My husband and I are currently in the process of buying our first home. We’ve been working toward this for years, so we are really excited that it’s finally happening!
But here’s the thing. I’m a major Type-A, pain in the ass, need-to-know-every-detail kind of person. And when you’re doing something as huge as buying a home, things aren’t always as accessible as you might want. I learned that the process isn’t over when your offer is accepted — that’s where the really hard stuff starts.
So I tried to break it down into my biggest takeaways for each step of the process. Of course, everything varies by country, state, county, province, etc, but the general feeling of “OMGOMGOMGOMG” is pretty universal, I think.
Step 1: Research
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This seems like a given, but so many people go into this blind, and I wonder how they do it.
It’s tough to research when laws, markets, and regulations vary by state and county. But, once you know the general area, do as much research as you can. We scoured the market for over six months before stepping foot inside a home. We saved houses we were interested in to see how much above or below asking price they sold for. We went on Reddit and Wikipedia and every other place for neighborhood information. Google maps became our best friend.
Now, we probably went overboard (because hi, Type A here), and a good realtor will know a lot of this information like the back of her hand. But for my peace of mind, I needed to know for myself so I could go into the house-hunting process with a clear idea of what I wanted and the expectations for my price range.
Step 2: Planning
Different from research, but this can be done in tandem with Step 1. One of the biggest things I learned is that your money isn’t going just toward the sale price of the house. Apart from the down payment, there are inspection fees (in the $500 range, depending on inspector and/or age of the home), closing costs (2-3% of purchase price), appraisal fees, lawyer fees (which may or may not be included in the closing costs), the cost of moving, and dozens more. This requires a significant amount of cash on hand, which, for most people, requires at least a couple of months of saving and budgeting.
My husband and I have a master spreadsheet that tracks our monthly and yearly budgets and spending. Once we knew we both wanted home-ownership, we amped up our savings account for close to two years before house hunting. This assured we’d have a down payment we were comfortable with, and also gave us enough for these annoying fees that come up.
Step 3: Realtors
You’re not married to anyone that shows you a house. Remember, most realtors have skin in the game; they want your business and they’ll sell themselves. This doesn’t make them bad or unqualified, but they will work hard to get your business. Ask questions about their process, how much they keep clients informed along the way, how many people in the area they know, how many clients they have, if they represent both buyers and sellers (and if they’re representing both the buyer and seller of a particular home, meaning they get double the commission).
We ended up going with a real estate brokerage that is a little, well, offbeat. Their agents are salaried and their bonuses are based on customer reviews, so we felt even more assured that we would be getting unbiased advice about the homes and any offers we would make.
Once you find a realtor, do not be afraid to ask questions — even if they feel silly. Once we put an offer in, I had no clue what to do. My realtor hit me with a convenient checklist, but it was things like “secure mortgage broker,” and “schedule inspection,” and things within things, like appraisals, finding lawyers, and more. Do not be afraid to ask for clarification and step-by-step processes where needed. This will speed up the timeline in the long run.
Step 4: Negotiation
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This is probably the biggest piece of advice I can offer: Let go of the feeling that you have to get a “good deal.” This is ingrained in us from a young age — everything is on sale, and if it’s not, it’s worth waiting for until the price drops. So when you’re talking hundreds of thousands of dollars, it’s natural to want to get the most bang for your buck. But as long as you have an agent who knows the industry and the comps, you’ll be better off going in at a fair price, or asking for your “bargain” elsewhere. (For example, we came in at close to full asking price but asked for a credit toward closing costs. For us, having someone pay the out-of-pocket costs made more sense than saving $30-50 per month on our mortgage.)
Another part of this is that deals have fallen apart where the buyers and sellers are separated by small amounts, like $7,000 or so. While those amounts are nothing to sneeze at, in many cases, they come out minimal additional amounts in your monthly mortgage payment. I’m talking like, $50 or less. If the property is really something special, and you feel like it should be yours, don’t let an extra $20 worth of pride ruin the deal.
Step 5: Practicing patience
This is the one that killed me, friends. I wanted an update from my realtor daily — even if there was nothing to be updated on — because I was sure that everything was falling apart. There will always be things happening “behind the scenes” that you’re not privy to, and as awful as it is for us Type-A folks, we just have to trust that the process is happening (and restrain ourselves to only one “check in” email every couple of days).
Buyers’ agents and listing agents all are juggling multiple clients. They have to prioritize certain things (offers, negotiations, inspections), therefore, at some point in your process, you may not be at the top of this list. This doesn’t excuse days to go by without contact, but it does mean that “I’ll email you the details later” could be a day or two. In my mind, “later” means three hours. But it doesn’t always work that way.
Processes work differently in each state, but there’s generally a time where you’re sitting on your hands waiting. We’re in this stage right now — the appraisal of the house has been ordered, and then the title will get processed, so we can do nothing until the closing. It’s awful, but it’s helpful to have this break to (you guessed it) plan the logistics of move-in day.
Step 6: Celebrate!
You did it. You saved, you planned, you had only three or four panic attacks, and you’re moving in to your new home. Savor it. After the walk through and the closing and signing away your lives, after all of the people have left and you’re standing in your new, empty home, just stand and let it sink in. It’s yours, and you earned it! Now go start painting…
Another other Type-A home-buyers? What are your tips for surviving the process?
Congratulations on the new abode! This totally resonates with me. My husband and I just bought our dream home (a huge, century-home fixer-upper), and I could especially relate to #5 (though planning a wedding and dealing with multiple vendors whose definition of “I’ll get back to you shortly” was quite different from mine did give me a bit of preparation for this!). I also liked the reminder that there are multiple ways to look at whether something is a “good deal” or not. By the time we found our house, it had already been deeply discounted from the original asking price, and was a phenomenal deal for what it was. Therefore, while we asked the seller to come down a little bit based on the inspection, and negotiated for her to pay some of our closing costs, we weren’t interested in haggling just for the sake of haggling. We knew we would be willing to pay the asking price if it came down to that.
Now, can we please have an article about how to MOVE when you’re a Type A person? We just spent our first two nights in the new house, and I’m really struggling with the chaos of boxes everywhere and all my routines totally thrown out of whack! 🙂
Oh, man, I’m afraid if I try to write someone about moving it’ll end up as a 30-page rage monologue in all caps. I HATE boxes.
Huge congrats on your dream home! And major props for tackling a fixer-upper…talk about stress for a Type-A! 🙂
Moving as a type A is all in the prep (i.e labeling boxes per room, labeling “open now” boxes for immediate use, and then paying attention to where they’re placed in the truck and at home upon arrival, etc.) I’m way into moving prep, as someone who has moved a zillion times. Making sure things are well padded, secured, protected, and labeled before movers arrive is the way to go. Saves money on paying for move-time too.
But congratulations on your dream home! It sounds so cool!
The factors that came most into our house buying were (1) location (2) age (3) location. I knew exactly which parts of the city I was willing to live in, and I knew I absolutely did NOT want a “new” house, or anything within 20 years of “new.” When I first met with our Realtor (we did use a buyer’s estate agent to represent our interests and not the seller’s, courtesy of our credit union), I told him “I want to see properties within these geographic limits, this is what we want for square footage and bedrooms, this is how much money we have to work with for a down payment (rather a lot, nearly 20%), and DO NOT show me ANYTHING built after World War II.” That last one made him move us from “difficult and particular customer” to “waste of my bloody time.” Nonetheless, he sent his minions off and managed to find four or five properties to show us, one of which was almost EXACTLY what I had ordered. We saw it on Monday, made an offer on Tuesday, and by the following Monday we were under contract.
What we found was a 1937 workman’s cottage with a 1954 addition, 3 br 3 ba, 122 square meters, five km from the centre of the city, with a number of structural problems (some of which we didn’t discover for years after). On our agent’s advice, we offered 97% of asking and the seller snapped at it so quick, you would have thought he was a large-mouth bass and I was a fishing-tournament entrant. (Turned out later that he was desperate to get out from under an adjustable-rate mortgage currently running at 13%.)
In the end we paid $144,500 US in 1997 dollars. We’ve probably sunk $15,000 into repairs and could easily spend another $20,000 on foundation and HVAC. But it’s still looking a good investment aside from being in exactly the neighbourhood I wanted to live in 40 years ago, when I moved to town. Our 2017 property tax assessment came two weeks ago, and the tax district said “erm, we’re assessing this at $456,000 market value.” 200 per cent appreciation in 20 years isn’t so bad, I suppose.
What matters is what it’s worth to you, and getting a sensible mortgage. We paid close to asking for our current house, before the market tanked in the US (but not at the top of the bubble). We had a 20% down payment and started with a 30-year fixed mortgage, so even when prices dropped, we were never underwater. 16 years later, we’re on our third mortgage after two refis, the house is worth about 40% more than we paid (more than average appreciation around here) and we’ve redone the kitchen, dining room, living room, master bedroom/bath, and basement. We love it here, and we can afford to stay as long as we want.
Or if you’re not type A, look for a place to rent in a given location. Vaguely know how much mortgage you could get because you just saw your bank guy to deal with student loans and you got side-tracked. Stumble on a house for sale, visit it “cause it’s cute!” and immediately on the spot put in an offer.
And become proud home-owners in a month. Lol
Your post makes me realize how lucky / blissfully ignorant we were, because I absolutely can not relate at all. I’m getting stressed just reading it! Renovating a 150 year old farmhouse while living in it though… that’s a whole n’other story!