Hey lovelies! I am so excited to catch you up on this seemingly never ending home search process. I FINALLY BOUGHT A HOUSE!!! YAY! I am so happy this is done and I realized more than ever that there are a lot of things that no one tells you about the process like qualifying for a mortgage, what is it like to work with a realtor, what is the approval process like, when do you actually get to close the deal and what happens after you do. So being a good girlfriend, I am here to give you the details so you can be ready when you buy your home. The process is pretty all over the place. I am only going to be sharing details for the US. It may be different where you live (if so share the differences in the comments please).
- Money – People always want to know how much money it costs, right? And who can blame them? Shoot, I did this on a whim so I learned on the fly. I don’t want the truth to sneak up on you, so here is the most important tip I can give you…. save your money. You will need a couple of thousand to get things going (I will give a breakdown in a second). Some people may not buy thinking they need $20,000 to buy a house but that is not necessarily the entire truth. You can start the process with a couple thousand if you are not planning on making a large down payment. At the end of the entire process you will need about 5k to 10,000 to give as a down payment if your loan is less than 250,000. All this will depend on the type of loan you are getting (Conventional or FHA). If the house you are buying is more expensive you will need more money.
- So…What is all that money for? Earnest Money (money you give to show you are serious about buying a house), appraisal fees, inspection costs, down payment money and a little for unexpected expenses (contracts are on and then off, don’t get stuck because you have no wiggle room in your bank account). Then after you close, you will have things to buy from appliances to shelving, fencing to EVERYTHING EVER all when you probably will have the least amount of money that you will have ever had. So…Save your money…or if you are lucky to have parents that can gift you some money (which I am not) keep as much as possible for the time after you close.
- Loan – To buy a house you need to get pre-qualified for a loan, unless you have the money upfront. Depending on your credit you will be approved or you may just be told what you need to do to fix your credit to qualify (lemme know in the comments if a post about repairing your credit would be helpful, trust me I have been there). After you qualify take time to apply with other lenders (Do your research before applying: They can tell you about different things they offer, like closing cost credits or a better interest rate before you apply). Check with your job, they may offer some benefits for this too. You don’t want to go with one lender thinking you might not qualify anywhere else. Its kinda like going with the first wedding gown you try on. That first one is just the beginning.
- The home search – You qualified, your lender should be able to tell you that you qualify to spend x amount. That amount should give you an idea of WHAT you can qualify for and WHERE you can afford to live. Keep in mind that just because you can afford it doesn’t mean you want to buy at the top of your budget. Houses come with all kinds of costs on top of your payment and remember each and everything that happens in that house is your responsibility so give yourself some room to care for your house AND live your life. Shoot! Beyoncé goes on tour every couple years and snatches our coin faithfully! You wanna go get your life too! No IG and YouTube clip concerts for you!
- To Realtor or not to Realtor – Now you can get a realtor or not get one. Each has a benefit. If you get one, there is someone to help advise you on properties, areas and negotiating. If you don’t get one, you can do that footwork yourself and work directly with your seller who will have to pay less money in fees and may be more flexible on pricing. I grew up watching realtors on tv and of course its not like that. I thought they suggested houses to look and drove you to look at them after you first meet and they were all great negotiators. Not necessarily, every house I saw, I found using my realtor’s MLS listings site or on Zillow. My realtor was good, but did not seem to be an aggressive negotiator. That does not mean he wasn’t, it just didn’t come across that way to me.
- Expectations on houses vary – You might think houses come like I did, with appliances, and green grass and close to perfect condition. Depending on the money you are spending, the house may come with none of those things. So keep this in mind if you go in a house with a broken stove, janky cabinets, or a messed up floor in one room. Some people don’t mind fixing a home after they close, so you might lose a house asking for too much if you are living in a seller’s market (It’s a seller’s market if there is low inventory of houses. It’s a buyer’s market when there are a large amount of options to buy). Keep in mind, the seller wants to get as much money out of the sale of their house as possible, so the more you need the less attractive your offer is. If you need the seller to pay closing costs and it is a Seller’s market, they may pass if there are more offers without this need.
- You found a house – Try not to be too excited about a house when you put an offer on it. This “offer” is a contract saying you will pay x amount for a house. The seller will get many of these and they might accept yours or they may not. They may try to get you in a bidding war with someone who is offering more. The process is up and down. You can be under contract for a house one day and out of contract the next day. It’s hard not to be emotionally attached to a house you really like, but I promise you, once you experience the up and down of the buying process you will learn not to plan too much until you are a bit further in the process. But hey don’t get discouraged, this is just part of the game. The part NO ONE tells you.
- You are under contract, now what – You have time to decide if this house is really the one you want. Its kinda like you go out on dates with the house. You have someone come check it out to see if the house is in good shape during an inspection. Then if you want that house after hearing each and everything thing that is wrong with it (as far as the inspector knows), then you negotiate to have those things fixed. While this is happening, you have to have it appraised to see if it is worth what you offered. Just like buying a car, the mortgage lender will only give you what the house is actually worth. It doesn’t matter what you signed papers for. If you are in a very competitive market, sometimes people come with cash offers so just be patient. If the seller won’t come down on the price you may have to keep searching. This is why we don’t get too excited about houses. Its not final until its final. So when the heck is it final?
Closing on my first home
- When You close!!! – LOL Now when is that? After you have give your lender everything but your right foot in paperwork and proof of money and called credit card companies to confirm you pay on time. They call this process underwriting and after you get through that process, and your appraisal is accepted (you might be lucky enough to only have to pay for one, I had to pay for 2). THEN you get the “clear to close” and you can now go sign papers to buy your new home! YAY! Closing is actually pretty cool, lots of papers (like a lot) and you sit there and sign and sign and then, you go claim what’s yours! Your new casa!!! YAY – Now what…
- Your new address will be 123 Home Depot Way – You will spend more time and more money in the first couple weeks at Home Depot because you will be buying things no matter the condition of your house. You are either buying washers, locks, batteries for smoke detectors, or hoses to connect things. It is just what is gonna happen, accept this eventuality cuz its pretty annoying.
- Because we are besties, I have one more pointer for you…What happens if things are falling apart – You got in your house and things are not going as smoothly as you thought. If you are a single lady like me, you might be facing this alone. Things are breaking and you are just overwhelmed with moving. That is ok! Take as much time as you can to get your mind together. You might tell friends what’s happening and they say, “your inspector didn’t catch that?” Well obvs not super cool friend! Inspectors don’t catch everything. Something that might be a small help is a home warranty as they will support repairs on things your house already has to a certain extent. If it is something that needs to be added to your house, you will have to pay for that yourself. This goes back to what I was saying about money earlier. I learned that the majority of what I needed money for was AFTER I closed. I spent thousands after I closed on unexpected repairs, and appliances etc.
Welp, I shared quite a bit with you and at this point your head might be spinning, so let me share this final thought with you boo: take your time and decide on what is best for you, not just now but a year or two from now. That is what is most crucial for you! If buying a house is not best don’t do it. If it is, go on into the buying process. Be prepared for it all buy learning from these secrets, that I WISH someone shared with me.
xo Danie
Wow!! Firstly, congratulations!!! What an exciting new step – can’t wait to see and hear more about how you get on with your new place! Great tips for the buying process! Charlie xo
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Thanks for checking out the post!
We got a realtor, it took all the pressure away from looking what was best for us and I think he did pretty well as I’m absolutely loving our apartment! These are lovely things that you’ve learned & valuable too 🙂 Congrats on your new home 🙂
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Thanks Jasmin!!! Congratulations on your new place lovely lady!!!
Thank you, this was a super informative post! I’m planning on buying a house in the near future (hopefully sooner rather than later ;)) and had no idea I didn’t need to work with a realtor. Also, I almost spit out my coffee when I read “Your new address will be 123 Home Depot Way” – lol!
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Yeah I didn’t know but I learned that the price of the house usually factors in the 3 percent that go to the realtors (yours and the sellers realtor) so if you don’t have one sometimes you can say hey I’m repping myself let’s lower this cost by 1.5%. The only thing is you need to make sure your documentation is up to par and you understand the real estate rules in your area. A realtor has a lot of knowledge but you can do your research and do it on your own too. Thanks so much for reading my post it means so much to me. I’m off to my new “fave” place! I wonder if they would just give me a Home Depot apron? I’m there so much!
Thank you for this post! I was glued to the screen as we’re hoping to buy a house in the next year or so. A few of our friends have recently bought and we’ve definitely gotten a glimpse at the post-buying phase where they’re slammed with unexpected projects. (So daunting!) But no one really shared their views of the earlier stages with us. So helpful!!
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That’s great new Beth! I really was shocked at how much I learned that I never heard anyone discuss. The projects at the end are daunting, but I learned that each step and phase is daunting but so is owning a house. I have learned a lot and I think this will be a good investment in the end. Keep me posted on your home search adventures!
OMG, I am currently in the process of buying a house! Thanks for the tips!
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Awesome best wishes on your purchase. If there are any questions I can answer I am here for you. Thanks for checking out the post!
xo, Danie
A massive congrats to you on your house!! Such a big step. We really want to move to a bigger place but the process is so stressful. Thanks for you tips!
http://www.chausadventure.com
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Thanks so much! Thanks for checking out the post!
I’ve supported friends and family through the process and I STILL didn’t know some of these things. This was insightful and very helpful.
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That’s great news. i want to be able to help others. If you know of anyone buying feel free to share the link. thanks so much for reading the post! It means a lot.
great ideas for first time home buyers! Thanks for sharing 🙂
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Thanks Brittany! I appreciate you taking the time to check out the post ❤️
Thanks for the tips, we are hoping to buy our first home in the next year!
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Best wishes on your search Joleen. I hope this post can be of help for you guys
Congratulations on buying your first new home! These are great tips for people planning on buying their first home, everyone from singles to couples wanting to start a family. Houses are really expensive, and I agree with you that the only way for most people to be able to afford one is to save up for a long time.
Buying or leasing a home should be a taught in school because when we are old enough to buy one you might not know what you have to do. Really great tips.
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Man! You are sooo right! It really should along with Credit management because some parents don’t even really know how it works. I love that suggestion.
well done on buying your first home – I hope you have years of happiness there. Very wise advice here too – the system is a bit different in the UK – but writing big cheques often is still true. Love Bec
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Is there an easier qualifying process in the UK? I would love that to be the case here.
it’s complicated in UK – system for buying/selling is different in scotland (basically once seller accepts an offer it’s legally binding).
we don’t do alot of sealed bids/auctions compared to offers to seller.
it’s complicated by how much deposit people can put towards cost of property – need 10/15%+ but property very expensive in most parts of uk – mortgage rates v v low at mo 1.5% but often fixed term mortgages.
then there’s shared ownership with housing associations too.
love Bec 🙂
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That is really different! I’m interested in those things. Here you don’t just pay whatever your payment is. You may pay that plus payment insurance and tax. It gets so convoluted.
If you want to know more about uk mortgage systems look up Martin Lewis money supermarket. He’s a journalist with a huge website which saves ppl money.
I love all the details you went through! It might be more or less different in my country but some points remain the basis.
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Thanks doll. what country are you in?
India
Yes, yes yes! I bought my first house last year and I wish someone had told me all the complexities and hurdles I had to go through! I learned as I go and that was a total bummer! This is a great list for anyone thinking of buying their first home.
Katja xxx
http://www.katnapped.com
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I’m so glad to get a co-sign from another new buyer. It’s a lot right?! I’m glad you liked the post!
congratulations on getting your new house. thanks for an insight as these are all great information which i would also remember when i decide to take that step. i also am of the opinion that the best way to cover the cost is to save up for it.
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I agree with you and I am hoping that the breakdown of costs will help anyone thinking about doing this. It is just easier for you to have the money and plan for it to be all gone. Even if you save 20k a house can swallow it up.
Wow this was so informative, and further illustrates why I will wait until I’m really ready before I buy a house. I really want to have as much in order as I can! Thank you so much for these tips!
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Thanks so much for checking out the post and best wishes on your future home search.
These are super awesome tips. Especially since I am in the market to buy my first home it’s a real no-nonsense breakdown of what to expect.
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Thanks doll. I’m glad it can be of some help. 🙂
This is such a great read for a first time buyer! I remember how confused I was by it all! This post would have really helped me!
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I really appreciate it, I hope it will help anyone thinking of going down this road.
This was such an insightful post about buying property! I live in the UK so I can imagine the process isn’t 100% the same, but I had no idea how much time it took from seeing the place to actually having it for yourself! Thanks for the insight!
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Thanks Mili I appreciate you checking the post out!
Congratulations on this major milestone…. such a big one…. This is such an in-depth post.. no one truly mentions all that’s involved
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Thanks so much doll I appreciate it. I swore I had read enough so I was shocked when I realized I knew so little. I am hoping it can help people looking to buy.