Buying your first house is such an exciting time. We tend to connect houses with dreams. First, we get the house, then the dog, then the kids all the way to the dream of paying the mortgage off. Buying a house is also a huge financial consideration that can leave people struggling if not handled properly. I know I made a million mistakes when purchasing my first house but these are the top 5 things I wish I had known before buying my first house.
5. Wait Until You Have a More Flexible Mortgage Range
When my husband and I started house hunting we had been married for about two months. I had just started a new job where I worked as a per diem employee. Since I had just started the mortgage company could not include my income in the loan which means we were only approved based on my husband’s income.
This left us with a loan approval of 120,000 which did not give us a lot of options in our area. We found one area with a good selection of houses in that price range but it left us mostly competing with investors and house-flippers.
We lost 5-10 house bids due to a cash buyer making an offer after us. The lower the price bracket, the more cash buyers will be in that market. This also led us to look at and put offers on more houses and spending more money on inspections. By the time we settled on our first home we spent $3500 on inspections.
If I had waited for an extra six months, we could have expanded our looking price and not wasted so much time and money on inspections.
4. Purchase Your Own Inspection
Due to our extended house looking process and the large sum spent on inspections one thing that was pointed out by our realtor is that if a seller has purchased an inspection, you can use it and not buy your own. Do not do that.
I was tired of spending money on houses that did not end up being mine, so I used the sellers. Now, something to know about inspections, they are very complicated and unless you have a vast knowledge of plumbing, roofing, flooring, and pretty much anything that goes into making a house you will probably not understand what you are reading. I know I didn’t!
When you purchase an inspection, an inspector goes through the whole document with you and shows you the problem areas of the house and explains the severity of the situation. When we moved in there was no hot water for three weeks due to a gas pipe severed underneath the house. Our house was uninsurable until we cut down part of a tree, fixed part of the roof, and replaced some windows. We had to spend $3500 as soon as we got the keys just to make it insurable and then put many more thousands of dollars into the house in the next few years.
3. How Expensive Home Repairs Can Be
The first house we purchased was nice but would not be considered a dream home. I had plans for remodeling the master bath, getting new windows, new doors, just making it exactly how I wanted it to be. What I did not know was the realistic amount of time and money those things require.
Just a short list of repairs and upgrades we made:
-Rewiring the house $7000
-Cutting down a tree $2500
-Bathroom remodel $3500
-Tearing down a brick planter $500
-New front door $800
-New roof $4000
-Beam repair $1500
We did all of this and more to our first house. In two years we put about $40,000 into repairs. House upgrades can be really fun but be aware of the costs before going into a house with the dream of fixing it up and be sure your budget can handle the task.
4. Always Be Willing To Walk Away
We were three days from closing and I was so happy to finally be getting into a house. Then I got the phone call from my realtor.
“Hi, there! Small problem, there was a clerical error on the house several years back so your back yard technically is a separate lot that is not for sale with the house.”
“So you’re saying I will not own part of my backyard?”
“Yeah, pretty much.”
I should have walked away at that point. That moment was the universe telling me that this house was going to be more of a problem then a dream but alas, I did not listen. I felt so worn down on house buying that the idea of going back to the drawing board sounded like torture so we bought the house anyway. How expensive could it be to figure that out? Well, a lawyer told me that it would be about $8,000 expensive.
Based on that when we sold the house we sold it to an investor and lost most of the money we had put into it. We were our of the resources needed to take that issue on.
1. Be Patient
Which leads me to my top and most important thing that I wish I knew before buying my first house, being patient. Most of the issues that we had with our first house was a result of being impatient on my part. If we had waited to have a larger income, then we would not have had so much competition. Less competition would have let us be a little pickier about what we wanted to fix up or not and that would have saved us a lot of money in the long run.
Buying a house is the longest commitment you will make aside from marriage. A mortgage is 30 years most people only raise children for about 20 years. If house buying is getting too stressful, take a break. If you feel yourself rushing, slow down. There is always another house, there will always be another time. Go in with the mindset that nothing has to happen right now today.
We all have many options as long as we allow ourselves to look at them.