There are plenty of common sayings about houses and homes that illustrate the importance we place on finding the right dwelling place for ourselves and our families. However, finding that first home is a daunting prospect.
After a life of living with parents and then maybe renting for a while, making the leap to homeownership is exciting but also filled with anxiety and potential missteps.
I speak from experience. After graduating from college, I moved to my new hometown, started a new job and decided to rent for a while to get the lay of the land. I learned about different neighborhoods, favorite activities and locations and got a feel for where I’d like to end up more permanently.
Then, I got engaged and my fiancé and I decided it was time to look for our first home. Here are the five most important lessons I learned from our journey:
Sure, it’s more fun to daydream about future backyard barbeques, but the budget has to come first. There is nothing worse than setting your heart on a beautiful home only to find out it is out of reach. Also, it’s not a good use of anyone’s time to look at homes that will never be.
So, how to set a budget? You’ve got to know how much of a housing payment you can afford. Many experts recommend that this monthly number should be less than 30 percent of your monthly income, but that includes the mortgage payment, home insurance and utilities.
Mortgages are trickier than you may realize. For example, we had to get preapproved for a mortgage loan and realized we would have to cover closing costs – several thousand dollars – and put 20 percent down to avoid private mortgage insurance. Or we could go with the USDA loan – which only certain properties are eligible for – but exempts you from making a down payment. Finding a bank, like a local credit union, that you trust to help you through the process is important.
Also, it’s best to be super conservative in your budgeting. There are so many hidden costs in home buying, like the difference in taxes between school districts or plot size. In our home search, one house we looked at was just over a school district line and ended up having much higher taxes. Previous tax information on for-sale property is available online through websites like www.zillow.com. Be sure to factor it into your house-hunting budget, or you could end up a couple hundred dollars off – and that’s not a cost that ever goes away, either.
It is easy to go into a home and fall in love with the wood-burning fireplace or a sparkling swimming pool; but were those features important to you in the first place?
Instead, write out a list of non-negotiable features of the home. For example, do you want a single-family home or townhome? Is there a location need to be met, like a particular school district or commute time? We were trying to find something between the two cities where we work, which are 30-45 minutes apart.
By writing out these must-haves, you are removing some of the emotional decision-making that leads to buyer’s remorse later.
The right real estate agent will help you stay focused, on budget and on time. Ask friends and family for recommendations, and then do your own investigating. Schedule a meeting with a few prospective agents and ask them some pointed questions:
Are you more often a listing agent or a buying agent? Do you require an exclusivity agreement? How many buyers have you represented this year? What was their average home price? How long did it take for them to find a home? What is the average difference between the list prices and the final sale price? What licenses do you carry, and when was your last license renewal?
Getting answers to these questions up front will help you find the right agent for you. Also, make sure that the seller is paying his/her fees upfront. Your real estate agent can help you to make sure you aren’t getting left with any additional fees and can help you negotiate in the process.
Finding the right home for you requires long-term thinking. Moving into a house is hard work. It takes several years to earn back the money spent on closing costs. Therefore, look at homes that you can live in for at least five to seven years so that you don’t lose money on this large purchase.
Also, think long term by considering if the home is resalable. A modern home in a traditional neighborhood may appeal to you, but it may be harder to sell when you want to move again.
Almost anyone can manage a few coats of paint by themselves, but demolishing a bathroom or laying brick for a deck or patio? These are more labor-intensive, do-it-yourself projects.
For example, we looked at a house that had no curb appeal. The lawn was burnt, uneven and had been damaged by an aboveground pool that was installed improperly. We realized we would have to do extensive work and would have to rent earthmoving equipment to make things right. We didn’t have the time or money to be able to do it, so we had to pass on the home (even though the home itself was gorgeous).
If you like to watch HGTV but know you can’t handle large DIY projects, be sure to narrow down your search to newer homes or those that have been recently remodeled.
Homeownership is considered part of the American dream for a reason, but finding that home is a bit less glamorous. Putting effort and time into the search will help you find the perfect place to lay your head.
Sarah Landrum is a freelance writer and the founder of Punched Clocks, sharing advice on finding happiness and success in life and at work. After graduating from Penn State, she moved to Harrisburg to start her career – and is loving every minute of it. Follow Sarah for more advice and a glimpse into the many, many things she learns from @SarahLandrum