Post # 1
It’s so crazy to me that this is even an option! Four months ago we started talking about houses for the future and knew realistically that it would be at least 7-10 years before we’d be able to look seriously into buying a house! Then my husband got an amazing job in Silicon Valley for 3x his old salary. All of a sudden, this is a serious option. Everything moved quickly and within 2 months of first contact, we got married and moved to sunny CA. We have an apartment for a year while we get used to the area and decide where the best place to look would be. We should have at least $25,000 for a downpayment by then and hope to bump that up.
Would it be worth starting the search now? Do you have any good resources for first-time home buyers? (My family is unfamiliar with this process as my dad hasn’t owned and my grandmother only purchased one house in her life).
Post # 3
How exciting! We just purchased in the Bay Area (Emeryville, on the edge of Berkeley) and closed about 2 weeks ago.
One thing you need to remember is how insanely, ridiculously, painfully expensive housing is here. Have you looked at the housing prices in silicon valley? We’re talking shacks for $600,000. That means that even with a 20% down payment, you’re looking at a jumbo loan, which is a higher rate/harder to get. With $25,000 down, you likely will flat out not get approved. I don’t believe FHA does jumbos (but I could be wrong). You are also going to have to be able to show 2-3 years of income at the level for which you want to be approved. You also need to be prepared to pay $12-15000 in closing costs (on top of your down payment) AND be able to show up to 6 months of reserve funds to cover your mortgage payments (which will include insurance and taxes) “just in case”. They will want even more reserve if you are putting less down on a jumbo loan, plus you will be paying PMI on a ridiculous purchase price…
See where this is going?
Honestly, I think you should wait a couple of years. You don’t have the earnest money (3%) to put down where you are trying to live, let alone a real down payment or closing costs. Sellers are heavily favoring all-cash buyers at the moment. It is NOT a buyer’s market here. If you want to win the bidding wars, you need to be able to prove that you’re a serious buyer with real cash in the game. It’s terrifyingly expensive here….
Post # 4
We purchased on the penninsula about a year ago and used a realtor who specialized in first time buyers. It was really nice to have someone walk us through the process. There are places in the bay area where you can find a house for less than $600.000. Our house was way less than $600,000 and we put down less than $25,000 and were still able to buy a house that is within a decent commute to silicon valley (I work in silicon valley and my commute is 25 minutes).
The first thing that I would do is to start driving around in the areas where you think you will want to live and go to some of the open houses. This will give you an idea if you can afford that area or not. Decide on how much you want to spend and ask a realtor what areas you should be looking in. I didn’t even know that the area we bought in even existed until we talked to our realtor. I would probably start doing this now so that you can get a realistic idea of when you can actually purchase and what type of house you are going to get (ie how many bedrooms, an idea of how much work you will need to put in).
This is really an exciting time! Have fun with it!!
Post # 5
@funnybunny: We looked a year ago – the market is not what it was a year ago!! The inventory has dropped about 40%, and it’s bidding war after bidding war. It really has changed that much. There are very few places IN silicon valley (as the OP stated) that you can buy under the $550,000-600,000 range. Things may be listed for that much, but they certainly aren’t going for it. Wanting to live in silicon valley is a lot different than buying a track home in Hayward or a true fixer upper in Foster City or another less desireable area with a heinous commute. You pay for the convenience – and the better schools. We chose cheaper + safe (Emeryville) instead of Oakland, for example. We could buy a shack in Berkeley that needed $75,000+ worth of work, a beautiful flipped house in a scary part of Oakland, or an amazing townhouse in a cool part of Emeryville. With San Jose/silicon valley…you are looking at tiny house + lots of work + crazy price tag, or you have to go way out and be willing to drive really far. Or buy a tiny condo.
Post # 6
I’ve been looking for almost a year and still haven’t found anything. Like PPs have mentioned it’s super expensive and depending on what areas you’re looking at it’s super competitive. I’ve been using Redfin (redfin.com) to do my research and I’ve been going on tours with them.
They have a wealth of info for 1st time home buyers on their website and they offer free home-buying classes in person and on-line – http://www.redfin.com/home-buying-guide/welcome
I’d suggest that you start doing your research on the home-buying process and the different cities/neighborhoods you’re interested in (go to open houses, drive around day and night, etc) and be patient. We’re happy renting in the meantime until we find the perfect house at a price we can afford.