My 2 fast tips:
* Make your life easier, make it part of the agreement that the sellers HAVE to hire a professional cleaning service before you move in--otherwise you'll spend the first two weeks cleaning out their trash.
* Know how old the roof is - you don't want to have to get a new one a year or two after you move in, when you're still struggling with the payments. If the roof is old, some sellers will give you a credit with the house price.

From the way I was raised, I have a slightly different perspective on home owning than most people. My mom's family motto was: "Love and real estate--get lots while you're young!" Overall, you need to go with what you feel comfortable doing, but my outlook is more in terms of investing.

My main piece of advice would be - don't be scared of debt. For instance, a lot of people say don't go into a house that's a stretch. Why not? Well, because it's hard and scary and you don't have fun money. But think about it, a good house is more expensive, but its value will also probably increase at a higher rate as the neighborhood becomes more desirable. You may feel you have less "fun" money, but in the long run it will pay off for retirement because. A cheap house now is likely to be a cheap house later, despite inflation. Having a bad neighborhood turn into to a good one, or vice versa, is like winning the lottery--it could happen, but the odds aren't good. So you have to decide, do I want fun money now or lots of fun money later?

Not that there aren't pitfalls to stretching. The first is, the neighborhood might go from good to bad (you'll have to research and judge this risk for yourself) or you paid too much for the house despite it being in a better neighborhood (again, research). The trick is getting a house that might be a stretch for you, but, is still undervalued at least 15-20%. This way, if something horrible happens or you find you can't make the payments, you can turn around and sell the house at market value and still break even (including realator fees). Actually, I'd recommend this even if the house isn't a "stretch" - if you're buying a house that's undervalued to begin with, no matter how much debt you have, you'll always come out positive in terms of equity. The owners don't have to post the price at less than the market value either--you can always make that offer. The worst that could happen is they say "no," right? (Well, and you lose your deposit [img]wink.gif[/img] )

True story:
When my mom bought the house we live in, she was only 21 (!) and it cost $50,000--in the seventies! That was a huge amount back then. Everyone told her she'd made a huge mistake and it was a white elephant, being a huge Victorian home (back then, "old" was considered bad) and needing work. She was 21, my dad was unemployed, and they only had $5000 for a down payment. My mom talked to the owner and worked out a buyer's contract whereby she would pay the woman the down payment, X (I think it was one hundred) dollars each month, until the end of three years when she would pay her the $50,000 in one balloon payment. It was a HUGE reach for my parents, but in three years, Victorian homes were once more "in," they had fixed the house up, and it was now worth $150,000. Since my dad now had a job history, my parents could easily take out a mortgage to make the balloon payment. Now all of the people who warned my mom against "stretching" are eating crow, because they live in tiny houses and we have one of the best houses in town--and my dad was unemployed when we got it!

So it's all in the way you manage things - bottom line is, don't be afraid of debt when you're using it to grow! DO be afraid of debt that you can't break even on or use to invest, like car debt or credit card debt. Now THAT debt is scary.

Yikes, I hope that wasn't too long! Can you tell real estate is one of my favorite pasttimes?

*De-scandalized for young audiences [img]wink.gif[/img] .