So, you want to a buy a house. Well, my friend, you’re in luck! In December, I bought my very first house. Even though it’s only been 6 weeks, I have loved every minute of it except for painting. I did not love that one bit. Anyway, since sharing the news, I’ve had lots of interested buyers ask me about the process. In response, I thought I would do a quick Q&A about the ins-and-outs of buying your first house!
Am I an expert on home buying? LOL No. But I am 24 years old and (still) mostly clueless about the world, so I feel that makes me pretty relatable. Fair warning, dear reader: the home-buying process is hard. You will cry and yell and curse your piddly bank account on the regular. But in the end you will literally own property, and that’s pretty cool. So, let’s get started!
Q: What are the pros and cons to buying a house?
A: On the plus side, a mortgage payment will typically be cheaper than renting an apartment of the same square footage. Unlike renting, you can own pretty much any pet, make major renovations, and potentially use the property for profit as a rental unit.
However, owning a house means paying for all repairs, entering a long-term contract, and paying a billion deposits for things like garbage, water, and so on. It also means routine maintenance, like mowing the grass.
Q: Can you afford to buy a house?
A: The answer might surprise you! Mortgages are actually very affordable, but the tricky part is clearing the down payment. As a first time homebuyer, you’ll be expected to pay 5% of the sale price upfront. If you can afford the down payment, chances are you will no problem once the house is actually purchased.
Q: Should you get a realtor?
A: Depends. I had a realtor, and I thought it made the process way easier. A realtor is basically like a spirit guide with really organized binders. However, it’s possible you may not get as good of a deal on your house as the seller will pay your realtor fees. For a first-time buyer, I’d use a realtor. But remember! They will probably advocate a quick bidding process and/or discourage you from negotiating when you absolutely should. As long as you go in prepared, you’ll be fine!
Q: How much should you spend on a house?
A: While you can always take on roommates to help pay the mortgage, it’s critical that you are able to afford the house on your own if you’re the only one on the deed. For help with the specifics, check out Zillow’s mortgage calculator. It’s not perfect, but it’s a great place to start!
To speed up the process, you can apply for preapproval at your bank. Basically, this is just your bank’s way of saying, “Yeah, as long as you find a house in this price range we’ll spot you.” Remember: Your bank will approve you for a number MUCH higher than what you can afford because they profit from your inability to pay through interest. That being said, look for houses BELOW your preapproval price unless you just like being broke.
Q: What can you expect while touring homes?
A: It’s best to establish a few deal-breakers to save yourself from touring 600 homes any given weekend. My must-haves were a bathtub, garage, and a fireplace. You’d be surprised how many options that eliminated!
After you tour one or two homes, they will slowly begin to blend together. For that reason, takes notes at each house on the things you love and hate. You may spend a little longer at each house, but you will thank yourself later. Trust me.
Q: You found a house, now what?
A: You did some shopping and found a home you’d like to bid on. When entering negotiations for the price of a home, there is one guiding question to ask yourself: Would you rather have a lower monthly payment or more money upfront?
If the answer is a lower monthly payment, you will want to lower the sale price of the house. If you’d rather have more money upfront for repairs and/or to help with the down payment, you will ask the buyer to contribute more in closing costs instead of reducing the sale price. In the end, it’s all the same money. But do you want it now or later?
Q: Is it a good time to buy?
A: Winter is typically the best season for buying a house because the majority of homes are bought in the spring/summer. This means you are competing with fewer potential buyers for your house. However, purchasing a house in the winter means you could be juggling the holidays with packing (which totally sucks) and/or doing all of your decorating in the dark because the sun basically sets at noon. Also it’s really cold.
Q: What happens after a seller accepts my offer?
A: Paperwork. So. Much. Paperwork. You can try to read everything thoroughly, but if you don’t understand it don’t feel dumb because literally no one does. Not even your dad. The most important thing to do is make sure your closing costs, repair cap, and sale price match on ALL documents. If these numbers align, you’re (probably) in the clear.
Q: What should I expect at my closing?
A: Once all negotiations are through and your bank approves the loan, your loan officer will set up a meeting with the title company. There, you will sign more papers until your hand literally stops. If you have a cool realtor, you might also get a goody basket.
Some people say that you should expect to spend a few hours at your closing, but mine only took about 45 minutes. I brought my mom along for good measure since I am buying the house alone, and it never hurts to have a second pair of eyes!
Q: What if I don’t like my house after I buy it?
A: Sell it, rent it, and re-evaluate your decision-making skills.
Hopefully this has been a helpful start to your home-buying journey! I know how crazy and confusing the process can be, so if you have additional questions please feel free to ask away below! Good luck, and happy hunting!