The Stress of Buying a House

I come from a home where moving was a hobby. Before my parents divorced we moved for my dad’s job (an airline pilot) about every 4 years. Once we landed in Michigan we stayed, parents got divorced and both remarried. My mom married a Realtor. Can you imagine how many times I’ve moved?

More than thirty-five times in my life. I’m only 28 years old. It wasn’t uncommon for my {step}dad to come home and announce that he sold the house! We had 30 days to find a new one. Some times that meant we lived in a cottage on a lake for a few months while the real house we were moving into was gutted and rebuilt. Other times it meant that my {step}dad had made a client a guarantee (if their house didn’t sell in time, he’d buy it) and we moved in to someone else’s home while we found the next one for our family.

Are you confused yet?

It was a blast. I loved moving. Always a new room to try out – I decorated each and every room of mine different. Picking out paint colors by their names only because I’m a hopeless romantic and falling asleep to Apple Blossom walls just felt better than falling asleep to green ones.

Once I turned 18, I took the state test myself and became an agent, assisting my {step}dad in his office, holding open houses and taking clients of my own on the journey to home ownership.

I was flabbergasted at how little the public actually knows about owning real estate, and dealing with frazzled clients and their stress over not knowing up from down in negotiations or price margins or market value … it was eye opening.

I’m no longer an agent and neither is my {step}dad having passed away of lung cancer 8 years ago … but we still move often. And things are changing rapidly in the Real Estate Market these days. Banks, Mortgages, Foreclosures. For Sale By Owner.

I sat down with a long-time friend, our personal Realtor, to dish on some of the most important things to know when you’re entering the market for Real Estate.

20 months ago we sold our home for a loss to the tune of $20,000.

Why the hell would you do that? Because staying in that house was never going to get us where we wanted to be. Mortgage free. We kept sinking money into it with no foreseeable return – so we got out while we could. It get’s trickier because we started to BUILD another house and then SOLD it before it was finished which helped us pay back the $20,000 loss we took on the first sale.

All the while renting and paying off a car loan.

We tried to buy a little $30,000 home this past spring and were denied a mortgage by our bank.

Six months prior, they were willing to loan us almost $300,000 for the home we were building, and now they wouldn’t approve $30,000??

Let’s talk about that stress.

Terry, our friend and Realtor, has been in the business for 25 years – he started out when the interest rates were 18-19%. He’s seen the booms, the crashes, and the current lull in Real Estate, despite amazing interest rates and banks turning people away who can actually afford mortgages. It’s gotten a little topsy-turvy.

Turns out you can’t be in the “Real Estate Game” these days without a pre-approval letter. So before you make the call and ask for an appointment to see that dream house – you first need to sit down with your banker and hash out the bottom line.

Our stress relates to this very issue because we had the preapproval. Twice. They preapproved us, promised us and on the day we were supposed to close – called to tell us it had been denied. There would be no closing.

Banking is the most important part of Real Estate today.

It’s not done til it’s done, my {step}dad always used to say.

Our situation has to do with our tax returns. We’re owners of 4 different companies, one of them had just received funding and although it is stated very clearly that, personally, we are not liable for the funds return if the business goes south – the bank saw that as a risk to high to make and wouldn’t touch us with a ten foot pole. Despite that we’re set up as employees of these companies or that our paycheck’s have never stopped or gone down, or that we have zero debt.

Most people look online for homes before ever walking into a Real Estate office or speaking with a Realtor. This is helpful. Do this.

However – not every house that’s available is online, so when you’re ready to tour make sure you have an agent on your side.

I don’t have enough money to pay for an agent.

You are stupid. As a buyer you DON’T pay for an agent. Anything the agent makes comes out of the sellers proceeds. And if you’re looking at For Sale By Owners (which you should, with your agent, no matter what) it will always be discussed and disclosed how their fee (not always commission on FSBO) will be handled.

Buying a house is an emotional roller coaster and entering into that with large sums of money makes it even messier, have an agent on your side.

Communication is key.

If your Realtor isn’t willing to answer your phone call, email or text every single day, some times hourly, you have the wrong Realtor. The more you converse and ask questions – the better they understand what you need, where you’re at and how you’re feeling about the process. This is like Gold to your Realtor.

Working with someone who know’s the market you’re in is like dating someone knowing you will get married. Period.

If they can’t court you – don’t walk, run. Fast.

How do you decide?

Most folks have a list of wants when they go in to house hunting. This is great! However getting the best deal is different than getting what you want. For us (Serial Movers) it’s always about the exit. I make money at the buy when we own Real Estate (learned my lesson the hard way on the last house we owned) and if I can’t see past the purple carpet or tiny kitchen to the extra zero’s when we move in 2 years? Then I know I am not buying an investment. When I’m attached to the color on the walls, I want to buy a home to live in forever.

Getting a good deal means you might not get everything you want, and getting everything you want might not be the best deal.

What else?

My very first closing was for a friend I sold a condo to – her father was a Realtor, but she still didn’t know where a closing happened. I called her the morning of to remind her where to meet us and she asked, confused, “You mean we’re not meeting at the condo and just cutting a ribbon?”. {blink, blink}

After you have your preapproval, look at every house that interests you and some that don’t. (Maybe more that don’t than do, depending on how depressed your market is). Your Realtor might understand what it is you’re going after and can keep their ears open for the homes that never make it to market. Someone’s thinking of selling but wants this, that or the other thing. Or needs to simply do a switch, not a sale. There’s a million ways to buy a home – Realtors who know how to be creative (instead of one step to owning a house, some times it might take 6) and will work harder for you than anyone else.

When you find the house that you want (or NEED TO HAVE) make an offer. Consult with your Realtor – there’s always room for negotiation. However, be kind. It’s just as emotional to sell a house as it is to buy one. Remember that. Good deals happen more often when you’re willing to be human about the process.

Negotiations can take some time, so be patient. Don’t forget to blow up your Realtors phone with “Have they responded yet?!?!?” calls. This is very exciting.

Once the offer has been accepted and you’re under contract you’ll need a few more things. Like Title Work (which the Realtor usually takes care of for you with your Title Office, this is where you’ll close on the home).

You’ll need to have a good faith payment (mini down payment) when the offer is accepted. This says to the sellers that you’re serious. It is refundable if at some point the deal falls apart because of banking. But then your offer must be subject to financing.

Get a home inspection. You always want a home inspection. Always. Negotiations can re-open after the home inspection if some major issues were found. Like burst pipes or a shotty roof.

Get a pest inspection also, your Realtor cannot tell if there are termites.

Then you wait for paperwork to be done, usually with the Title company and Bank. You get a closing date – which normally is 30 days from an accepted offer, and then you sign your life away.

Remove the emotion and it’s very straight forward, but finding a Realtor who understands that buying a home is essentially buying your security in this world, will take the stress of the situation and turn it into a story you’ll never forget.

No related articles.