11 Exhausting Home-Buying Steps I Didn’t Fully Understand Until I Bought My First House
I FINALLY BOUGHT A HOUSE! 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 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!)
1. The 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 just 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 $5,000 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. [Editor’s note: the percentage you pay in interest will depend on your loan type — if you have good credit and qualify for an FHA loan, you may have the option only have to pay 3.5% down. Of course, if you make a down payment of less than 20%, you will typically be required to pay for private mortgage insurance.]
2. 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 to 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.
3. The loan. To buy a house, you most likely need to get pre-qualified for a loan, unless you have the money up front. Depending on your credit, you will be approved, or you may be told what you need to do to fix your credit to qualify. 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. It’s kind of like going with the first wedding gown you try on. That first one is just the beginning.
4. The home search. You qualified, and 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 of years and snatches our coin faithfully! You wanna go get your life, too! No IG and YouTube clip concerts for you!
5. 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, it’s not like that. I thought they suggested houses to look at and drove you to look at them after you first met, and that they were all great negotiators. Not necessarily the case — 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.
6. Expectations on houses vary. You might think houses come like I did, with appliances and green grass and in 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 into 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 a low inventory of houses. It’s a buyer’s market when there is a large number 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 other offers without this need.
7. You found a house — but 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 the house. The seller might get many of these, and they might accept yours or they might not. They may try to get you into 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 along in the process. But hey, don’t get discouraged — this is just part of the game. (The part NO ONE tells you.)
8. You are under contract; now what? You have time to decide if this house is really the one you want. It’s kind of 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 every thing that is wrong with it (as far as the inspector knows), 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. It’s not final until it’s final. So when the heck is it final?
9. …when you close!!! Now when is that? It’s after you have given your lender everything but your right foot in paperwork and proof of money and called credit card companies to confirm you do, in fact, pay on time. They call this process “underwriting,” and after you get through it, 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!!! Now what…
10. Your new address will be 123 Home Depot Way. You will spend more time and more money in the first couple of 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 going to happen — accept this eventuality. It’s pretty annoying.
11. 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 okay! 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 it 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, 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 by learning from these secrets, which I WISH someone had shared with me.
This Curvy Life is a reflection of the life of a 30 something, self-care enthusiast, travel and Disney lover named Danie. She is a proud puppy-mom of a one-year-old cockapoo and a women’s self-acceptance champion who started This Curvy life in 2017!
Image via Unsplash
