My (very limited) Real Estate Advice

After purchasing a house, I thought it might be useful to do a post that gives advice to average people about real estate from an average non-real estate person.  Disclaimer: I don't sell, list, or purchase real estate for a living.  I have bought one house that my family is going to live in.  This is just a guide that might make it a little easier on your mind.  It's not set in stone and is by no means the gospel truth.

1.  Be Realistic
This is probably one of the hardest things about trying to find a house.  Let's be honest for a minute.  We all want the dream house.  Whether we mean to or not, the dream house will make an impact on our house hunting.  Sometimes you just have to give yourself that reality check that maybe you aren't ready for the dream house...that you should be focused on finding the right house for the situtation and time in your life.  That means 2 things.  First, you will have to compromise on what the house HAS to have.  There will be a couple of things that are absolute deal breakers.  That's fine.  Just try not make that list huge or else you will be looking for a tiny needle in a huge haystack.  Second, you probably cannot afford the DREAM house.  That's why it's called a dream.  If you can afford it, this post isn't for you.  Almost everyone wants a big beautiful home that carries the big price tag, but that probably isn't realistic.  I once read that you shouldn't spend more than 2.5 times what you make in a year.  Using this example if you make $30,000 a year than you can spend up to $75,000 on a house.  I have also read that your payments should be at or below 25% of your monthly take home pay.  Either way, the point is you have to be able to afford to make the payments every month.  What is the point of owning a home that is making your financial world so difficult you can't even really afford to buy toliet paper?

2.  Know Your Local Market
Do research before you go actively looking.  What is the average asking price of real estate in your area?  Does this market offer anything affordable that I would be willing to live in?  When I was a real estate junkie, I knew every listing in my price range by every local agency.  I had looked for so long that I could just drive by a new listing and tell you the price.  This was slightly annoying for the person who was riding in the car, but ended up helping me so much.  I could recognize when a place was over priced and avoid it.  Some people might be willing to wrestle it out in a pricing war, but I prefered to make it as simple as possible for myself.  I probably missed out on a couple of houses, but I am ok with that.  After purchasing our house, I found out that one of the houses I really liked that I had ruled out because it was over our budget sold for $30,000 less than the asking price.  I had to pick my jaw up off the floor when I found that one out.  I don't think that's very typical.  You won't know if a house is worth the price if you have no clue what housing is selling for.  Of course you can have an appraisal done, but that costs money and time which you can't do for every house you look at.

3.  Choose Your Realtor
I should say that you do not have to have a realtor.  You can purchase a house without one, which means no middle man & less money coming out of your pocket to pay someone else.  If you decide to use a realtor, here are a few things to consider.  I read that you shouldn't use the same real estate agency that the property is listed with.  It makes sense.  Their job is to get the best possible price for the seller.  Therefore you, the buyer, might not end up with the best deal.  Choose an agent that you like and are comfortable with.  You can ask family and friends for recommendations, but in the end you have decide the one you like most.  My husband and I talked about 3 different agents from 3 different agencies.  One we had shown us a home several months before, one was recommended by a friend who had bought a home from this agent and was currently listing the same home through that agent, and the last one was an older cousin who had gotten into selling real estate after their retirement from the power company.  We decided that what we wanted most was someone who wasn't a good salesman, but who was a good, honest, blunt person.  Family won that requirement.  Not because it was family, but because if you ever met them you would understand.  I'm not saying that the first 2 weren't honest people.  I don't know them well enough to say one way or the other.  I just didn't figure they would say things like "It's a piece of junk.  Don't buy it." and family would.  I was right.  Our family did work for the same agency that was listing the house we wanted to purchase.  It turned out fine for us.  We paid less than the asking price and had sellers assist on closing.

4.  Be Patient
This is the hardest one.  Unfortunately it takes time.  The entire process is slow and filled up with endless paperwork and waiting for so-and-so to hear from so-and-so, etc.  I have been told experiences by a friend who tried for 3 houses before finally being able to close on one.  That sucks.  We waited 3 months before all the i's were dotted and t's were crossed.  It felt like forever.  We lost faith, got frustrated, gave up, and starting looking for a new house every other week.  We stuck with it though.  It's hard when you have to wait on other people to do whatever they have to do to get it done.  It's worth the wait.

I only have one piece of advice left.  If you have little children in house (we have a 5 year old and a 1 year old), hire someone to pack your stuff up.  It won't take nearly as long.  They don't have to stop packing every 5 minutes when one says "I'm hungry" or the other one has to have a dirty diaper changed.  Lucky movers.

OMG We bought a house!

My husband and I have been renting the same tiny house since we got married in 2006.  We were extremely lucky to have found something so affordable with an older couple as the land lords.  In August 2007, our oldest son was born.  After bringing him home from the hospital, it only took a few days to realize that babies come with a LOT of stuff.  I remember days when I felt like we didn't rent a home...we rented a storage locker for baby products that we just happen to sleep at also.  After living there for around 3 years, I told my husband we needed a bigger house.  We were the typical American family who dreamed endlessly of home ownership.  I was a real estate junkie.  I looked weekly at every local real estate website finding an endless parade of "perfect little houses".  Due to layoffs and shut downs, employment has not always been on our side so our American dream was always put off until some other time.  Fast forward to April 2011 when our second son was born.  At this time, space was gone.  We were a family of 4 (with the parade of baby products yet again) living in a 647 sq ft 2 bedroom rental house.  My husband was finally convinced that we needed to move, even if that meant we would have to pay more in rent.  The search began.

The first thing we learned is that even though the ecomony is bad, rent is out-friggin-ragous!  If I wanted to sell one of kids and a kidney on the black market I might have a chance of paying that much.  Although my kids drive me a little crazy at times, I don't want to sell them....or my kidney.  It seemed like every place we called was way out of our range.  I finally told my husband that for what these people wanted in rent we could buy a house.  We talked it over and decided to apply.  The worst that could happen was that we would be turned down.  It took us a couple of trys to find the right place, but we were approved!  I did the happy dance in the living room of my tiny rental.  Thank goodness you missed it.  My real estate habit payed off nicely at this point.  We narrowed our search to 3 potiental houses.

I must say that out of the 3 my husband and I each had different favorites before we ever walked inside of them.  I had one that I just knew from driving by looking at the outside and viewing the photos online it was my house.  He had chosen the one with the most property.  While we both promised to keep an open mind and view all properties equally, on the inside I was totally bias.  We were both completely wrong.  My perfect house turned out to be much better in my dream world than it was in reality.  I mean it was alright, but it wasn't MY house.  The one with the most property was the one with the most work.  There wasn't a surface in that house that would have made it through the remodel.  I left seeing money signs floating straight out the front door.  No way!  Not to get all cheesey, but the 3rd house was such an easy find.  I had my scientific list of must haves, size requirements, room placements, yard maintainence, etc.  The way we chose our house was very simple.  We walked in and we just knew.  THIS was OUR home.  It wasn't just a house that someone put on the market.  It was the home that was meant for us.  I know it doesn't work out that way for everyone.  Some of you may find a home that 8 other people want and have to duke it out.  I know we had family and friends praying for us to find something.  I believe God answered those prayers.  He lead us to that house.

We moved in 3 days ago.  I love this house.  My family loves this house.  Life is good.