So you want to buy a house? Awesome, so did we and today we are the proud owners of a four bed, two bath cape cod right here in Cincinnati. The process, if I may say, was not easy and still not all that complex but there are a few things I wish I had known before really starting out search.
Let me give you a little background: Ben and I have been living in a one bedroom apartment for just under a year now. We love our little place, rent is not high and it is in a good neighborhood. BUT it is a one bedroom. Two people, one bedroom; did I just title an awesome to be sitcom? Yes? No? Well…I think I’m funny.
Yes I love my husband to death and he I. Yes I want to see him as often as I can (still in that in love newlywed faze if ya can tell) and when we moved in we really couldn’t furnish more than our three room space. But OH MY GOD we have so much CRAP. I am a clean person and everyday when I walk in and see all of the CRAP cluttered in this apartment I want to SCREAMMM. Ben, being a male, could care less (he is a clutter lover). With our lease coming to a close this June 31 we decided we should start looking this past February in order to see what’s on the market and what we can afford. Our first idea for our first home was to buy a fixer upper, something that was foreclosed on and we could get for under $100k. This, to us, was a smart move. We could keep our monthly payments under $1,000 and fix it up as time went on. Great idea right?
WRONG! Cincinnati is a pretty darn affordable town but when you want to stick to certain neighborhoods, your price range slowly gets higher. The foreclosures we were thinking did not exist; we wanted to be able to move in! Yeah we might save tens of thousands of dollars on the initial purchase but we would have had to sink twice that amount just to make many of those houses liveable. We did not want to be in this apartment past June.
So, we upped our price range a little and looked at EVERYTHING. Perfect houses, little houses, crap houses, big houses. We were freaking Goldie Locks and the Three Bears when it came to houses. NOTHING was right. We decided to start looking at things around the $150k price range and suddenly we felt like we could find something. We put an offer in on one house that I instantly fell in love with; the seller had accepted an offer at noon that day. I was devastated, think sobbing on the couch while your husband rubs your back soothingly even though he’s laughing at your dramatics. After that we bounced back, me a bitter brat, and found the house we can now call ours.
SO, what went into all of this?! I mean, we all know we can look online and find what is for sale but where the hell am I supposed to start? Do I just start looking? Do I figure out a mortgage first? How much is too much? We had no idea where to start, we just jumped in. Lucky for us, we had an awesome real estate agent who helped out with just about everything. So, without further adu, since you painstakingly sat through my rushed story, here is my Guide to Buying Your First Home.
Figure Out Your $$$$$
The absolute first step, whenever you are looking into ANY kind of big purchase, is to figure out how much you can spend. For Ben and I this meant looking at our current expenses, including student and car loan, our monthly income AND our savings plan. This gave us a good idea of what we would be comfortable spending on monthly house payments which, in turn, showed us what our price range would be for our house. This is VITAL, without taking a look at what you have on your own, you have no idea what to say to a mortgage broker or a real estate agent. And you cannot just wing it. DO NOT GUESS. We are talking hard earned money here and you don’t want to be breaking open the piggy bank each month when that payment is due.
And do not forget that with a house will come some major responsibilities. If something breaks YOU have to fix it, not the landlord or your parents. You’re in charge and with that comes a lot of financial responsibility so start off right.
Shop Around for the BEST Rates
You have a checking and savings account with Bank A but over at Bank B you can get a .05% lower interest rate on a mortgage. Where do you go?
If you answered Bank B, you’re at an A for this lesson…so far….
Do not just see if you’re qualified at one bank and stop there. You’re going to be working hard to keep your house up and running and paying those payments and you deserve the best rate possible! The truth is that each and every bank has different rates they can offer you so find the lowest one, this way your money goes further because when you get a look at the closing disclosure and see what you will pay, in total, over a thirty year mortgage your jaw is going to hit da floor.
Pick a Real Estate Agent You Trust
Ben and I had an amazing real estate agent who is a part of his families real estate company; we are big fans of all things family owned. He was real with us and each house we went into, he went as far as pointing out what was wrong with a few houses we went into. I am a firm believer that most people out there are good but I am not naive enough to just say you should trust whoever you come into contact with. You are going to be spending a lot of time with this person and you need to trust him or her. Our real estate agent even hooked us up with the mortgage broker we ended up going with. This is your person for the next few months, trust is vital. We are young and have no idea what we’re doing, go with an agent who has been doing this for awhile.
Be Prepared to be Let Down
Look, you’re going to go into a lot of houses. You are going to hate most of them and love few. Those few you will want to put an offer in on.
I hate to break it to you buyers but right now, at least in Cincinnati, we are in a sellers market. Houses go up and come down days later, we actually saw one house that went up at 7 am one Sunday and was off the market by 9 that same night. What does this all mean for a buyer though? Well, it is simple, you have to commit to looking if you are serious about buying. We were out house hunting every night from February until March; then we were out with our agent two or three nights a week.
When we put in our first offer, I was positive that house was ours. It was a perfect little house with three bedrooms and an awesome second floor master bed with a walk-in closet. When we got the call that they had already accepted another offer I was devastated (still am a little, I won’t lie). I cried and threw an adult temper tantrum, if that wasn’t my house then I didn’t want one. I really do think I said that, not a proud moment for me but eh, oh well.
Ben was the one that got us up and moving after that and guess what? The next house we looked at is the house we now own! I believe in God, I believe that there is a reason for everything in this life, and I believe that you will end up where you are supposed to be as long as you trust in Him. Though you may not believe in Him, you need to believe that the house that is meant for you will come! It is a long, draining road, I can tell you that much and you HAVE to keep an open mind.
You’re young and don’t have millions in reserve, and if you do I don’t wanna know ’cause I’m already jelly, so you aren’t going to have a mansion. Go in with realistic expectations and, if your story ends up anything like ours, you will be absolutely in love with your first home
And Then There’s the Closing
Your closing date is going to change. Accept it, prepare for it. We were set to close on April 20th and thought we were ready to go. That Tuesday we got four different calls and three different emails from both our realtor and our mortgage broker saying that we had a bunch of paperwork that needed to be signed and sent in three days before we set the closing date….this was two days before we were supposed to close. Awesome, right? I was pissed. I have a low fuse when it comes to stuff like this, i.e organization, and I was really upset. I wanted my house NOW! Long story short, we closed the next Thursday. We were lucky for two reasons. 1.) We were only pushed back a week, I have heard horror stories of closing dates being pushed back multiple times; and 2.) Both of our bosses were extremely flexible.
My advice is to continue communicating with three people: mortgage broker, realtor and your supervisor at work. This will (hopefully) help the closing go smoothly and will make it easier on your work relationships.
Good luck, keep your head up and trust that you’re going to get YOUR HOUSE! Oh, and P.S, there is going to be a TON of work that needs to be done no matter what, but more on that later…