Casey: Things I wish I knew before buying my first house
Like many other millennials, I just purchased my first house. The process of house hunting has come to a close, but the journey is just beginning for my wife and I. My co-worker, Nick Bowman, just went through the same experience, and I agree with his assessment – buying a home was the hardest thing I’ve ever done.
We found our new house in Kent, and it really is our dream home. We got really lucky, but we also worked very hard to find the right place for us. My goal with this article is to help other millennials find their dream home, too, and maybe even simplify the process for them.
So here are 7 things I wish I knew when I began looking for my first house:
You’ll need to do this anyway, but I think you should take care of it sooner rather than later. You can look at houses on Zillow and RedFin all day long, but what will you do when you find the perfect house? Nothing. In this market, you need to be ready to act on a moment’s notice. We put in the offer on our house within hours of it going on the market, and by then, it already had multiple offers. A bidding war was afoot and we didn’t even know it.
The good houses are selling immediately. It’s fun to look at houses, but you’re likely setting yourself up to find a home you love without being able to do anything about it.
Your mortgage lender will teach you a lot of new financial terms. You’ll discuss how much you want to use on your down payment and how that will affect your mortgage. You’ll learn about ever-changing interest rates and buying points. I won’t bore you with these details, but it’s a lot to take in.
Use a realtor
You may be tempted to skip this step because the real estate smartphone apps make it really easy to be your own realtor. Almost every house my wife and I toured with our realtor, we had found ourselves. But, I can confidently say if it weren’t for our realtor, we would not have gotten our house. She knew exactly how much to offer and why. She helped us to identify flaws in homes that we wouldn’t have otherwise seen. She also did all of the paperwork. Lots and lots of paperwork.
Location, Location, Location
Here are all of the issues to consider when it comes to location:
Choose an area that you can afford. If you can’t afford to buy in Ballard, don’t buy in Ballard. It was a tough decision for us to leave the city. We have tons of friends in Seattle and we loved going out on the town every weekend. But when we decided to buy a home, we were also making the decision that we were ready to change our lifestyle. Plus, the farther from the city you go, the more house you get. So … hello Kent!
This is a big one that you may overlook. Check out the neighborhood, check out your neighbors. Are you on a busy street? Is there lots of visibility from the street into your home? You may find the right house in the wrong location and that’s OK. Make sure you and your spouse will feel comfortable in your home. Use Google Earth to explore the streets near the home you’re considering.
This is Western Washington; your commute is going to be long. But you’ll need to consider – how long is too long? Is there an option for public transit? Some people can handle taking the train from Puyallup to Seattle every day, others can’t.
You’ll need to make sacrifices and this may be one of them. The best way to find out which restaurants/bars/entertainment are near you is to enter your potential new address in Yelp and explore. Be prepared to be underwhelmed with options compared to Seattle, but who knows! Maybe you’ll stumble on a lively neighborhood.
• Friends and Family
Will you be close to anyone you know? We moved south of the city because that’s where my family is. Narrow your search to cities that are near loved ones if you are able. This will become especially important if you have children/are planning on having children. At least I assume so …
Prepare for heartbreak
I mentioned this before, it’s tough out there. The market is very competitive and you probably won’t end up getting the first house you make an offer on. This can be a good thing. We made several offers on houses that we didn’t get. In some cases, we never even heard back from the seller. It felt like when you go to a job interview and you think you nailed it, but you never hear back from them again. It was devastating at the time, but we picked up the pieces, continued our search, and found the perfect house. It all worked out for the best.
Stay within your budget
Your lender will likely approve you for a higher loan than you can actually afford. Perhaps hundreds of thousands of dollars more than you can afford. Don’t fall for it. Consider how much your mortgage payment will be, compare that to what you’ve been paying in rent, and keep it within reason. Do NOT exceed your budget. The house you buy will probably need updates and let me tell you, every HGTV show is accurate. You WILL go over budget! One project leads to another leads to another. Termite damage, water damage, rodent damage, asbestos, etc. Hopefully these issues will be discovered in the inspection, but they may not be.
You may also want to consider the importance of square footage. The larger the home, the more it is going to cost to paint the interior, or to replace the carpet. Also, you probably don’t own a dining table. You probably don’t own a lawnmower, either. Factor these expenses in before determining how much house you can really afford.
Another expense that you’ll have is “earnest money.” If you’re required to do this, you’ll give the sellers a deposit of a couple thousand dollars as a show of good faith that you are committed to purchasing the property. It also gives you some extra time to get financing in order and do the inspection/appraisal.
It ain’t over ’til it’s over
Your offer has been approved, but you’re not done yet. Be sure to get an inspection. This may run you about $300-$500, but it’s worth it. Especially if the house is older. The inspector may find something that will change your mind about the house (and you’ll still have to pay them), but it could ultimately save you thousands of dollars and months of labor.
You may want to counter-offer. If the inspector finds a couple expensive repairs, ask the sellers to fix the problems, or credit you the cost in closing. They may counter back, you may counter back, it’s a whole song-and-dance. You’ll be running to the bank and to the lender’s office, and back-and-forth.
So, you bought a house! Now what?
The documents are notarized and the keys are yours. Now what? Basically, all that’s left to do is spend a ton of money. You may have to break your lease, you may want to hire movers, you may want to buy all of your furniture all at once. That’s up to you.
You may also want to do updates on the home, and here is my advice for this. Get quotes! Get several quotes! Shop around! Have many different companies and contractors come to the home and give you bids on the projects you want to do. They will, more often than not, do this for free. This is helpful for finding the best price, but also for meeting the people who are going to be going in and out of your house for the next several days. Don’t just go with the first person you find. Make sure you find the right people to help make your house a home.
House hunting is a long process. We began our process in May and we are still very much in the thick of things. It’s stressful and never-ending, but if you do it right, it will all be worth it. Your house is out there and I hope my guide helps lead you to it. Good luck!