This fall, my husband and I hit a new level of adulting. We purchased our first home. This was not only a scary and stressful undertaking, but we also went from our first relator meeting to closing in less than two months. Needless to say it was an overwhelming experience that has thankfully ended – for the most part.
Now that we have lived in our new home for two months, here are the 7 most important things I learned while buying our first home.
1. Pick the right realtor for you
There are tons of realtors out there who advertise, but you need to find one that is right for you. Make sure you schedule meetings with a couple realtors before signing any agreement. We were very fortunate to find a realtor who took our requests to heart, took the time to email, call and text us if new listings popped up, and more. She was amazing at negotiating our closing date and made sure we had a great experience.
2. Shop around for the best mortgage offer
For our mortgage pre-approval, we started off at our main bank, then went to a state credit union since we are both state employees at a national bank. We ended up going with our main bank since it sounded like it would be easier to make payments, but it ended up being a disaster. Our mortgage loan officer was pushy and would email late at night asking for copies of items that were marked urgent – but then would not answer the phone or call back for two days.
Remember you are not just shopping for a home, realtor, and bank – you’re shopping for a mortgage loan officer as well. You need to make sure they are on your side and have your best interests at heart. Thankfully, our realtor had a connection at another bank and was able to get us situated with a loan officer who worked quickly to get a better, lower interest loan squared away.
3. Do your homework on all the fees
When purchasing home, you know you get to have a down payment and your mortgage pre-approval letter. But there are also items that you have to pay for before you sign on the dotted line and are given the keys. Very quickly we realized there are unexpected items that you as the buyer have to pay for (unless you negotiate them into the offer). These include things like:
- Home inspection >$200+
- Survey of property lines >$300+
- Due diligence (money to show you’re serious) >$500-1000+
- Appraisal of the home (how much it is worth according to the bank) >$250+
- Closing costs >$3000+
- Underwriting $
- Credit check(s) $
Make sure you have some money in the bank once you start looking at homes because even if you get some or all of these paid for by the seller, you usually have to pay them upfront and then they are taken off the total at closing. So no buying cute new rugs and décor just yet.
4. Keep an open mind
Despite what all the people on House Hunters say, you do not need granite countertops and stainless steel appliances in the kitchen of your first home. Yes, they are beautiful and new, but they also make the price of the house increase. So as a first time homebuyer you have to have realistic expectations on what you can truly afford because no one wants to be house broke.
If you purchase a home that needs a little cosmetic work, you are giving yourself the opportunity to make it your own and possibly get more house and land for your money. We saved so much money doing the work ourselves, added some sweat equity, and it gave us a chance to make the home to our liking. Later down the road, we are going to change the appliances from white to stainless – but if it isn’t broke, why fix it now?
5. Location is important, but you have to decide what’s most important to you.
Yes, it would be nice to live near all your favorite stores, be close to downtown, live walking distance to shops and restaurants, but also have a limited number of neighbors. But this is for people who have mucho denaro to spend and for the majority of first time homebuyers, those items are not plausible.
Sometimes you have to give up a few things to get the most bang for your buck. For us, we wanted to live in the highly rated suburban neighborhoods right outside the state capitol. But, those are the most desired areas for an obvious reason. To not live in a 1970s rundown tiny townhouse with carpet on the walls (this was an actual house we saw in our budget), we opened our search up and decided on a home that was to the east of the capitol. We ended up getting a beautiful home with a quarter acre, 3 bedrooms, and 2 baths for the same price as the rundown townhouse two towns over.
6. Once you find a home you like, visit it again at different times of the day.
If you’re lucky enough to not be in a multiple offer situation, take the time to see the home again at different times of the day. Leave early one day and try your commute to work from the home you’re considering. Is the drive okay? Did you hit traffic?
Then, visit late at night. Is it loud? Are there a lot of sirens going off? Visit again on an on a midday afternoon. Is there a lot of foot traffic? Lots of buses and kids getting out of school? These are important things to factor in because you may love a home, but the commute may not be worth sitting on the interstate for an hour or the area may not be what you expected.
7. Happily ever after and monthly expenses
Once you’re in your new home, there are things you’ll have to consider as far as bills are concerned. For us, we went from a 2 bed, 2 bath apartment within city limits. Our mortgage payment ended up being less than what we were paying in rent, but other items are added everything up to more monthly.
Some things that will most increase your bills are 1. the switch from renter’s insurance to home owner’s insurance, 2. paying more for water and sewer, 3. higher electric and heating bills (more square footage=more $), 3. HOA (home owner’s association fees AKA the folks who make the rules on what color you can paint your shutters), 4. paying for trash and recycle pick up, and 5. the addition of a security alarm system (if applicable of course).
When you start looking for a home, do research on the process and don’t set your standards too high. Shows on HGTV make searching for a home look glamorous, but it takes a lot of time, energy, and finances to make your dreams come true.
We’re happy to be in our first home and glad the buying process is over. Now, we’re onto some more DIY projects to make our new place even more homey. Happy house hunting!