#houseshopping

Let’s Buy a House

This is probably the most exciting and daunting sentence anyone could say in today’s economy! I’m a second generation American and the first in my family to have purchased a home with my own financial resources.

The house buying experience is still new to me and I honestly didn’t know what to expect the first time around but having gone through it twice now, I am starting to feel way more comfortable with real estate and thought I would share my thoughts on this whole process.

Getting Ready

When are you really ready to become a home owner? Answering this question is the first real step in making this life-changing decision. I remember taking an honest look at my finances and my happiness in renting, before deciding that home ownership would outweigh the lifestyle of renting a small apartment. Home ownership sounds dreamy but inheriting a 30 year loan and needing to save for emergency housing repairs is less ideal than renting year to year… unless, you truly want to and can afford to turn your cash savings into a physical asset for investment.

Mortgage Shopping

Once you have decided to take the plunge, stop impulsively spending and start saving your cash for at least 3 months straight! This can help your cash flow settle so when you start applying for mortgage rates, you don’t have to be limited by impulsive shopping habits eating away your potential down payment reserves.

I hate mortgage shopping because it never feels like you can truly trust a loan officer to tell you the best rate. Then you have to also consider which type of loan and loan company would be most convenient for you and your house shopping goals. In my experience, I have had the pleasure of getting my loan application pre-approved in less than 48 hours but for some people, this step could take way longer! My tip is for you to apply to 2 or 3 mortgage companies for pre-approval based on their customer ratings and support for first time home buyers. I have worked with a personally referred loan officer and I am currently with AmeriSave. Both have been very helpful but both processes were also extremely different! If you are new to the mortgage process, definitely find someone who will take time to educate you and give helpful advice along the way. Responsiveness is also key! A good loan officer is someone who will text, email or call you as soon as possible. To help make the preapproval process easier, make sure you save digital copies of your pay stubs, tax returns, bank statements and credit card statements in a cloud account so you can quickly email or upload these files to the mortgage company. They’ll usually ask for 6 years of financial records but they will make a decision based on the last 2 years of your financial health. If your credit score is below average, be prepared to pay for points to reduce your loan rate. Or, if you are a first time homebuyer, you will need to have at least 5% of your house shopping budget in cash savings to prove you can afford the down payment. For a house shopping budget of $250,000, this is at least $12,500 in your savings.

Finding a Realtor or Real Estate Agent

I have worked with both friends and randomly assigned real estate agents for house shopping and both experiences were great! The pros of working with an acquaintance or someone who knows your social circle is that they will likely be responsive and focus on what you truly like and might need. The con is that it could get awkward if the house hunting becomes unsuccessful. Working with a stranger or randomly assigned agent can also be helpful if they have great connections in real estate but keep in mind that good agents might be less likely to be available for you to schedule tours or answer your calls right away due to scheduling conflicts. In my opinion, your agent is essential to getting your foot, literally, in the door of any dream house. In today’s economy, many houses are getting bought by investment firms with cash offers, so it’s essential that you find an agent who will call to schedule your house tours and draft your offer documents quickly, even if it’s on the same day that you want to see it. My strategy in house shopping is to look for houses that are under your actual spending budget, and then to schedule tours on the same day the home is listed. If there are no red flags, make an offer with at least $5,000 in benefits for the seller. Don’t offer too much above asking price or you could end up in a overpriced house. Also, don’t get too caught up in your HGTV dreams. It’s better to get a house you can slowly renovate into a customized home than to buy a pre-designed house that’s built with cheap DIY materials.

House Shopping Tricks

My favorite app for house shopping is RedFin because it will update your search criteria in real time and email you when your preferences are available in new neighborhoods. RedFin also has a way for you to schedule an in-person tour or a virtual tour using a RedFin agent for free. This is helpful when you are shopping in a popular neighborhood and want to be first to tour a house.

Another tip is to Google the reviews, crime rates and school districts for the neighborhood. And yes, there are actually many free websites that let you read city or neighborhood reviews to learn about local taxes, shopping or entertainment options and other random stuff the residents care about.

Getting Lucky

In both of my experiences with house hunting, I have learned that luck is really the final factor! It can be really time consuming to research and tour houses but eventually, even a good offer will still need some luck for the seller to sign the house over. I have even developed a tradition of summoning luck and favor from the House Fairies by doodling house wishes in a special journal and praying over it! 😂 Whatever good luck charm that you decide to use, just know that house buying is really about preparedness meeting opportunity at the right time. Eventually, resilient buyers will get a good home!