7 Things I Wish I Knew Before Buying My First Home
By Mary Beth Storjohann
Buying a home is not for the faint of heart. I’ve heard horror stories of deals gone wrong, never-ending piles of paperwork and, even worse, lost money. As a financial planner, I felt prepared going into our first home purchase. However, our experience, coupled with what I’ve seen clients go through, helped me create this list of seven things I wish I (and everyone) knew before buying a first home:
1. Don’t fall in love with a house
It’s easy to walk into a home and start imagining what your bedroom will look like and how much you’ll enjoy Sunday morning cups of coffee on the porch. However, instead of using your heart, it’s imperative that you use your head and ask how the numbers add up. How is the home priced and how does it compare to the surrounding areas? Is it over- or undervalued? What will the upkeep, taxes and mortgage be? Use your head, stick to your budget, and don’t be afraid to walk away from a bad deal.
2. Work with an agent who knows what they’re doing (and meets your needs)
Who you choose to represent you in your home-buying process will have a direct effect on the level of stress you experience. Ensure that your agent isn’t new to the game (and if they are, that they have an experienced team backing them), that you’re comfortable with their communication style, and interview, interview, interview. You’re about to enter into a transaction with what could be hundreds of thousands of dollars on the line. Make sure you take the time to find the right fit for you.
3. Factor in ALL the increased costs
Owning a home can seem luxurious, but in reality it comes with additional expenses and responsibility. Review your current spending plan and make adjustments for new expenses such as property taxes, homeowners insurance, homeowners association (HOA) dues, yard maintenance, increased utilities, home upkeep, and so on. In addition, if you’re not the kind of person to fix a clogged toilet or broken sprinkler on your own, ensure you’re factoring contractor work into your budget as well.
4. The more you rush the process, the more stressed you’ll be
As a generation that is used to getting what we want on demand, going through a months-long real estate transaction can feel dreadful. However, the reality is that you’re buying a structure to live in. The piles of paperwork, examiners, inspections and more are put in place to protect you—not to make you anxious. Know that while you do have the option for expedited escrows, overnight wires and timing of simultaneous close dates, going down those roads may raise your blood pressure.
5. Get comfortable with asking questions (and filling out paperwork)
If you’re not comfortable admitting what you don’t know, there’s no better time to start getting comfortable than during your first home purchase. Ensure that you understand all the documents you’re signing, all revisions made to agreements, and ask questions of your agent, your lender, the neighbors near the home you’re purchasing, the HOA of the community you’re moving into, and more.
6. Speaking of neighbors, talk to them
There’s no better way to learn about your potential new neighborhood than by talking to the neighbors—to learn about the community, the school districts, how safe they feel and whether or not it’s an area that meets your lifestyle needs. You may love the home, but if you won’t feel comfortable in your new community, is it really worth it?
7. Cosmetic changes are easy to make; structural changes are not
Don’t be put off by peeling paint or ugly carpet. Cosmetic changes are easy and relatively affordable to make. However, if you’re looking at a home and see the need for a bigger bathroom or kitchen, or an extra bedroom, determine if it makes financial and emotional sense to invest in a structural change or if you should simply find a home that better suits your needs.
Buying a home is an adventure in itself and one that can be enjoyable. Be sure to take your time, review the details and ask as many questions as needed until you feel comfortable with the decisions being made.