Tuesday, July 2, 2013

Home is Wherever I'm With You

In the many stages of buying a home, we're in the home stretch.

A quick breakdown of what we've been through so far.

1. Decide to buy a home.

This might not seem like such a big deal. Of COURSE you want to buy a home! Who doesn't? Buying your own home and property allows you to customize your space, have room to grow, and put your money into an investment that will (hopefully) pay off in the end. Being financially capable of owning a home is another story. Evaluating your own finances or sitting down with your significant other and talking through how your money is spent, budgeted, and saved will really help you figure out if it's the right time to own a home for you and your lifestyle.

2. Internet research

Scott and I scoured the internet for homes in our area that were what we were looking for. We always knew that a 3 bed/ 2 bath was a must, but knew less on the side of square footage and what part of town to move to. By using sites such as Zillow and Trulia, we were able to find a good reference for what price ranges sat where on the map, and how that affected us. When we needed specifics, LBar was a wonderful site for finding specific homes with up-to-date listings in the Lexington, KY area specifically. Because it is local, it gave us links to send our real estate agent so we could walk through and look at homes.

3. Finding a real estate agent

As first time home buyers, we would 100% recommend having an agent represent you. We ended up using a pretty awesome lady named Mary who really knows her stuff. She has made us feel really comfortable throughout the process and has always been there to answer questions and bring up issues that we may not have thought of ourselves. She also shares our sense of humor, which has made the search even more painless.

It's true. She's pretty awesome.

4. Go to open houses (Even if that house doesn't fit your criteria)

Open houses are actually pretty awesome. They allow you to get used to walking through someone else's home, they familiarize you with the different areas of the city you want to live in (just by driving around), and they really give you a sense of the things that you may want to build or purchase for your own home someday. Oh, and did I mention they're FREE? Always a good thing.

Even if a house has one bedroom, or is waaaay out of your price range, or is in a part of town you're not as interested in, talking through what you like and dislike about those homes will also help you open a line of communication between yourself and your partner. Six months ago, Scott and I didn't have conversations about french drains and the storage difference between pedestal and cabinet sinks, but now that we do, we understand each others ideas much easier. This also helped when we were walking through specific houses with Mary. I understood that Scott wanted an en suite master bedroom, and he knew that I really loved open concept floor plans.

5. Talk to a loan officer and get preapproved

Or, honestly, research where you should personally be financed from. This includes finding out your credit score, seeing if there is any way to improve it, and talking to multiple lenders about what kinds of deals they can do for you. During this part of the process, it's also important to pay attention to what the market is doing so you can get the best rates. Mary recommended someone to us that sat down with us and laid everything on the line. He used charts and graphs to give specific examples of the highs and lows of the market and how it will affect us. Afterwards, he talked us through the multiple types of loans that are available to us for both A) Our budget and B) Our area. He then used our credit scores and some other information to work on our preapproval. Overall, it ended up being a lot less of a pain that we had initially anticipated, but getting pre-approved will make the ENTIRE process more painless in the long run.

6. Find your home

After you are preapproved, you'll know what your price range is, how much your payments might be, and most of all, you'll have the piece of mind to really delve into the home search part of the process. Be in touch with your agent about homes that interest you so you can look at them as soon as your schedule allows. Much like a Restore or good thrift shop, the city you're purchasing in might not always have the same products (homes) for sale. A home you see one day may have an offer put on it the next, so don't hesitate if you see one that is your perfect dream home. On the other hand, don't jump to put in an offer on a home because it has four walls and a roof, either. You don't want buyers remorse!

7. Put in your offer

This is the fun part. You've found the home you love! Now it's just time for all the negotiations. This is another area that having an experienced real estate agent really comes in handy. They can guide you to an offer that might be lower than the asking price, but is still respectable enough to the seller to make it worth their while. The offer might be based on merely cosmetic things (kitchen is out of date, house color is a little....bright, rooms are purple), but isn't really based on any fixes that need to be made to the home. That comes later. An offer might also be accompanied by a "good faith" deposit. In our case, this $500 (per offer, per home, depending on how the process goes), is placed in escrow and during the closing, is put toward the down payment of the home. It is a show to the seller that this is a serious offer and that you plan on following up and working with them in the future over the purchase of the home

Also, quick note. Remember, the seller is trying to get rid of the property, but that also means that they themselves have just purchased a house and are going through both the buying and selling process at the same time. If you have a seller that will work with you, don't take advantage of that! A good relationship with the seller will help the purchase go smoothly, if possible.

8. Get an inspection

This is crucial. Some people don't get a good inspector and have major issues down the road with everything from plumbing to roofing. Our inspector had been used before by two couples we know well, so we felt pretty comfortable with using him ourselves. He took 3 hours to go through the home, literally top to bottom, and collect reference images to later explain any issues the home may have with us. He gave us some specific warnings that are covered here, accompanied by images such as this.

(Not our roof, but looks just like it!)

See where you can see the black through the gray texture on the shingles? This is what our roof looks like right now. There are no leaks yet, but it's definitely the weakest part of our home and needs to be replaced in the next year to three years (if we want to try our luck).

Inspectors will cost anywhere from $150-$400, but will save you money in the end. Repairs that can be done early on your own terms will inevitably be easier to fix than issues that fester. This goes for the pest inspector, too. Not catching termites early will literally eat away your investment.

9. Getting approved

Talking to your loan officer again will allow them to fill in the blanks for the property you wish to purchase. They will be able to pull together the tax codes, down payment information, and closing costs from the area and address that you give them. They may also ask you to sign a billion pieces of paper that essentially state that you have read and signed the 999,999,999 before it. This is normal.

Afterwards, you can discuss which loan is right for you and what financial information you may need to send your loan officer in the near future to finish that portion of this home buying obstacle course. Just remember, if they say that they need a document, they usually mean that day or the next. Waiting a week, may not only delay, but cancel the work that they have done on your loan so far, so the quicker then better when it comes to helping them collect information.

10. Placing your "bid"

This is where you take into account all the things the inspector told you was in need of repair on the property and you submit it to the seller. Depending on the situation, the seller may either fix selected issues or may give you a monetary value towards the issues to fix them yourself. In our case, we asked for a couple of small things and one VERY large thing. We asked that they fix a toilet, three windows, and some plumbing. We also requested that they not fix the roof, but replace it.

They passed on the smaller issues, but have decided to replace the roof for us. They are getting their own quotes for the work and are choosing from them to get the best price, but the repairs are still going to equal out to a couple thousand dollars. This leaves the smaller issues for us to handle ourselves later on. We have been extremely lucky that we've encountered a seller that is both desperate to sell the home and understanding of our first time home buyer status.

We have friends that have been purchasing a house at the same speed as we are and when they placed their bid for the repairs, the home owners gave them monetary compensation towards the purchase process instead of making the repairs themselves. This is always a possibility if the seller lives out of state, is elderly and unable to do the work themselves, or is possibly selling the home "as is".

So here we are. Scott and I are currently awaiting the other quotes to come in from the two companies that the seller hired to evaluate their cost for replacing the roof. Once that's been completed, the only thing left to do is agree upon a quote, await the undersigning of the contract, and go through with the closing! Our closing date is currently July 19, but we are hoping that everything will run smoothly enough that we can close early and get out of this apartment! Here's hoping we will be packing up our stuff earlier than expected.

P.S. Anyone who wishes to comment can! The comments are left open so that you can leave your message even if you don't have a profile. Just be sure to leave a name so we know who you are!


  1. I loved this post! We are in no way ready to buy a house yet, but when the time gets closer, I will for sure reference this again!

  2. Since I've moved around most of my life, home is truly with the one(s) you love! Mom