It’s entertaining to watch a 22 minute episode on HGtv of a person looking at homes. It gives you a snap shot of the decisions that go into such a huge commitment. I also like watching it because sometimes, you can compare the markets in different cities without having to comb over Google searches. By the end of the episode, the person arrives at an offer that turns out well for them and their future. If only it were that easy in real life.
These days, I find myself having a different list of things that matter as I look in the home search. Because of that, I’ve encountered certain conflicts I wasn’t prepared for. The market as a whole does a poor job of educating us 99 percenters about the process of actually buying a house. So here’s a few things that might help you when you embark on your own.
Know what side of the table you’re sitting on. Some areas, it’s a sellers’ market. Other areas are bountiful with opportunities for buyers to strike gold. The area I live in is far more accessible because of metro system that’s been extended into metro DC. Since I’ve lived here, there’s been 3 new townhouse communities built. The upside for me as a buyer is that people are pressed to sell their property for 3 reasons; their job is transferring, they want to move to a single family home, or they’ll have the money from a sale to move closer to DC. Being a newbie in a buyers’ market gives you so many options to get what you want and save money.
You don’t have to max out your budget. This is the trick of shows like House Hunters. Buying a house that’s over budget might not seem like a big deal if it has everything you want. However, the true monthly payments will make a dream house quickly feel like a nightmare. So when I see articles about millennials opting not to buy homes, it’s not as elementary as they can’t afford to be homeowners. It’s more accurate that they can’t afford the homes they want or they can’t afford to live in the city. I can relate because I was adamant about not wanting a cheap fixer-upper. But I learned that once you build equity, you’re able to customize and upgrade.
Your house is for the future. Even though I’m currently single, I maintain the visual of kids and a dog running around. It’s easy to buy as a single person. However, when you expect to get married and start a family, the home-buying process becomes overwhelming. The details matter. You have to have an idea of the schools in the neighborhood, the subdivision’s diversity, the proximity to parks, all of the little things that fosters a family’s growth. This also ties back into not maxing out your budget. The expenses attached to raising children add up quickly.
30 year mortgages aren’t the only option. I found this out when a house went on the market with an assumable mortgage. No one had ever told me about this. I knew I’d never be able to afford the payments of a 15 year mortgage. When I went back to the bank, I found out that some lenders will do unconventional mortgage terms for buyers. Life happens. Neighborhoods change. Not everyone will live in 1 place that long. If you do enough research, you might be in a position to pay off the loan faster. Even if it costs you a few hundred dollars extra per month, it could be worth it in the bigger picture.
Resale value matters. Many urban areas are undergoing swift gentrification. We all have read the frustrations of renters that are being priced out. Nowhere is this more evident in than in areas like San Jose and New York. Harlem is an area that was exclusively black and Latino for decades. Now? It’s normal to see a Hollywood A-Lister living among the culture. Older homes boast the character and potential that wealthy buyers or investors covet. Buyers that can afford to do so will pay top dollar to live in an area that is upcoming or close to an area of status; as is the case with cities that are Silicon Valley-adjacent.
I made an offer on a home about a month ago, only to have it rejected by the sellers. My realtor called the other day to tell me the sellers had reached out asking if I was still interested. With no other offers, they’d lowered the asking price. The experience, though, left a bad taste in my mouth. I can say I’ve learned more information about the area and owning in this area.
The single most important purchase you’ll make in your life is a home. There’s so much to take into consideration. Above all else, you have to be mentally ready. Don’t go into the process because you think you should or because it’s the next thing on your list to do as an adult.