Thoughts On Buying My First Home
I just purchased my first home and have some thoughts on the process both for people who are thinking of buying and to remind me of some of the less obvious things I need to know next time around.
Financing:
- Before you shop for a house, get qualified for your loan. No one treats you seriously until they know for sure that you will have money to complete a transaction.
- Mortgage companies don’t call people back. There are many reasons that a mortgage company might not be interested in your loan. They might not be licensed in your state, might not do first time buyers, or whatever. Bottom line, however, is that if they don’t want your mortgage they won’t be polite enough to call and tell you so. Maybe people whine a lot or something, I don’t know, but if you don’t hear back within one business day you should call someone else. Mortgage companies make a lot of money off your loan. When they do want your business, expect them to call over and over again.
- Get some extra phone lines and email addresses to hand out to people. As a new home owner, you are marketing gold and will want to turn off phone lines and email addresses when they get bogged with crap. Likewise, get ready for a lot of credit offers. Vendors were calling me within 24 hours of closing to sell me alarms and all sorts of other stuff.
- Remember the old saying that “banks only give money to people who don’t need it.” Oh, and also, “extraordinary claims require extraordinary proof.” Expect to kill some trees in the process.
Home Shopping:
- You’ll need an agent. Your mortgage approval will only be good for so many days and shopping for a home on your own will suck up an inordinate amount of time. Your agent will spend nearly as much time doing background work for you as they spend home shopping with you. You’ll have a ton of questions, and it’s nice to have someone who can answer about half of them. Also, most homes on the market have the little key boxes for people to check them out. Agents have access to those. Agents will also save you a lot of time by checking out listings in advance. A lot of listings are already sold, even though they are still listed. Sometimes sellers take homes off the market, but they stay on the MLS sites. Sometimes there are issues with homes that your agent can tell you about. For example, “I looked at that home two weeks ago with another client. It was a rental and the people renting it wrecked it. It needs $40,000 in renovation and has mold. Do you still want to see it?” Finally, the prices homes actually sell for are substantially lower than the amounts people ask for. Your agent can pull MLS records for the area and find out what homes really sell for and use that as a tool to lower the price. Saving 10% on a home is like getting a car for free.
- If you want DSL, find out where it is available in advance of your search. I wasted two weeks of my time and my agent’s time looking in an area that had no service. I would never have guessed that the nearest CO switch was so far away or that homes in such a nice area would not have DSL service. I know it is very hard to find out where the COs are located, etc., but the hours you spend digging this information up will save you a lot more time later.
- Rent an airplane and fly over your area, preferably during rush hour. Not only is it kind of fun, but you will learn a lot. Expect it to run $200-250. If you happen to be a pilot, hire someone else to be pilot-in-command for this flight. You want to get down to 1,000 feet AGL and gawk, so let someone else be in charge of paying attention.
- The best homes sell in just a few days. Homes that stay listed on MLS, therefore, are not necessarily as good. A good agent watches the new listings every day and will call you. Be prepared to look every day and to put in an offer quickly. Sometimes agents know about homes that are not even listed yet.
