Let me know if I’m duplicating an existing thread I couldn’t find, and I’ll delete this!
Does anyone have favorite resources or advice for first time homebuyers looking pretty far ahead (this is in my roughly 2-5 year timeframe, barring windfall or disaster)? I found a couple of I think older OMD podcast episodes I’ll listen to later, but are there great books, websites, other podcasts/podcast episodes?
If it makes a difference, we’re a modest income couple with a dog and no kids who will probably be married by the time we’re more seriously looking, and we will probably be looking in the city where we currently live.
What should I be doing, learning, reading about a couple years in advance?
I am friendly with (ie I know from the running community) a good number of local realtors. One told me once (right before COVID) I was welcome to sit down and chat with him any time, and that it’s never too early to start thinning about that. Is there etiquette around that? Is buying him coffee a fair trade for that conversation, is something more expected, or is that just something a casual friend who is a realtor would be likely to do? Also, is it better to completely avoid a realtor I have any kind of existing relationship with for fear of souring a relationship?
I’m super happy for this to become a larger discussion about first time home buying beyond the elements of it specifically relevant to me!
Thank you for starting this thread! I am 12-24 months away from being ready to buy a home and I have so many questions, but I also don’t want to start working with a realtor and use their time when I know I won’t be buying anytime remotely soon.
FWIW- I tripped in to buying a house while were were thinking about getting married. I didn’t use a realtor because we bought from a friend. I did all that work so I was able to talk the price down 6% (which is way smaller than the cut a realtor would have taken).
I did work with and AMAZING mortgage broker, though. She ran a bunch of scenarios fo get us the best loan out there and advised us to wait to get married if we could. Husband had terrible credit due to student loan forbearance. We had the minimum down payment so an FHA loan was best for us and they always consider both partners. Most traditional loans, one partner can take out the loan without the other’s credit affecting it. We refinanced a couple of years later into a traditional loan to get rid of our PMI since it never goes away with an FHA.
We had not planned on buying a house so we weren’t financially “ready” but were presented with a crazy opportunity we couldn’t pass up. Essentially we did all the wrong things as a risk to buy into a neighborhood/house we wouldn’t have been able to in any other circumstance.
But it sounds like you’re doing things the right way! Don’t feel guilted into signing a contract with a realtor because they put effort in to court you. I think there is something to your trepidation when it comes to working with someone you know. Depends on the relationship, I’m sure but I would avoid. And I agree with your realtor friend. It’s never to early to start shopping around.
Since I’ve never worked with a realtor before, I wonder how long most contracts are for. Six months? Interested in the courtship processes. Keep us posted on what you learn!
Every state has different rules on inspections but we found an awesome guy. Be sure you spring for the termite inspection option.
Do you have an era or style of house you lean toward?
Oh man, I don’t even know about these different kinds of loans yet . My partner I think has good but not great credit. He has no debt but a relatively brief credit history. I have excellent credit but am working through consumer debt I expect to have paid off by mid-late 2022. We have a hill to climb in terms of down payment money, but I’ve started to save, and he’ll be starting to save in the new year and his savings capacity is higher due to a modestly higher salary and lack of debt.
It will probably be a south Philly rowhome, older (but I honestly don’t know how old), not the new construction I call “gentrification housing”
I think for most people, especially if you have a down payment, being married helps because it raises your income in your debt-to-income ratio.
We just had little savings and Husband’s credit was… not good.
Very cool! I love houses with history and character. Our house was built in 1911 and has only been owned by four women. I would have a hard time being sold on a new build. Although 100 year old houses have their challenges she says, as she’s wrapped in 4 blankets.
House buying is an interest and hobby of mine, but I’m in Canada so my specific experience won’t really help you guys. I’m following along anyways.
Yay! After my first-time home buying experience, I’ve thought about getting my brokerage license just to have it.
I weirdly thought it was interesting and fun!
Ahhh, yeah, with my US-centric blinders completely ignored that aspect of things . I’m happy for folks to discuss issues specific to other countries here though!
Pay for the inspections. To do otherwise is penny wise and pound foolish.
Look into FHA loans, and if either of you qualifies, look at VA loans as well. Those are really a fantastic deal for a lot of people.
You should expect them to buy you the coffee. It is a sales/relationship building cost.
So, in our current complex home buying adventure, my dd got a mortgage for her share of the house we’ve bought together in her name only.
Her dh is the stay at home parent, so no income, and his credit score isn’t that great because of an old student loan issue, and it worked out better for the mortgage to just be her. They use a credit Union, though. He’s also on deed, though.
See if your city/region has a home buying resource center. We took a day-long class on the home buying process that was worth the cost of registration-they talked through the whole process and had realtors, inspectors and mortgage brokers on hand to answer questions about the process.
Plus they offered financial classes, loans, and other resources for new/lower income prospective homeowners.
In Portland, the center we used is called the Portland Housing Center.
If you already know the neighborhoods you’re looking at, start following the market to get a sense of what’s a good deal (or not). Build a spreadsheet if that’s your thing. If this wasn’t a pandemic, I’d recommend attending as many open houses as possible, that way you get to see houses in real life without the commitment of having an appointment.
If your friend realtor is really offering to talk with no strings attached, chatting with them can’t hurt.
However, if you’re 2-5 years out I would probably suggest spending more of your time getting your finances in order than any specific listings.
Finances: raising your credit scores as much as possible, saving a down payment, maybe talking to a mortgage broker, etc. I find the first few months in a new place always have unexpected setup expenses, so it can be MUCH less stressful to buy below your absolute max budget, and/or have extra savings set aside for that. A homebuying course sounds super helpful. A local one might have specific loan/first-tikr buyer programs you could take advantage of.
Convos with partner: Figure out whether you’re up for a true fixer-upper, recent rehab ready, or something in between – ie how much of your free time & brain space you want to devote to your home. Budget, neighborhoods, access, must-haves. Whether you’d want to do things like have a roommate for a while (or longer) to speed up your timeline.
Eight years ago I bought my first house, an older rowhouse very similar to what you’re looking for. We had all the spreadsheets, budget stuff, & mortgage pre-approval ready to go. Then the viewings & offer happened very, very quickly.
It was a fun and exciting time, I still live in the same house and love it despite quirks, and I’m very excited for you and Sweaty!
Depending on where you are, these aren’t really things actually! We’ve bought twice, sold one, in the PNW. No one seems to have heard of realtor contracts or buyers agents like I read about in guides online. So I think that’s my contribution: read what you can, but know that there can be regional variances for sure.
Absolutely. I’m texas based. We have weird rules. Or might be per brokerage firm? Unsure
Rules vary by state for sure. This time I need to have a real estate attorney to review the contract before closing, which I never had to in two other states.
And as @rural said, inspections are important. Never skimp on inspections.
Does anyone have thoughts about down payments vs savings for immediate renovations/upgrades? This is theoretical and years away, but if I were to buy the house we’re renting I’d want to put like $30k of energy efficient/green upgrades on in ASAP. But having 30k on hand on top of a down payment seems wild.