Save, Save, Save!
Seriously. Start saving the minute you think you might want to start looking for a house. Better yet, even if you're not ready to start looking, start saving. Cancel unnecessary subscriptions, stop buying things you don't need, and start squirreling money away. You'll want as much money in the bank when you go into it as soon as you can. It took my entire savings account plus cashing out a bunch of stock just to cover my down payment and closing costs.
On top of that, there are so many more expenses you're not expecting. For example, to paint my house I probably spent about $200 on paint and supplies, and that was with all the supplies the previous owners left me in the garage and what my mom brought down. If I'd had to buy all of those things I'd probably have spent upwards of $350 or so. That's not including the stuff I had to buy to fix drywall, molding, door frames, the A/C units I had to install, etc. It adds up really fast.
Keep Your Credit in Check
This one can be difficult to get a hold on if you're not sure what affects your credit exactly, and it can vary based on the loan you want to receive. I didn't know, but luckily I had a little help. If you're even thinking about buying a home, start with these NOW:
- Have a few open credit cards. I know this seems counter-intuitive but having no credit cards really looks bad on your credit report. Have at least three credit cards approved and open in your name. If you don't have any, go out and get a couple-but make sure you get them at least a few months before you get approved for a loan so it doesn't' look like you're just shopping for loans.
- Use your credit card for all purchases. Make sure it's stuff you actually need and planned on buying with cash/check/debit, then pay down the credit cards with that actual money every month. Don't pay them entirely off, always leave about $30-$50 bucks on your open line of credit. Empty cards look badly too, so it's better to have a little bit (but not much more than a minimum payment or so) than nothing at all.
- Start paying down old debts. If you have a car payment, school loans, or other old debt lying around, start putting a little extra towards it so you're not swimming in debts with the credit cards and house payments.
Get Pre-Approved For a Loan-Then Figure Out How Much You ACTUALLY Can Afford
Don't start looking at houses until you know how much you can actually get approved for-you may be bummed to find out you can't afford ones you've fallen in love with. Then take what your lender approves you for and make sure it's actually doable. My lender approved me for up to $200k and my realtor started sending me houses in the $180k-$190k range to look at due to this fact, turns out they'd be more than half my monthly income each month in mortgage + fees + taxes + PMI, etc.
I then called my lender back and got an actual idea of what I could spend. He sent me an estimate of what each price range would run me, and I was able to figure out that I should stay around $140k for a house, or $110k for anything that had an additional HOA payment.
Work with a Mortgage Company that Makes You Feel Like a Priority
When I decided to apply for a home loan I decided to go with a company I'd heard ads for on my favorite radio station. I just decided to email them one day and inquire about the possible option of buying a house-I wasn't sure I was seriously going to do it or not, but I shot them an email on a Saturday afternoon out of the blue.
I received a phone call first thing the following Monday (March 23rd) morning, by Monday afternoon I was pre-approved, by Tuesday I had a Realtor sending me houses to look at. On Wednesday my mortgage guy confirmed that I couldn't afford any of the houses the Realtor had sent me, by Thursday I had a new list of houses. By the 25th I'd seen five houses, but hadn't loved any of them. On April 2nd I saw two (almost three) homes and decided on one, and I was Under Contract by Friday, April 3rd. I received my first underwriting documents on April 9th to sign. My mortgage company was super speedy!
Find a Realtor You Trust/If You Hate Your Realtor SWITCH
I really wish I'd switched. I went with a Realtor that was suggested to me by my mortgage guy and at first I thought he was great. But then over time I started to really dislike how I had to chase him down for answers and how he dodged my questions. I wish I'd just switched to another realtor when my friend suggested hers part way through-because it was too stressful being angry at him all the time!
For example, the first time I tried to close on a house he went out of town and didn't even tell me he'd be gone. I just got a "I'm in South Carolina" when I tried to get inspector information from him.
After a couple months of looking he started trying to push me into buying something I didn't want. Like a condo that was basically an apartment-the exact thing I told him I did NOT want to live in when I first started looking at houses. He also didn't respect my price limit on some of the homes he showed me-instead urging me to just go for things I didn't want for prices I couldn't really afford.
Then finally, I am actually closing on a house and he said he was getting the sellers to fix some things but refused to provide a list of things they were fixing. I emailed him every day asking for it and got "I'm out of town" AGAIN! He promised his assistant would send it-and she never did. I don't know if he lied about asking her to do so or if she was just incompentent but it was really frustrating. He finally said (word for word exactly as he typed it "I don't have it in front of me but there were some rain gutter issues they repaired, handrail that was loose, some electrical and GFCI fixes. They DONT need to repair anything but I convinced them to do a few items." I felt it was pretty rude, and hey-when I moved in they did NOT fix a damned thing he said they were going to. FAIL.
Also, they didn't leave the A/C they promised to leave, and after they moved out he said he'd follow up on it and then just started ignoring my emails. I mean, I closed, so he must have figured he'd gotten paid and it didn't matter anymore to follow through or keep in contact. I will never use him again, or recommend his services.
Be Your Own Advocate
No matter how much you like your mortgage guy or Realtor, you aren't going to be their only client, and that means that sometimes you're going to feel like you're not getting the attention you deserve. This is where you really need to be your own advocate. Email, call, text, whatever you have to do to get things done. You're going to have to be pushy to get stuff handled.
Figure Out What You Actually Want & Expect it to Change a Little
Do you want to live in a condo/townhouse? These have hefty HOA fees technically and you still share walls, but hey-you never have to shovel your own sidewalks in the winter or mow your own lawn. There are benefits to both, you just have to know what is important for you. When you first start looking at houses, figure out what your deal breakers are, and then go from there. As you look at more and more houses, what you want will change significantly-but you'll always have those deal breakers to fall back on.
Research the Areas You Want to Look In
When I started looking I knew that I wouldn't be able to live where I've been living. My rental is super cheap for the part of the city I'm in (it's kind of a yuppie area) and houses on my street go for upwards of $500k. I figured I'd have to go further away from the city, but I had a wide range of options for smaller towns just outside the city. There were a few I didn't know much about, but the houses were cheap and they were so close to the city that I started looking... They were rougher neighborhoods but people had been moving into them to gentrify the area. Two days after I put in an offer on one of these houses a drug/gang murder happened a block away from it... I'm pretty glad I didn't actually end up living there.
Make Sure Your Boss Is On Board
Chances are there are going to be a lot of times you either need to leave work early, or come in late, or even take the day off throughout the whole process, so make sure your boss is aware of what is happening and is okay with a little fluctuation while you work on it. There were times I had to leave early to look at houses, or come in late because I was dropping off the earnest money, or signing papers, etc. I'm really lucky I work for such a great company and my managers were so understanding.
Take an Unbiased Friend With You to Look at Houses
You will need someone who's not just going to go "Oh pretty! Get it!" at everything you love-you need someone who can point out the flaws of a place when you're caught up on one thing you really want about it. I was already Under Contract on the first home I planned to buy when I took Shawn out to look at the property, and since we didn't have keys we only looked at the outside and peeked in the windows. He brought all sorts of things like windows that wont open (they had broken cranks that you could clearly see), holes in the trim of the roof, the fence falling down in one area, etc. to my attention. This caused more stress, but I'd rather know these things than find them out when I'm living there. Which leads me to...
Get an Inspection
Inspections are a part of the process that are highly recommended (if your real estate agent doesn't insist you get one-they might not have your back as much as you think) and in my opinion completely necessary. An inspector is a third party person who looks over the property and will find every little thing wrong with the place and provide a report to you and your Realtor. If I hadn't pushed for an inspection on the first place I put an offer in on-I'd be in a world of hurt right now. The inspection showed that while it looked great cosmetically, it needed a new everthing-roof, plumbing, water heater, furnace, foundation, etc. It was so bad... And the door had been kicked in so it recommended drug testing-ouch.
I can't stress it enough-ALWAYS get an inspection done by a good inspector, it's worth the money. Pay attention to price of inspections too. You can find someone to do an inspection for $60 but it might not be a very good one... I paid $290 for my inspection, and there were only a few tiny things that needed to be fixed-but my inspector was amazing. He walked me through the house and showed me everything he thought I should know about, and then he offered me a bunch of ideas on how to fix things or what not to do when fixing them. I couldn't recommend him enough and if you're in Utah and need a good realtor let me know, I'd be happy to give you his contact information!
Be Prepared for Buyer's Remorse
No matter how much you love the place you buy, the minute it sinks in that you own it and are going to have to take care of it, and that you paid that much money-you'll feel a little buyer's remorse. It's natural. The first time I had access to my house after I signed the closing papers ended with me calling my mother in tears and telling her I'd made a huge mistake. Luckily she was awesome and rushed down to look at it with me. She was able to help me see what was not such a big deal and explain how easily we could fix things.
Find a Friend Who's Been Through It
I'm not going to lie-buying a house was one of the most terrifying experiences I've ever had. It's likely the biggest purchase you'll ever make, and especially if you're buying a used/old home there are all sorts of fears about what could go wrong. If it weren't for friends who'd been through the process already (shout out to Kristina and Callie, and also my awesome manager Michael) and who talked me down when I was freaking out, I don't know that I would have done it.
And hey, if you need to talk to someone who's just been through it, feel free to comment or email me. I'm here for you. ;)
Have you bought a house before? Are you looking for a house?
