapse, taking the house with it.

It later turned out that the homeowner had "forgotten" to disclose this fact to his realtor. "oops."

We walked.

So absolutely ... get that home inspection. I would never have known that this kind of crack was any different from the normal cracks that one sees in cinderblock walls that run along the seams.

About the money: it used to be that 2.5x or 3x your yearly income was a good rule of thumb. You can imagine that got relaxed during the last decade, but perhaps it's a good conservative rule of thumb after all. Your agent should be able to advise you, or to put you in contact with a loan officer who can. But if possible, get advice from a loan officer who will *not* be servicing your loan. Not that they're dishonest; it's just that they're optimistic, especially if you're anticipating your earning power will go up.

Jeff