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I’m going to be turning 18 in a few months, and I think it’s time for me to buy my first home and start a life. I’m not sure yet if I want an apartment or a house. I have sufficient money, and my credit is unscathed, but it’s something I’ve never done before. Where do I get a Realtor? What’s the difference between renting an apartment and owning a house? Is it anything like applying for a job? (do an interview, they check your credit, they check your resume, they find out “who you are” ect) Are you supposed to pay up-front or over time? How do you contact a landlord? How long does the process of home-buying take?

Sorry about my ignorance of this topic. Like I said, I’ll still be in high school when this happens. They don’t teach people about this stuff in school, and my parents don’t know that I’m going to do this yet.
Thanks for the advice! 😉
By the way, I have had the same job for about a year and a half. I know that houses usually run about 250,000 dollars in the area near my school. Like I said, that’s not really an issue. Of course I have credit, otherwise I wouldn’t be asking this.

4 Thoughts on How do I buy real-estate?
  1. Reply
    My Take on It
    October 28, 2011 at 3:32 am

    First off, unless you have 30 to 50% to put down on a house, you won’t be buying anything.
    At the age of 18, you don’t even have credit. You don’t have a rental history. Have you had the same job for 2 years?

    What is your idea of *sufficient money* and how much are houses in your area?

  2. Reply
    October 28, 2011 at 4:04 am

    If you’re just turning 18, it is highly unlikely that you have enough money to buy a house, or even for a down payment for that matter. And even if you had enough for a down payment, you need to have a credit score of at least 620 and a job that allows you to make your monthly mortgage payments. You need to have been working at that job for quite some time. And don’t forget electricity, water, gas, property taxes, insurance, repairs, maintenance, etc. There are a LOT of expenses when owning a home!

    I can tell you right now that your parents will tell you that buying a house is out of the question.

  3. Reply
    Steve D
    October 28, 2011 at 4:20 am

    First, you will need to be working for two years at the same job/employer before you can even consider getting a mortgage to buy a house or condo. You can, of course, pay cash and avoid a mortgage (I hope by sufficient cash you are talking $ 50,000 or more).

    The difference between renting and owning is that when you rent, you give your money (rent) to a landlord every month and you are allowed to use the apartment – you aren’t buying anything. When you take out a mortgage or buy a house, you actually own it and can sell it when you want, etc.

    There is a lot more to it than this and you should spend some time looking around the internet at financial advice sites to get an idea of thr pros and cons of renting versus buying.

  4. Reply
    October 28, 2011 at 4:31 am

    Your best first step is to walk into a bank or a mortgage broker and see how much of a mortgage you could potentially be approved for. This is a free service and they can calculate how much home you could afford or if you maybe need to work on part of your finances for longer (i.e. save up a bigger down payment, as you’ll need about 25% as down payment). They can also go over all the closing costs which would be associated with buying a home because things like lawyers fees, home inspection fees, transfer taxes and more can really add up above and beyond the 25% you already put as down payment.

    A real estate agent can also do the same thing for you, although I’ve found that a mortgage broker or even your own bank can walk you through the basics. A mortgage broker or your bank is going to focus strictly on the financing of a home – not finding one. The real estate agent will help you find a house you like within your price range. To afford a house that costs about 250,000 you’re looking at needing an after tax salary of about $ 4000 per month and a down payment of $ 50,000 (and get a $ 200,000 mortgage), just to give you a rough idea.

    Hopefully that’s not too discouraging, but once you see how much you need to have as down payment and monthly income to afford houses, it’s no wonder that 18 year olds seldom own houses. It would be great if you could, but for many people it’s just not feasible.

    For renting, some landlords will rent to just about anyone. Others will want to interview you (at least informally – meet you and show you the apartment). For anything less than executive class apartments you’ll be looking on your own. Check your neighborhood for vacancy signs on apartment buildings or your local classified ads. You’ll be asked to fill in an application (most of the time) and sign a legal agreement. They’ll do a credit check and ask for first and last months rent to be paid up front, as well as potentially a security deposit. They’ll probably also be asking for a letter of reference from your employer stating your salary so they know you can afford to live there. Even if you have great credit, they will not rent to you unless you’re making enough money.

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