So You're Buying a House...
Tomas and I became homeowners at 19. We honestly didn't know much of anything about home improvement, home maintenance.. none if it. All we knew was that a mortgage was going to be way less expensive than rent, that an apartment with two dogs would be the worst, and I knew I loved design and wanted free reign on my house.
So at 19, 2 months after getting married - we're Middle School Sweethearts, it wan't sudden - we bought ourselves a little townhouse and so our journey began. We've owned 3 houses in 6 years, fixing up each one to buy the next and we have learned a LOT. Like, a lot. We never rented until we moved to Washington and while I learned a lot from renting too, even later in the game, that's all for another post. I've seen a lot lately about home buying and as the market seems to be more bustling than ever, lots of people are making their way into homeownership. That's amazing! It is! Being a homeowner is something we really value and something we've made a part of our lifestyle and there are certainly things I wish I knew before we got into this gig. And even some things for those of us who have done it before, because refreshing that information never hurts.
Make a wishlist and divide it into 2 categories. Make a list of the things you must have. A bedroom for each person, a separate laundry room, a dishwasher, etc. Things that will highly effect you in your everyday life. Then make a list of the nice to haves and keep those in mind when narrowing down the homes you've seen that contain your must haves. Things like a double vanity in the master, a walk in closet, hardwoods on the main floor, a covered patio. Those are luxury items that are awesome, but could likely be changed or upgraded down the road that shouldn't trump the neighborhood, schools, or anything you absolutely can't live without the first day you move in.
Figure out your budget before you ever talk to a professional. If you technically qualify for a mortgage payment that's $3,000 a month but your budget really doesn't have the room to be comfortable with more than $2,000 - don't look at homes at the top of what you qualify for. Being house poor is never worth it. Trust me on that. NEVER worth it. Have a real talk with your spouse about that before you ever look. And if you're considering looking at a payment worth more than what you currently pay, start making it now. Take that extra money and transfer it to savings when you pay your current rent or mortgage and do that for a couple months before you have to make it to a mortgage company and can't make a different choice. You might find you can make it work. You might also find that it's stressful and over-stretches your pocketbook and it gives you a more realistic idea of what your budget can handle right now.
Find the right team. It makes all the difference when you have the right team of people behind you. We lucked out with our first two homes as my sister in law was our realtor so she made sure we were heard and taken care of, and she advocated for us through the whole process. Our third home, our realtor was amazing too and we found him through a referral from a trusted friend. Make sure you're very upfront with your budget, what kind of loan you're planning to use, and make sure you are clear about how much work you want to do to a property so you're not looking at Fixer Uppers if all the work you plan to do is unpack. Your realtor should be honest with you, and shouldn't be showing homes out of your budget. Do the same with your broker. A good broker makes all the difference when you're closing on a house. Your realtor will likely have someone they work with a lot, but don't be afraid to ask around to your friends for who they used. Your broker can make sure you get the best deal possible on your loan and tell you what programs you might be eligible for depending on your situation and the house you choose. Which leads me to my next point...
Make the system work for you. We bought our first home through a First Time Homebuyer program that our county offered and they ended up loaning us the money to make our down payment. (Again... 19. Not exactly rolling in the dough.) That loan allowed us to purchase a home, and when we sold that home at a profit, it made it so we could pay back the down payment loan as well as put a down payment on our new house with minimal input from our own bank account which then helped us turn around and buy this house a couple years later. Local, state, and federal governments can all have home buying incentive programs. Be sure to ask your broker what programs might be available to you. And not just for down payment assistance. Certain neighborhoods have incentives, historic districts often have tax breaks or locked tax rates. And if you decide to go with a home that needs a lot of work, there are rehabilitation loans or construction loans to help get some of it out of the way up front. We've only personally used that original down payment assistance, but the point is - you have options. Ask your realtor and your broker, weigh the pros and cons, and use what you have at your disposal!
Be honest with yourself about how much work you're willing to do. You will undoubtedly see homes ranging from needing total overhauls (ahem... our current situation) to turnkey homes and everything in between. Our first house was simply cosmetic updates and it ended up being a really nice introduction to home ownership and DIY for us, and our budget as we figured out how to navigate those two together. Never underestimate the ease of painting something and the huge impact it can have. But bigger renovations mean bigger budgets, either more skills for you to learn or more contractors to hire, and while I'm all for that, it's something to consider. And it's especially something to consider when looking at your budget. Your broker cannot tell you how much you can afford, only what you qualify for. So make sure when you get that monthly payment estimator, that you're also thinking about how much it's going to be to maintain the property (usually about 1% of the purchase price, per year) but also to do the improvements you're hoping for, including furnishing and decorating. Make a spreadsheet with a timeline, and see how your projects stack up against what you're willing to spend monthly. It's no cheap feat to renovate, decorate, or even just maintain a home, so be conscious of how that all fits together in how you want to spend both your money, and your time.
Do your research before you sign. If you're not sure what something is going to cost, or how much of a deal breaker something on your inspection report is, get it all quoted out. There is no harm in getting free quotes from contractors before committing to a project. So if you're looking at an immediate kitchen reno, if the house needs to be repainted, if there's water damage somewhere, or even if it's just that a faucet needs replacing, do your due diligence before you have to deal with it at your own expense. Those quotes have helped us a lot in closing on houses (including this one) so that we could negotiate the purchase price or seller concessions at closing and it makes it so you're not buying a house, then immediately stepping into must-do projects without knowing what they'll cost or if you can afford them.
Another good bit of research to do... ask about the neighborhood. This is especially true if you're moving to a new area and maybe don't know much about it. You can always call the local police department and ask about crime rates, noise complaints, or other potential safety or convenience deal breakers. Look up the schools and future schools your kids will be going to. And my favorite way to find about an area - join the Facebook groups. Join the groups, introduce yourself as someone looking at a home in the area, and see what people have to say. It's a great way to get to know your new neighbors as well as get a feel for what you're getting along with those hardwoods and new kitchen appliances.
And I will say this, as someone who has both bought and sold homes, it's easy to get caught up as a buyer and think of the seller as a greedy no-faced person behind that price tag, but it's almost always quite the opposite. Remember that moving is hard for everyone, and selling a house is daunting. Getting it ready to go on the market, worrying what thing you might not know about that could pop up on the inspection. If you're looking a home for a family, that likely means another family is trying to keep the darn thing show ready, vacated for the hour for you to come walk through it, and is also trying to buy another home in the process, going through exactly what you're doing. Be compassionate and patient as much as you possibly can, and you'll likely find your seller returns that favor. It's tough when you don't often talk to the people face to face until closing, but if you remember through this process that you're not just dealing with a property, but with someone selling their home and letting go of the home they've loved and lived in, it may make it a bit easier and smoother for everyone. And if for no other reason than you catch more flies with honey than vinegar, and goodness knows I'd rather a grueling process be made easier than harder because of my attitude.
So - are you buying a home? As a first time home buyer or are you a veteran? I don't love the process of searching, signing, paying, and waiting - but being a homeowner is one my very favorite things I get to do. Do you have any questions I didn't cover here? Let me know in the comments below! And happy home shopping!