My First-Time Home Buying Experience
There was a lot that went into buying my first home before I even spoke to a real estate agent. I've been wanting a house since I was a kid and realized that people could just go and get a house.
I always figured I had bad credit. I had never tried to finance much, and since even my vehicle had been purchased in someone else's name, I was pretty sure I had never built any useful financial record at all.
So, I began saving money. I knew I'd need a 20% down payment for a house since banks were stingy about giving loans out since the 2008 financial crash. I worked hard from about 2010 to 2013 and figured I had a good amount saved up, then I contacted an actual financial institution for advice.
Apparently, I had all kinds of financial history and great credit and the down payment was wonderful and all, but more of a formality than anything concrete. They said 10% would be passable. In fact, 5% wasn't too outlandishly low.
My mind was blown, and the cavalier attitude of the loan officer made me cautiously favor just putting 20% down when the time came, since they charge you mortgage insurance premiums if you put down less than that.
Besides, I was going into this with a game plan. Here's the breakdown:
- Get a fixer-upper that I can add value to with labor
- Put 20% on it right away
- Get a 15 year loan, so I can finish paying my home off sooner
- Retire early, no problem
I'm still working on the last bullet point, and will be for 14 more years, but here's the story of the great and terrible things that came from my home buying experience, which took the better part of a year and a seemingly endless investment of my own time.
First Time Home Buyers Guide
Meeting my Realtor/ Frienemy
After getting pre-qualified by my bank's loan officer for my home loan, I was introduced to their preferred realtor, Janet. She was a part-timer, she admitted but was the most qualified to assist me in the areas I was looking around in. I had done some research to find the areas that had houses old enough to need fixing up and weren't in terrifying neighborhoods. Afterall, there are fun parts of Dallas and not-so-fun parts of Dallas. Price sort of goes along with the quality of neighborhood, but there are pockets of niceness that aren't highly priced here and there.
She sent me plenty of places to look at and instantly I vetoed all of them. She just didn't see what I was looking for. We tried to see eye to eye, but either she wasn't interested in helping me find a deal, or wasn't good at spotting them. Eventually, she just gave me access to the MLS temporarily and I combed the listings looking for places with the right characteristics. I would name them and she would just set appointments to view the property and show up to let me in.
I'm not an appraisal expert. I'm not anything, really. I like to work with my hands and get dirty, and that's about it. But, some houses were just awful and they were obviously not good buys. One had large cracks throughout the drywall from the foundation going bad and the walls sagging. Janet walked into a room and pretended to stumble across to the other side and I saw what she was trying to tell me. The whole place was leaning. We left after laughing about how bad it was.
Other houses were good buys, but beyond what I could pull off while living on the premises. Also, my wife might murder me in the process. She was sure to point some of the more disasterous remodel projects, some of which I reassured her i wasn't afraid of, but others I knew she was dead-right about. Flooring and drywall I can handle, a flood I cannot. Besides, who's to say it won't flood again? No thanks.
We did this for months. I would find them and she would show up to let me in and offer advice. One place she warned me about ahead of time, but wanted to meet anyway. The condo was priced amazingly. The neighbor even waved as I walked up to the front door. Janet came outside and smiled and waved. Then she met me at the front walkway and pointed to a woman in shorts talking to someone through the window of a car.
"What?" I asked her, trying to see what she was pointing at.
"Just watch a minute", she told me. Janet wasn't a perfect real estate agent, but she was worldly and knew some things.
The woman screamed something at the driver and the window slowly began to roll up. The woman balled up her fists and started wailing on the glass as the car sped off. Suddenly, the realization that she was a prostitute dawned on me and I looked over at Janet, very surprised.
"This is a nice area, but this particular neighborhood is just very rough" she explained, and after looking the place over, there were two different girls on the street corner and the original one was gone. I took her word for it and we continued on.
This isn't exactly normal as far as real estate agents go. They're supposed to be finding the houses and showing them to you based on what you ask them for. In our case she decided to take a backseat role and I was happy to let her do that, since I shop for houses like ordering from a Denny's menu: just look at the pictures until one gives you a good feeling.
Eventually, after finding several places we both liked the look of and getting outbid on every one of them, we stumbled across a 3 bed 2 bath brick single-family home in a quiet suburb about 20 years old. Somehow, this place hadn't been on my radar, but after driving through the neighborhood, I honestly liked the feel. There were kids playing everywhere and there was a park on the way in with well-kept grounds. Most of the lawns were mowed, which was a good sign.
The house itself looked gorgeous on the outside and I sighed, because I knew this place was listed too low for how much curb appeal it had. Janet was already there, and I parked next to her. She opened the front door and walked me inside. The entryway looked dingy on the inside, with the glass caked in dust and the paint faded in places and dirty in others.
The carpet through most of the house was worn, and the kitchen floor was vinyl with huge brown stains and some peeling and the wallpaper was very tacky. Janet said that the house trailer her friend lived in when they were growing up had floors just like it. The bedroom walls were covered in hand prints and the bathroom had the ugliest shower possible in it.
Structurally, it was solid as a rock. There was a two car garage, and whoever was selling it had left a huge metal work table in it. There was an attic with storage already built inside. I was excited, this place might actually be purchasable at the list price. If it had been redone, it would have listed $30,000 higher.
I told her to place the offer.
She didn't seem confident that an investor wouldn't come snatch it up as a flip property. She mentioned that the house was for sale by the actual owner, so a real person might care that a family wanted to buy it instead of letting a profiteer grab it. She offered to send a letter template over to the lady selling the house, and I said I would write it myself if that was okay. she advised against it, but being a good persuasive essay writer from my college days, I went for it.
I introduced my wife and I, told the lady about our family planning and how we looked forward to our children playing in that park. I told her how we wanted to to put all of their books on the big built-in bookshelves in the second bedroom and how we were planning on using the outdoor space as a play and gardening area. I told her how much I was looking forward to fixing the place up myself, by hand.
When Janet read it she got really excited and sent it over to the seller's agent. The lady selling the place loved it, too. She accepted my offer though apparently my offer wasn't even the highest.
We moved into the closing of the sale.
Should I Buy a Fixer Upper?
Random Luck and Stubbornness Can Make Dreams Come True
We began to hit major road blocks with the financing the second we tried to move forward. My heart was broken several times over.
First, there were fees to be paid upfront which came out of my down payment money. Then I had to put earnest money down on the house to secure the offer. Once that was done, my finance guy's boss called me on my cell phone to tell me that the deal was messed up because of a filing error on their end and they were going to be unable to finance my home because of the deadline on the sale.
I cussed him out, then five minutes later the finance guy himself called me to tell me that his boss was an idiot and that everything was fine. I cussed him out too. I'm not a jerk, but these people were taking my family's future lightly and messing up my hard work.
The ordeal stretched almost a month, to the very last day of the sale deadline. They informed me that the loan would only cover the appraisal value of the house and nothing more and that my down payment would have to go down from 15% to 5% to make the deal go through still. I refused, and said they needed to make some kind of special arrangement.
By this point, I was yelling at someone from the bank nearly every day about something whether it be the closing of the loan to the deadline and getting it extended, or just calling customer service to tell someone else how badly the loan officer was bungling the whole thing despite it being a vanilla, plain-Jane home loan that I had already been pre-approved for.
Sure enough, on that last day, they said I wouldn't budge to the lady selling the place and she said fine, she'd lower the price and let me have it at the appraisal value.
My agent was floored. I was floored, too. At this point, I felt like I was just being unreasonable for sport and not accomplishing anything other than beating up on bank customer service people and my finance guy. However, after getting mad to the point of complete obstinence, everyone gave in and I got the deal of a lifetime.
At the closing, Janet was there and I thanked her big time. She gave me a bottle of wine and wished me the best. I figured she was glad to be done with me by now, but she stays in touch to this day, a year and a half later. The finance guy was there, too. I apologized to him and told him to apologize to his assistant for me. I made her cry twice on the phone (Oops, don't mess with my home purchase. I'm very emotionally invested.) He said he was happy for me, but seemed relieved to just be done with it once the papers were signed.
In the last year, we've fixed up the kitchen and made the bedroom nice again as well as restored the walls and floors. I still have plenty projects to do, but the value keeps climbing and so does my quality of life. Apparently, my quiet little suburb is a hot market now.
Again, not a professional anything, but getting a deal is as easy as being the person who looks the hardest for them and times the buy just right.