Like many millenials, I was anxious about the homebuying process. I did my research and we were pretty prepared financially but it was still a lot to deal with. I’m no expert, but maybe my experiences and the things I learned will shed some light on the process for someone out there.
Just on the emotional side, it was a big undertaking. Committing to a 15-30 year mortgage is a big freaking deal! I read
- Do your research. This part is easy. Being a homeowner is almost like being a parent. You become part of a special club and people will be all too eager to give you advice. Take advantage of that. I’m a bookworm so I read. I recommend “NOLO’s Essential Guide to Buying Your First Home”. Part of your research should be researching your finances. Pull your credit on www.annualcreditreport.com (that’s the government approved free one). Look at a mortgage payment calculator, and use those number to play around on the budget app of your choice and see how the cost of your mortgage, HOA fees, homeowners insurance and upkeep (lawn service, etc) will affect your lifestyle. It’s always a sticker shock at first but after the first year, you realize that
- Save as much money as you can. There is no such thing as saving too much money to buy a home. Most people only think about the down payment and the monthly mortgage, but there are a lot of additional monies you’ll pay upfront including closing costs, home inspection and appraisal (which you may do on more than one house if you make multiple offers), title survey, homeowner’s insurance deposit, and HOA fees. Then there is upkeep. Our sellers had done pretty well but since the home had been on the market for a year, there were some minor (but not free!) things we had to get done. You will inevitably want at least one new piece of furniture and to decorate. The costs add up quickly. You can’t, and shouldn’t, try to do everything at once but some things (like floors, windows and painting) are easier to do before you move all your stuff in. But that will delay your move in date. If you can afford to pay for two places at once for just a month or two to take care of that stuff, it will save you a lot of inconvenience down the road.
- Choose your realtor wisely. A good realtor can make your home search run much more smoothly, and a bad one can ruin the experience. We bumped into our realtor while out doing errands and talking about mortgages. I had misunderstood something and he introduced himself and gently corrected me. He didn’t make a hard sell or even give me his card, which is what made me tell my husband to go back and get his contact info. True to that first meeting, our realtor was always considerate, honest, and easygoing. He let us take charge and acted as a facilitator. If I suggested a home that didn’t make his curated list of places to visit, he explained why. He showed us homes at all points of our price range and asked lots of questions about what we did and didn’t like. In Texas we have a website called Homes and Rentals (www.har.com) where you can look up your realtor. Through that site I was able to see that in the past 2 years, he had sold over 10 homes, most of them within our price range, on the side of town where we wanted to move. So I was confident that he knew what he was doing.
- Figure out what you want. Even if you’re buying a starter home and plan to upgrade in a few years, you don’t want to be miserable during that time. Also other factors like an unfavorable market for sellers or a change in employment status can affect your plans, which may mean you end up staying in your starter home longer than you thought. What can you compromise on and what is a dealbreaker? I wanted at least 2500 square feet with at least 3 bedrooms, a walk in closet, and a decently sized kitchen. I also preferred not to be the only Black family in the neighborhood, but ultimately I was willing to do so if it meant meeting all the other criteria. (What can I say, I’m a material gworl. )How did all of that shake out? We could have done a new construction but on our budget, we would have had to get a significantly smaller house or live in a significantly worse school district. Since I’m pro-Black everything (I had a black realtor, a black mortgage broker, and a black home inspector who were all very good) I had some feelings about it. Ultimately I had to choose what was best for our lifestyle needs, our return on investment, and our future family. The school district is mixed enough that our kids will at least have a handful of black classmates and not be the only ones, which is fine. Houston is not Atlanta and it just doesn’t have the same density of middle and upper class black folks. But in the four years since we’ve been here, the demographics are changing in our favor so we lucked out.
- Be realistic about what you need. Who are you? How do you live today? How do you think you will live in 5, 10, 20 years? These are the questions to ask yourself. Pre-pandemic when we bought, my husband and I worked on opposite sides of town and there was no way for either of us to live next to the office without creating a hellish commute for the other one. We picked a happy medium where, depending on traffic, we both have a 25-40 minute drive to work. In exchange we wanted to be super close to the grocery store, drug store, and some good takeout options. We don’t have kids but are planning to, so the quality of the school district was a factor since we were going to be in our house for the long haul.
- Prepare to be your own landlord. Unless you are living in a condo/townhome community where the HOA pays for lawn upkeep and other repairs, all of this now falls on you. Are you going to hire a lawn service, or commit to cutting your own grass every week in the summer heat and remembering to water and feed the lawn at night? If you’re not getting a new build, how old are major structures like the roof, HVAC, and water heater? Are appliances included and if so, how old are they? Home ownership is when you have to get really serious about an emergency fund because home repairs are expensive. Yes, your insurance will cover certain things but typically you have to pay out the deductible, plus a certain portion of expense upfront and then wait to be reimbursed. Can you afford to pay $5k-15k for immediate mitigation if a tree falls through your roof? This may seem basic but you also need to keep your house clean. It can be a big jump going from an 800 sq foot apartment to a 2500 sq ft home. Will you be scrubbing the shower and tub, sweeping, mopping, getting down on your knees to clean the tile grout? Dirt doesn’t stop coming, and if you don’t clean your house thoroughly yourself or by hiring a maid service, your appraisal and resale value take a nosedive.