So you’re a first time home buyer.
This is going to be one of the most exciting moments of your life – sans getting married and having a baby.
This can also be a very tricky, turbulent time where you wonder if you got off the wrong exit.
We’ve done this a few times, so read on for some of our best advice.
Our First Time Home Buyer Experience
We’ve purchased 3 homes in our marriage of 8 years. Each one was even a bit more exciting than the next.
However there is nothing quite like getting the keys and signing your name (a billion and 1 times) for your first home.
Our first home was a lovely old two-family in a bustling Port Town in Western New York. (You can read more about whether a two-family is a good idea for your family here.)
There were so many pitfalls, ups and downs during the process. It literally is like riding a roller-coaster. (I can say this for a fact now, after having gone on my first roller-coaster last year.)
There’s exhilarating parts, jerky parts where you feel like you might just come apart, terrifying parts and finally, at the end, the ‘huge sigh of relief that it’s over’ part.
Wait, was that just me? 😉
Common First Time Home Buyer Mistakes
So.
Many.
First time home buyers commit these mistakes.
We had a good, old-time realtor for our first (AND second) house, so she helped us through each one of these pretty quickly.
Don’t Lowball
One of the first things our landlord/realtor told us is don’t lowball a seller. They will be insulted and refuse your offer instead of countering.
If you’re not sure what a good price to go in at is, talk to your trusted realtor who can check comps in the area and give you a professional opinion.
Just understand, your realtor and the seller’s realtor are most likely going to come back with low and high numbers – as your realtor wants a sale with you and the seller’s realtor wants to get as much commission as possible from his clients.
Our Lowball Experience
We have first hand experience with lowballers. Trying to sell Fixer #2 in the winter made it more of a buyer’s market than the seller’s market it was in the summer/fall of 18′. Still, we had a lot of showings, repeat interest and 3 offers within the first 2 months.
However, our first two offers were 18 & 17 THOUSAND under asking.
You better believe we were insulted.
The house was brand new from top to bottom, completely updated with mid to high end lighting, fixtures, paint, carpet, luxury vinyl flooring, a new high-end kitchen with stainless steel appliances, soft close drawers and doors on hard wood antique white cabinets. It had a gorgeous walk-in pantry with custom door and 2 brand new full baths, one with a custom tiled walk-in shower. It had a solid roof, furnace and new hot water tank.
There wasn’t a thing wrong with it.
We priced it competitively using comps in our area.
The first offer we tried to, begrudgingly, work with, countering them higher until we were at the lowest we would go. (Here’s a first time home sellers tip: same for a landlord trying to rent an apartment, NEVER GO INTO SELLING YOUR HOME FEELING DESPERATE.)
After the inspection, they came back with a list of ridiculous things they wanted done. By “licensed professionals”. And 2k MORE off the price.
First off, my husband had the entire house, sans the living room, down to the studs. Every part of it, he rebuilt. Electrical, plumbing, insulation, drywall, etc., etc. If they couldn’t trust him to put a GFCI outlet in, they really shouldn’t be living in a house he rebuilt.
Secondly, 2 thousand more, for what? Every tiny issue found, they wanted paid for and fixed by “professionals”.
This is when a seller will slam the door in your face after telling you to run up an alley and holler fish.
That’s what we did, and we moved on to another buyer who adored the house and made sure that it was clear to us in numerous ways.
Don’t Look Outside Your Budget
There are thousands upon thousands of dream home pictures online. Stay there and dream before you go scheduling showings with homes outside what you’re willing (or able) to pay.
1 – it’s hard to see things you want and can’t have (yet)
2 – it’s tempting to try to go higher and could potentially get you in a home you love but can’t afford
3 – it’s super rude to the seller to have to have their home show-ready if you’re not even a serious buyer
Now, if it’s an open house or model home, feel free to browse, get ideas and see if the home is within reach.
If not, in the famous (or infamous, depending on if you’re a parent who’s heard them 3 billion times) words of Elsa, let it go.
Don’t Expect Perfection
If you’re uber-rich and can spend whatever you want on whatever you want, skip right past this part. I’m going to assume you aren’t here reading this anyway. 😉
So, you’re an average American first time home buyer like the rest of us? That might mean you need to consider a fixer, or at least an older home with some DIY projects.
If you go into it expecting to get everything you’ve ever dreamed of, you’re likely going to have some heartache.
Our first house had:
- no dishwasher (*gasp*)
- a glass cook-top stove (serious downgrade from my mother-in-law’s gas range)
- a tiny kitchen with ooooold, stinky cabinets
- closed off rooms
- tiny master bedroom with bath on different level
- carpet in the dining room
- a cute bathroom with a claw foot tub – that you had to straddle to use the toilet
- laundry in the basement – 2 to 3 floors away
- a mean neighbor who liked to call the cops on anyone for anything (like parking on the side of the road near her house even though she removed the no parking sign)
Our second house had:
- a horrible funky smell
- TWO LAYERS of carpet in the dining room
- a disgusting tiny bath
- a crappy DIY kitchen that couldn’t fit both a fridge and stove
- no appliances, let alone a dishwasher
- absolutely no storage
- no real closets to speak of
- no attic
- a 4.5 foot tall basement
- bugs (stink, box elder, carpenter ants, tiny ants, bees)
- 4 different levels of flooring – on the same floor
And that’s only scraping the tip of the iceberg with that house.
After much hard work, and lots of time, sweat and tears, we turned each into beautiful, high-end houses worth MUCH more than we paid for them.
You have to think: It’s not what it is when you get it. It’s what you can do to it after you have it.
Don’t Settle for One Bank
Always shop around for a mortgage.
Banks and Credit Unions look at things differently. You might get a better rate at one place, but at another, their closing costs are substantially less. Weigh what is most important to you.
With us, for our last two houses, closing costs were most important as we were planning on refinancing after the first year anyway.
Buying fixers and not hiring a contractor meant we were putting renovation costs on credit cards. Refinancing made it possible for us to roll those costs into one payment, using some of the equity we added with the extensive renovations.
Don’t automatically settle for one institution because you’ve used them in the past, or someone recommended them.
First Time Home Buying Conclusion
Being a first time home buyer can be stressful. Exciting. Terrifying. Exhilarating. There’s a lot to it.
- Above all else, just be smart.
- Make calculated, intentional, wise financial decisions. If you need more in depth financial mistakes to avoid head on over here.
- Bring an older adult with you to viewings, one who has a history of smart home buying and financial decisions.
- Don’t be hasty, but don’t drag your feet and expect a seller to wait on you.
- Pay for the inspection, or bring someone who understands the intricate workings of a house with you.
Do all those things and you’ll end up with a home you love. Even if it’s only for a few years till you’re ready for house (or fixer!) number two. 😉
