Post # 1
In July, FH and I moved to a new town. We are currently renting and live 2 blocks from Lake Michigan (5 minute walk to BEAUTIFUL beach). I have a permanent job with a good enough income to support both of us.
FH is now actively job-hunting. He applied and went through a phone interview and a 4-hour-long interview. Now, we’re just waiting for the results.
Since he started applying we’ve be actively looking for houses in the area! We really like it down here. I just feel like this is such a “grown-up” thing to do (I’m 26, FH is 27).
We’re looking at houses mostly closer to the lake. We can take on finished houses and ones that require weekend projects to fix up (i.e. nothing huge, like electric, plumbing, etc). It’s just a huge step, and I’m super excited.
So, to the point. Any tips on home searching/buying you can give to these first-time home-buyers?
Thanks In Advance
Post # 3
First time homebuyer here (well kind of–first real home). Be patient, which I am finding is the hardest. Everyone takes way too long to accomplish things for you, like the realtor and bank.
Second, expect the best, prepare for the worst. Sometimes even when you find a house, things can go bad days before the closing or whatever. We have been fortunate where that hasn’t happened yet, but we are ok if it does. If everything goes right on our end, we should should be in the house by end of March.
Third, it is expensive and make sure you get an insprector and all that good stuff if need be.
Lastly, good luck and have FUN house shopping! It’s stressful but exciting!
Post # 4
Really research your inspector and I would really, really consider getting two different inspections on the house. A “small” miss could mean big bucks for you down the line. A good inspector is worth his weight in gold.
Dont spend all your cash on a downpayment, if you have to in order to buy, then wait. That cash reserve is important for unplanned emergencies in a house like a leak, clogged drain, lawn care equipment you forgot to budget for etc.
Really think about what makes you happy. Is it spending your weekends together with friends outside in nice weather or going out to dinner. The details of your life can affect your priorities of your house. More money for a bigger lawn to entertain, or distance to your office or extra bedroom/bath for people to visit.
Maybe you decide you really dont want to do your lawncare and shoveling, then maybe a house isnt for you but a townhome is.
Post # 5
Half-way through our exhausting search a colleague gave me the best piece of advice that saved my sanity: The moment you feel hopeless, depressed, and truly believe you’ll never find a place, is the moment “the one” will drop on your lap. She was 100% right. Buying a house isn’t always fun and magical. It can be exhausting and cut-throat. Be patient. 🙂
Post # 6
Play your cards close to your vest
Be ready to divulge EVERY piece of financial information available
Post # 7
Biggest tip that I can offer: KNOW WHAT YOU CAN AFFORD vs. what the bank thinks you can 🙂 Getting pre-approved is important before you start the process, because if you find something you really like, the seller takes you more seriously knowing you can be approved for a loan at all!
With that said, a mortgage broker/bank, etc pre-approves looking at basic numbers associated with you and your Fiance. My suggestion is take that number + all your expenses, including ‘what you do for fun’ to a financial advisor. He/she should be able to honestly tell you what they think you would be comfortable spending without it changing your lifestyle completely. I mean, yes, buying a home is expensive and your lifestyle will change, but it should not mean that you cannot put money into savings either, or whatever!
I am so glad I did this, because I was preapproved for $30K MORE than what I bought for, because someone had to honestly tell me that with taxes, insurance, etc, you would be breaking the bank if you bought what they think you can afford.
Post # 8
Make a list of your wants and needs from a house before you start really looking at them. Especially when you first really start looking it is easy to get overwhelmed with excitement about buying a house, so it helps to have a list ready that you can use to veto certain houses that don’t meet your needs.
Post # 9
Don’t make yourself house poor. Set an amount you can easily afford, and don’t let anyone talk you into looking at those you can’t or don’t want to afford.
Look around the neighborhoods where you’ve found some houses to see. Are they well kept? Are they being restored or are any being torn down and replaced? Is there overhead noise (any air traffic at night) or close to a fire station? How far is shopping? What’s the parking situation?
There’s a million other things to look for and to think about once you find some things you might be interested in, so make sure you find someone to work with who understands your limitations both financially and physically before you fall in love with something that is well beyond your capabilities.
Take notes on the listing sheets as you view properties, as after awhile they all seem to blur together. Write down the things you like as opposed to those you don’t and ask lots of questions. It will be easier to remember something that stands out and makes you want to find out more.
It can be overwhelming but also a lot of fun!
Post # 10
- Wedding: October 2011 - Bed & Breakfast
1. Know that house buying is NOT as easy as they make it look on TV. HGTV lies!
2. Save way more money than you think you will need because… well… you’ll need it.
3. Carefully look at your budget to know what you can afford. Do not trust your lender to tell you how much you can afford. Lenders don’t care whether you are eating ramen and taking staycations for the rest of your life. Ask yourself how much you want to pay each month (an amount that allows you to still save for retirement, save for big expenses, eat, pay your other bills, travel the way you want to, etc.). Then look at property taxes in your desired area. Take the average amount and divide by 12 to get the monthly amopunt you will need to escrow for property taxes. Subtract that from your house payment amount. Then subtract another $100 for home owner’s insurance (more if you live in a disaster-prone area). Then subtract another $75ish for HOA fees of you intend to buy in a HOA community. What you have left is how much you can actually afford to pay each month toward principal & interest on your loan. Then use an online calculator to see how much house that monthly payment amount will actually buy you. Do you like what you see? Awesome. Keep saving to have a 6 month emergency fund, your down payment, and your closing costs in the bank. Don’t like what you see? Time to look for higher paying jobs, adjust your expectations, etc. And save, save, save. Oh, and did I say save?
4. Stay as emotionally detached as possible. This is, first and foremost, a very pricey business deal. Emotions get in the way of business.
5. Drive through potential neighborhoods at all times of day and night.
Post # 11
We bought a fixer upper near Lake Washington sbd renovated it with an FHA 23k loan! Awesome program, we wouldn’t have been able to buy in this neighborhood otherwise.
My advice is to work with an experienced real estate agent who has a great network of inspectors, lenders, etc. Our agent was kind of slick, but he got us everything we wanted for under our budget!
Post # 12
Fiance and I are in contract on a home right now. 2 things I just learned yesterday that no one thought to mention: 1. There is an application fee just to have them process your loan, ours was $350. Not terrible but not great when its unexpected. 2. Multiple people told us we would only need to bring $2,500 to the closing, NO ONE mentioned that even though we only NEED $2,500 at the closing, we are required to have at least $6,500 just sitting in a bank account for them to “verify” that we have money to go to the closing under “worst case senario”. I have a bachelors in Finance and I work at a bank… I had NO IDEA that we need to have money just chilling in an account, if we had known that we could have easily saved that instead of paying all as extra towards our student loans. We are getting it “gifted” to us from a family member but since we wont actually need to have it for the closing we will be giving it right back. It was just really annoying to have to ask someone to front us the money when we could have easily had it. But good luck! All I can say is find an awesome Realtor, that makes a huge difference and have patience. It takes a while to find the right house. 🙂
Post # 13
I bought my first house 2 years ago. My advice…
Go to the bank – what can you afford? Don’t buy at the top end of what the bank says you can afford. What if you have a bad year or if someone loses a job?
Make a list of must haves – you likely won’t be able to find the perfect garage. You and your FH should discuss the things that are most important to you and what you will not compromise on. Other things you may have to. Things on my list are – must have 2 car garage, must have a better kitchen layout than my current house, and must have at least 2 beds and 2 baths.
Do TONS of research – I looked at hundreds if not over 1,000 listings before I even contacted a realtor or went into a house. This gives you a good idea of the market, what neighborhoods appeal to you, and what is a fair price.
Be flexible and patient – It could take a while to find the right place. When searching online, be sure to also check out new listings every few days. There are a lot of houses that have been on the market for months, but the gems are only on the market for a few days or weeks.
Get a home inspection!!! – This is a great way to avoid any major hidden issues. Also, it’s a great negotiating tool if there are minor issues that you are okay with fixing.
Post # 14
1. Make sure you’re working with a real estate agent who has your best interests at heart and isn’t just trying to sell you a house ASAP. We got lucky and just happened to start out with an amazing realtor who paid attention to detail (for example, when we were fawning over the floor plan she’d be checking the HVAC system and little flaws in the floors and ceiling that we weren’t noticing), but if you feel like your realtor is not “on your side,” find another one.
2. As PP’s have said, there is a difference between what the BANK says you can afford and what you can actually, feasibly, afford. We were approved for $40k more than the house we bought, and are glad we didn’t buy right at the top because we can still afford to go to dinner and go on vacations. Also, is your fiance ok with getting a job that he is overqualified for, just to help support your family? You don’t want to buy a house on the assumption that he will be making a certain amount of money if he is currently jobless, especially if he is trying to hold out for the “right” job.
3. You can update the appliances, fence in the backyard, tear up the carpet and put in hardwood, and paint the walls whatever you choose (we did all 4 of those with our first/current house!), but you can’t change the location at all and you can’t add square footage without spending a lot of money that you’ll never get back.
Post # 15
WOW ladies! you guys truly came to my help! You gave me a lot to thingk about and I’ve been talking to FH about everything! We’re still looking, just taking more in to account our wants and needs. . Thanks a million 🙂