Home Buying for Brokeasses Part 7: 9 things to do when buying your first house

On September 11th, 2014, I officially closed on my very first house. A sigh of relief for the ages.

It's kind of funny to think that this all worked. That I'm actually a homeowner now. It took SO LONG to get here. It wasn't easy. It certainly wasn't fun. And it most definitely wasn't a guarantee. Up until the day before closing, I was still convinced that I'd fucked something up and that it would all fall apart.

Part of this feeling is my own anxiety issues (that's an entirely different conversation). A larger part is the real truth; that my personal history as one who cared so little about her finances for so long had a dire effect on the homebuying process. So the question remains... if I had to do it all over again, what would I do different?

The answer? Almost everything.

So, without further ado, here's my list of the 9 Things to Do When Buying your First House.

I made this cool watercolor of a photo of my new house with the amazing iPhone app Waterlouge.

I made this cool watercolor of a photo of my new house with the amazing iPhone app Waterlouge.

9. DON'T BUY A HOUSE WITH A BAD INSPECTION

This may seem like obvious advice, but I think it bears repeating. Especially in the post-HGTV and Pinterest "I can DIY anything" movement, because, well... you can't. The odds are high that whatever fix your planning for the broken/leaking/rotting/outdated thing you hate is going to require outside help. That means money. Brokeasses don't HAVE money. That's why you're reading this, right? 

Though I've never discussed it in this series before, I actually went through the first stages of the home buying process with a completely different property back in June of this year. It was a HUD house. A great mid-century ranch in a quiet, well-kept neighborhood. It met every item on my wish list at a great price. So I put an offer in and had an inspection. The news wasn't good.

If you're looking to invest in property, or flip a house or whatever, going forward with the purchase of a property with a less than stellar inspection may be an okay decision. But if this is your first house and your inspector tells you you've got "plumbing issues," "leaks," "mold" or "foundation problems?" RUN.

Look at it this way: If you buy a house that an inspector warned had plumbing issues and you aren't a plumber, you've got no one to blame but yourself. Why open the door to potential disaster if you don't have to? Honestly I knew I made the right decision to walk away from the deal almost immediately. I still love the aesthetics of that first house, but the one I ended up with has many of the same features but doesn't need any of the work. It's win-win.

8. STAY AWAY FROM REAL ESTATE WEBSITES

Zillow, Trulia, Realtor.com, Homefinder... just a few among hundreds. Just put in your zipcode and it's all there for your viewing pleasure. So easy, right?  But truth be told, these sites can do more harm than good. Many are plagued with outdated information, chunked in rental properties, "Make Me Move" properties, and "coming soon" houses. Zillow is basically 80% filler.

Beyond the inaccuracies is the whole "...but I saw it online" factor. This will crush your spirits and kick you in the teeth EVERY TIME. It's no secret that pictures lie. Sure, the grand staircase may be just as grand as it looks from the shitty Realtor.com pics on your Android, but the whole house has a drop ceiling you can't see in the pictures. A drop ceiling. WHAT ARE THEY HIDING?! Also neighborhoods are never captured accurately. A big, gorgeous bungalow with an all-new kitchen is only in your price range because it's on a 35-MPH road next to three abandoned houses.

So don't get hung up on the online aliases houses keep. They're often just as phony as an OK Cupid profile. Don't fall for the fantasy. Trust in your agent to show you the good stuff. If you can't do that, get a new agent!

7. SEE A SHITLOAD OF HOUSES

On that note, see as many houses in person as humanly possible. Nothing will show you faster how realistic (or unrealistic) your expectations are than seeing a property that "meets your needs" live and in person. 1,000 square feet on a listing flyer you're reading in your 400 square foot apartment seems huge. But in reality, it's not large at all. I saw less than 20 houses but it was at the very first one when I realized that my original wish list want of a place with 800 square feet or more was entirely too small. I'd have to scale up to get the amount of breathing room I was craving. 

More than anything, though, it will get you familiar with the neighborhoods you're looking in and give you a better sense on the whole of what real estate even is. Plus, you can't see bad smells in photographs. And those smells? They're NEVER EVER going away.

6. TRUST IN THE GOVERMENT

As you've learned from previous posts, I ended up going with an FHA loan. As is perfectly stated on Investopedia:

For many first-time homebuyers, a Federal Housing Authority (FHA)-backed mortgage makes buying a home easier – or possible – thanks to less-rigid borrower requirements:

-A low minimum down payment (currently 3.5%)
-Reasonable credit expectations
-More flexible income requirements

Compared with providers of conventional loans, providers of FHA loans are willing to look at the whole picture rather than dismissing a borrower for falling short on a particular criterion.
— Investopedia

It's worth it. My mortgage payment is still manageable and I kept a ton of cash in my pocket by not have to fork over 20% down. I can, you know, actually buy paint and a new fridge now. Thanks, government-backed loan!

5. DON'T SETTLE

Yes you really can have everything on your wish list. Unless you want, like, an indoor pool or something. I guess should rephrase that. Within reason, you really can have everything on your wish list. There may be trade-offs in the process, like switching your focus to a different neighborhood a bit further off the path or realizing you don't really need three bathrooms. But if you want wood floors, don't stop until you find them. It may take awhile, and your Realtor might hate you in the end, but wait until it feels right before you pull the trigger.

4. GET A LAWYER

The lesson here is always listen to your Grandma. Her advice to me really early on in the process was to make sure a lawyer looks over the Purchase Agreement before I signed it. I didn't. 

And, as you've probably guessed, there ended up being a huge issue with part of the Purchase Agreement. A big enough issue that I am now forced into being a landlord for three weeks while someone else wraps up their rental lease in my new place. Nothing taints a house closing more than not being handed keys and knowing it was 100% preventable.

So you don't have a lawyer? Welcome to the club. It seems hard to find a lawyer, but I recommend these tactics:

  • Ask on Facebook. One of the random people you were in an improv troop with in 2005 totally knows someone who is a lawyer. 
  • Check out legalmatch.com. It's a free service that matches you with a lawyer in your area that specializes in the area you need assistance with. There's a whole section for real estate law. I tried it and got three or four matches, all located within a ten-mile radius.
  • Ask your mom. She knows everything. Mom not lawyer savvy? Ask your best friend's mom.

You should expect to spend some money, but do not agree to spend more than you're willing to. But one hour with a reasonably priced lawyer may make all the difference.

giphy.gif

3. MAKE SURE YOU DON'T GET BULLDOZED INTO ANYTHING YOU'RE NOT COMFORTABLE WITH

While my failure to get my contract looked over before I signed was mostly because I don't have a lawyer at the ready, I was also pressured by my agent to sign the deal quickly. "There's other interested parties," she told me. Which was a load of crap. There was no one else interested in the property when I put in my offer. I found this out when I asked the guy I was buying it from at closing how many other offers he had gotten and he said, "What other offers?" Did I mention yet that my agent sucked? 

Lawyer or not, I signed a binding legal agreement that I wasn't confident in because I was pressured into doing so for fear that I'd lose the deal. This is one of the worst feelings ever. Long after the ink's dried, I STILL feel like a sucker. Even though I'm now okay with how it all worked out, I still can't shake that feeling.

Putting a real estate deal together is weird and tricky and can seem incredibly overwhelming. If you're in spot when you feel pressured to take a deal you don't like, TAKE A STEP BACK. Don't let fear guide your decisions. If you really don't know what to do, ask you friends and family for advice on what they'd do in your situation. Both my mom and Ali, who'd just bought her first house, were extremely helpful during this decision making process. The best women I know. 

2. WORK ONLY WITH PEOPLE YOU TRUST

In all honesty, I think that the home buying process for me was tainted early on by the process the people I ended up working with. My agent was an old lady who insisted on texting me even though she was terrible at texting. She purposely avoided showing me houses in cities that she didn't normally work in. She was incredibly old-school, not Internet savvy and lied about her lack of familiarity in working with HUD houses and FHA loans. She'd set up meetings and showings at the last minute, and then arrive 20-30 minutes late. She was also impatient, talked down to me and complained constantly that I was "indecisive" and just needed to "stick with the plan." It was a draining experience. If I didn't find my house so quickly, I would've gladly worked with someone else.

I was so thrilled when I found a small mortgage company that was willing to work with my credit score and budget. It was all well and good... until I started questioning the exorbitant charges that were listed in the closing package. As soon as they sensed I was waffling, they fired me as a client. I mean they actually sent me an email stating that they couldn't work with me anymore, passing me onto another mortgage company without a beat--and putting a two-week stall on the process. Ugh.

My hero came in the form of Pieter at Flagstar Bank. Pieter was someone I'd talked to way back in February. I liked him a lot. He seemed to understand what I had to work with, what I wanted to do and why I wanted to do it. Back then, my credit wasn't good to go yet. He walked me through the whole process anyway, checked out my credit and told me where I needed to improve. He couldn't do much for me at that point, but told me to come see him when I reached a 670 credit score. I never did because I never reached that score.

But when I got dumped on my ass, I decided to go for it and call him anyway. I didn't really have a lot to lose. Plus I needed to at least try to salvage the deal I already had in place. I mean, I'd already signed a contract and put $1,000 down on this house. He completely surprised me by saying I was ready, and with a few additional credit tweaks, he'd be able to work with me. Yesssssss.

He worked out an incredibly solid closing package and didn't pressure me in any way. Flagstar is up on all the latest technology, so we did everything on the internet and over the phone. No more dragging myself to some office 30 miles away. More than anything, I trusted him. He was on my side, trying to get me the best deal. I called him constantly, freaking out about one thing or another. He took it all in stride, answering each of my questions with patience. Beyond that, he ended up saving me a fuckton of cash by asking Flagstar to chip in a bunch of money toward my closing costs at the very last minute.

giphy (2).gif

Faith in humanity restored. Contact Pieter at Pieter.Mol@flagstar.com if you're in the Detroit area and need a good mortgage dude. And no, Flagstar did not sponsor this post. I wish!

1. IF YOU THINK YOU'RE NOT READY YET, YOU'RE RIGHT

This is end-all, real-deal lesson I learned during the process of buying my first home: When you're ready, you're ready. Starting the process when you're NOT ready will only cause you heartache. Don't bother getting started unless you're willing to do the work it'll take to get yourself through to the end. 

If I really think about it, it took me almost FOUR YEARS to buy this house. FOUR YEARS of slowly gutting, then rebuilding my credit. FOUR YEARS of doing all the shitty nitty gritty financial repair to get to a place where anyone would even take me seriously.

You have to want it more than most other things. You have to put in the work. It's that simple.

Thank you for following me along the hard road to homeownership. In the future, I may post more about this. I still have plenty of hard-won advice to give when it comes to minutiae, like picking an insurance policy and how to save for your down payment. Please feel free to email 2 Sisters with any questions you may have about homebuying, or share your own personal real estate tale (or nightmare) at 2sisters2houses@gmail.com.

And now, onto the good stuff... decorating my brand new house! Stayed to for all-new 2 Sisters adventures in DIY, thrifting and projects galore. 

See you soon!