In the past year, Kyle and I became first time homeowners and it was GLORIOUS! It was such a great accomplishment for us as we waited patiently to get our finances in order and to save a down payment, but boy oh boy let me tell you something else. Home buying was extremely STRESSFUL! I’ve heard people say “it’s stressful” and that “you sign your life away when you buy a house” with all the paperwork necessary to complete the deal, but
nobody really prepares you for the stressful days, sleepless nights, and overwhelming feelings you have during this roller coaster ride.
And let me tell you, it is a ROLLER COASTER! There were high points and low points. There were several hoops to jump through and just when we thought the
stress was over, another hurdle appeared further into the process. Like I said in the beginning, becoming homeowners was AMAZING, but it was extremely stressful and a huge learning experience for us. Let me tell you about all the things we went through as we purchased our home.
(Don’t have time right now? scroll down to the bottom to get straight to my DO’s and DON’Ts).
Kyle and I lived in Tucson, Arizona for about 10 years while he made a wonderful career in the Air Force. But not knowing if and when we were going to get PCS’d (permanent change of station) AND with the amount of debt we had to pay off, we made the decision to rent for the entire 10 years we were there. We started off in an apartment for four years, but eventually, we outgrew that. Then, we rented a house directly from a private owner for another three years which was lovely since it was a much bigger house with a garage! We thought we’d stay there for a while, but the landlord had other plans. They sadly wanted to sell the house so we had to move again, WHILE I WAS PREGNANT. Praise God we found another house to rent quickly and without a credit score I might add (check out the blog how to live without a credit score), but man I hated moving all the time.
Now you may be thinking,
“Did you like renting since you rented for 10 years?!?”
NO WAY. I didn’t like renting. I would much rather own the house, pay our own mortgage, and paint our own walls whatever color we wanted! BUT renting served its purpose since we could focus on paying off all of our debt and not having to worry about selling a house IF Kyle got orders to move.
“Were you ready to buy a house after 10 years of renting?”
HECK YES. Thankfully during that time, we got on a financial plan that helped us get out of debt, save an emergency fund, and save a hefty down payment for whenever the right time came, which turned out to be July 2018.
But I’m getting ahead of myself here. Our house buying story started April 2018. Kyle got a job offer closer to both our families in a location we wanted to live in AND it allowed us to stay in one spot for a LONG time. So we jumped at this chance and we were ready to buy a home!! The only problem was we didn’t know what the heck we were doing since this was a first experience with it.
I naively thought, “it can’t be that bad right?” HA!
Little did I know how much STRESS we were about to go through with every hoop we had to jump through including:
Finding a house across the country
Putting a formal offer in
Getting through the home inspection
Finalizing a mortgage before the closing date
Find a house…...across the country!
Ok first thing’s first, we needed to start discussions with mortgage lenders to begin getting pre-approved for a mortgage. We also talked to several realtors in the New Hampshire area (we found both categories through Dave Ramsey’s ELP program). Once we chose a realtor we trusted, she sent us a questionnaire and boy oh boy was it intense. I thought I knew what I wanted in a house but this questionnaire took it a huge step further with questions like:
What style floor plan do you want? Traditional? Cozy?
Ummmm, I don’t know, something that functions for a family of three lol?
Do you want Private or Public Utilities?
Yes? :) (as long as it has utilities, I’m happy lol)
What type of foundation do you want?
Um, something solid lol?
The questions went on and on so that she could find the right house for us. It seemed endless but that was just the beginning. Then she flooded our inbox with houses on the market because all she did was set up a filter to automatically send us houses within our criteria. As we looked, we definitely liked some, but I swear the next day they were already pending sale! Apparently, it was a hot market so our realtor just said, “book a flight when you're ready to see houses and we’ll just have to see what’s available that day.” I am such a planner, so that was the worst answer to hear. The immediate thought that crossed my mind was, “what if there’s NOTHING on the market that we like while I’m there and I waste a trip?"
I had to suck it up, and put that fear aside.
I booked a solo flight to New Hampshire and brought a camera. Kyle stayed back for work and to watch Addison, so my plan was to take pictures/videos of all the houses I saw, post them on Google drive, and Kyle could look at them from AZ.
It was was the best we could do since we under such a time crunch. After I booked my flight and informed our realtor what my date of travel was, she told me that one of her team members would be showing the houses to me and if I had any problems let me know.
Hmmmm, OK.
My thought was we chose her for her experience and knowledge but I guess we’ll see how her team member does.
So in two days I saw 13 houses…..YIKES! By the end of the two days, there were two major contenders that Kyle and I considered. Each had their pro’s and con’s where one has was move-in ready, within our price range, but further away from Kyle’s work, while the other house had a better location, better schooling, but it was UGLY and outside of our price range.
But we liked them both so we wanted a second showing for each of them so I could pick one of the two. However, our realtor (the team member she teamed us up with) who shall remain nameless dropped the ball and ruined our chances with the move-in ready home. He never informed the seller’s agent that we were interested in the house and if an offer came in, we would like an opportunity to also put in a bid. I made that clear to our realtor during our first showing, but he forgot to complete this action so the sale was pending at that point. Now I don’t get mad often, but with our limited amount of time to see and buy a house plus the fact that I told him clearly to tell the agent we were interested, I was PISSED! But…as frustrated as I was…..we had to move on.
Thankfully, I did really like this other house as well so we scheduled a time to see it again and that second showing sealed the deal. Kyle and I really fell in love with it and it’s possibilities! It wasn’t without its stresses, but hoop #1 of finding a house…..CHECK.
The formal offer
Now, this house was a good size, good location, great schooling, and everything we needed. On the flip side, it was ugly with green and pink carpeting, wallpaper, golden oak for days, AND it was out of our price range.
The only saving grace was that the house was on the market for over 30 days (probably because it was outdated). So we put in a low offer (one we could afford), not knowing how the seller would take it. Would she reject it? Counter? Accept? This was hoop #2 to jump through where the stress built more than I thought it would. AND I was traveling back to AZ at this point so it was pure craziness! The seller countered and the negotiating began. We went back and forth several times but we settled on a number Kyle and I were happy with. It was our MAX number since we knew we wanted to update the house with some home improvement projects, but as long as there weren’t other issues during the buying process, then we were all set (soooo naive)! PHEWWWW, hoop # 2 completed!
Dun dun dun…..the home Inspection
So we got the formal offer done, and the stress is over right? Well, that's what I thought, but no. Getting the dreaded home inspection done was on our agenda next. The house seemed pretty sound and solid but you just never know what could be uncovered. I’ve seen plenty of “Fixer Upper” shows where they uncover problem after problem so I was praying that wouldn’t happen to us! Oh, and did you know that a home inspection was like $1000? Yikes, I didn’t! We were a little surprised on how much it cost but thankfully we had a savings account for future home improvements that we took from to pay for it but geez, that was another extra cost that we didn’t have a full understanding on!
So on the day of the home inspection, our realtor had to represent us since we were still living in AZ but he gave us a call afterward to tell us the initial results. Apparently, we might have a mouse problem, the circuit breaker box shows corrosion, and there were a few leaks. Hmmm ok. That was tough to hear but none of them were really deal breakers.
However, a few days later we got the water test results back and it came back positive for Radon. It’s not uncommon here in the Granite state but it comes with a cost to mitigate it…..$4,000. UGH. We already offered our max price when we negotiated the formal offer and now this?
So it went to the negotiation table again where we went back and forth starting with a big list, then backed off slowly until it came to the ones we really wanted the seller to take care of. The circuit breaker box corrosion and the Radon system. The seller didn’t budge. Didn’t budge on ANY of our asks so we were stuck. Now we had a big decision to make. Do we back out of the deal and go live in my mom’s basement until we find another house? OR do we suck it up, let her win and pay for those fixes ourselves?
As competitive as I am, I had to put it aside. We prayed a lot within the 48-hour window and our hearts were saying “continue the journey”. We had the money to foot the bill, but it took a little more money away from our future home projects. We bit the bullet, let her win, and accepted the house as is. One thing we did get the previous homeowner to concede on: she included the riding lawn mower and snowblower in the sale of the house. Hoop #3, completed... but BOY it was stressful!
Approved mortgage before the closing date
At this point everything was done but the mortgage, so we were finally in the clear, right? The mortgage should be easy once you get pre-approved right? Well, not really.
First we shopped around a little bit to see if we were getting the
best mortgage interest rate we could on a 15-year fixed loan. The first lender we talked to was an ELP provider from Dave Ramsey’s program offering us 4.50% so we thought they would have the best rate. Thankfully, we shopped around a little bit more because we found a cheaper rate at our local credit union of 4.00%. The only problem was our realtor informed us that this specific credit union had rarely gotten the mortgage paperwork done in time for the closing date. So we’d have to just hope and pray!
Another hurdle we had to get through was if you remember from past blogs, we had no credit score. So the mortgage lender had to complete the mortgage through a manual underwriting process. They looked at our history with past bills, rent payments, and all of our bank accounts we had in order to verify that we WILL pay this loan off. So during their investigation, we just had to wait and see. It was a long waiting game. They would ask us a question here and there, and then we had to wait some more with no end in sight. Our closing date was creeping up on us and all we could do was keep checking in. I kept thinking, geez with everything we’ve been through, all the ups and downs during this home buying process, could this deal STILL fall through because we didn’t make the closing date in time?
Finally, after the back and forth we got word a week before the closing date that we were approved. Talk about cutting it close! Hoop #4 (the final hoop) DONE!
July 2018 = 1st time homeowners!
So that was our home buying experience in a nutshell. We knew home buying would be a stressful process, but I didn’t anticipate this crazy roller coaster ride of emotions. There were many stresses we had to endure at different parts of the process: finding a house, putting in a formal offer, getting through the home inspection, and finalizing the mortgage paperwork for the closing date. Throughout this process, I put together a list of DO’s and DON’Ts that I have personally learned from our experience….so I hope this helps you if you are preparing for this same journey!
DOs
Have extra savings for other expenses
If you can be prepared and have extra savings (other than your down payment), it will lower your stress during the home buying process. This could cover expenses which include closing costs, the home inspection, and future home improvement projects.
How do plan for these types of savings/expenses? Check it out here!
Find a GOOD experienced realtor
It is worth it to find a realtor that has a ton of experience who can help you during the home buying process (especially if this is your first time). But be careful of team-based realtors. We originally spoke to the head realtor thinking she would be ours for our journey. She was well spoken, definitely knew what she was talking about, and sold us on her services. But then we got stuck with one of her team members who was useless. Thankfully, my mom used to be a realtor and helped me along the way with her knowledge and negotiation skills. If I only had the team member as a realtor, I would have been screwed. Let’s just say his boss and my mom saved him several times to help complete the deal.
Have a good down payment
We had a great down payment going into the home buying process of more than 20% because we wanted to avoid paying PMI (private mortgage insurance). So I highly recommend taking the time to save for that. Also it gave us a good head start on paying off our 15-year fixed mortgage.
Shop around for the best mortgage rate
As I stated earlier, we started with an ELP from Ramsey’s Solutions but thankfully we shopped around because we got a cheaper rate with a local credit union. So take the time and shop around! It can save you thousands of dollars!
Look for a house that’s been on the market for a while!
Don’t just look at the asking price of a house to make your decision on if you should go see it or not. It might be over your price range but if it’s been on the market for 30+ days there is a window of opportunity! For us, I believe the house was a little overpriced BUT it was very outdated which probably drove the buying community elsewhere. We looked past it, asked for a lower price, and got it because the seller needed to sell as she bought another house already! So pay attention to how long the house has been on the market.
DON'Ts
Buy too much house.
You should buy a house that’s no more than 25% of your monthly take home pay. The issue we ran into was we didn’t know exactly what Kyle’s new take home pay would be since he didn’t start his job yet, so we estimated that. It is a little bit higher than 25% but thankfully it’s doable.
Determine your house budget off your pre-qualified mortgage
So we were pre-qualified for a $500,000 house. WTF! How did they get that number? There was no way in HECK we could afford that, even if it was a 30 year fixed mortgage! Don’t rely on the banks to give you a realistic number unless you want to struggle buying groceries while living in a mansion.
Just rely on the realtor to find you a house
Our realtor set up a filter that sent us a ton of houses. But it was hit or miss on if we actually liked the houses or not. My advice is to make sure you also look at houses using your realtor’s website as well as Zillow and Trulia because YOU know what you want best! So why solo rely on someone else to find your perfect home! I ended up finding most of the houses we toured just by sending them to my realtor and asking him to set up showings.
Look past aesthetics
If you can look past the seller’s outdated and ugly decor, if you can look past the clutter, and see a house with a good bones that just needs some updating you may be able to get a great deal on a house! A lot of people scan houses online and through pictures which means they bypass the ugly ones. So here’s the truth:
Move-in ready homes in a hot market = multiple and competing offers
Ugly/outdated houses in a hot market = sit 30+ days on the market desperate for an offer!
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