Tuesday, December 17, 2013

Lessons from a Five-Time Almost First-Time Homebuyer

Take a Chance!  Buy a House!
Image by Images_of_Money
Buying a home is complicated and scary, and that's just lesson one.

As an English Professor at a metropolitan area university, I am generally used to being the person in the room who has most, if not all, of the answers. Not so with buying my first home, however. In the face of buying my first home I have been a complete and utter mess. I have learned, and I continue to learn on a daily basis, new lessons about this frightening and perplexing undertaking.

If you, too, are searching for a home on a limited budget with little to no experience with what to really expect, my lessons are written here for you.

Lesson One: Buying a Home is Scary and Complicated

All of the other lessons follow from this.

I love looking at houses, and I get very excited when there is a new house on the market in my price range for me to see. Whether or not I like the house (or if it has a secret, plastic-sheet-lined basement only accessible through the two-foot wide stairwell in the guestroom closet), it's fun to look.

However, looking is where the fun part ends and the reality sets in. You have to ask pertinent questions and be realistic about the answers depending on your preferences and budget. For example, if the house is perfect except for the exceptionally high burglary crime rate in the area, you should walk away if there are any gut feelings you have about your safety in the neighborhood. If the house is perfect except it sits at the end of a local airport runway, has no copper left in it, or has had a cigar smoker living in it for the past 50 years, it's really not perfect.  If the house is perfect except for the non-working appliances or a list of required repairs, you have to determine if on top of all of your other costs you can afford new appliances or to complete the repairs. That might require contacting a contractor for an estimate of repairs. If you cannot afford these additional costs or potential costs, you have to be willing to walk away from the house. If the house is perfect for you but costs $15,000 over your budget, you have to walk away from the house. That isn't ever fun.

Lesson Two: Find a Buyer's Agent and a Loan Officer You Can Trust

My agent and my loan officer are saints. I have had five houses under contract and have had to walk away from each one. My agent, however, doesn't pressure me to commit to anything after I make my decision to walk away, and she doesn't keep it to herself when she notices a house probably isn't right for me, and she answers all of my questions quickly and completely. My loan officer quickly creates loan comparison price sheets for me when I am interested in a house, so I can see the final closing and monthly costs before I commit to a contract. He answers all of my questions quickly and thoroughly, and he is always willing to offer options I may not have even known to consider.

Something else I have learned from working with my loan officer is that getting the loan comparison price sheets from him before committing to a contract is better than any free "mortgage calculator" on the Web. Seeing all of the fees, taxes, PMI, closing costs, interest, insurance costs, and monthly payments listed in one place is invaluable when making this huge decision. Knowing how much house you can afford is a question you should contemplate with the help of your loan officer. Then, of course, you have to give that number to your agent and firmly stick to that price.

Lesson Three: Attend the Inspection

Looking at a Fixer-Upper?
Image by Images_of_Money
Attending my inspections has been exceptionally enlightening. I have attended four inspections and three contractor walk-throughs, and I have gotten a great idea, by now, of some things to look for when I am viewing homes. For example, besides the obvious cracks in foundations or fireplaces and daylight or water through the roof, I have learned to look for rubber brackets in the breaker box, how to tell the age of AC compressors and hot water tanks by the serial numbers, how to measure the depth of attic insulation, how to check for damage to the flooring under bad carpet, how to turn the utilities on and off, and how to look for signs of bugs, mold, foundation issues, and bad siding, among other things.

Attending the inspections will allow you to learn about all the little in's and out's of a home and not just about the items listed on the inspection report.

Lesson Four: Walk Away if It's the Responsible Thing to Do

Regardless of whether or not you're worried your agent is going to want to kill you, your mother has already made curtains for the house you told her about, or whether or not everything else about the house is perfect, if it's not going to work out, you have to be honest with yourself and walk away. This is especially heartbreaking when the house is everything you want, but beyond your financial threshold; and that threshold will be different for everyone and might be difficult for others to understand.

You have to decide how much of your income you can dedicate to a home. You have to know how low you're willing to allow your savings to to be. You have to know how much home you can heat, cool, carpet, clean, maintain, or use. If there is any question in your mind about whether or not you can afford a particular home after you consult with your loan officer, contact the utility company for previous year's data or look up county tax information, you have to suck up your pride and walk away.

What I have learned from my agent is that I should make a list of what I cannot live without and what I cannot accept in a home, then stick to my list when I am seeing the home as a potential option. No place for a garage and you're a professional at-home mechanic? No yard and you raise big dogs? No parking and you have three cars in the family? No matter how sparkly the new ceramic kitchen sink, how beautiful the walk-in closets and fireplace, how low the price, or how large the garden tub, the house isn't the right house for you. Walk away.  Walk away.

Walk away.  And with that, I return to the first lesson: Buying a home is not always fun. It's scary, and it's complicated.  There are a lot of decisions to make, and a lot of options to consider.


So, as my husband and I pack up and prepare to close on our new house, wish us luck on this arduous and humbling journey, and we will wish the same to you. It took us three years of searching short sales and foreclosures, five cancelled contracts because of lost titles, stolen pipes, rotted floors, moldy basements, and recalled siding, and it took us looking at many, many, many houses we had to leave, walking away.

Readers, may the sun always shine onto that updated backsplash through your new kitchen's window.

Please read the second part of our story: Lessons from a First-Time Homeowner.

Copyright Amy Lynn Hess. Contact the author to obtain permission for republication.
Originally published May 2, 2012 by Amy Lynn Hess.

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