I consider myself a relatively intelligent person. I passed Organic Chemistry for goodness sakes! But recently, I learned that despite watching HGTV home shows, I know absolutely nothing about buying a house.
I’m lucky my grandfather bought me home when I was in college. It’s served me well for a few years now, but with three sons, a nephew, and a dog, 1200 square feet isn’t enough space. So for a year or so now, the hubby and I have spoken about our dream home…or at least something with enough space to grow into…and beginning looking at listings to get a feel for what we wanted.
First off, you should know the hubby and I have different tastes. I actually enjoy cozy, smaller spaces, but with an open floor plan. The hubby would be happier with four walls and a roof with no rooms at all. (Not happening.) Neither am I turning a pole barn into a home. (Side eye at hubby.) Both of us grew up in manufactured homes, so my tastes veer toward those. I like modern. Hubby likes antique. But then the craziest thing happened….we finally agreed on something!
So…cue drumroll…we find a home built in the 1920’s with 3000 square feet, extremely close to my work, in an upscale area, that needs only a few, minor repairs to be perfect for us. There’s a potential to be modern, but with Southern charm. Great, right? Even better is the fact we saw this house last fall, fell in love with it, only to have a sale pending sign out front the next time we drove by. Lo and behold, it ended back on the market for $35,000 less a few days ago.
A sign? We thought so. So last weekend, we called up the listing agent and set up an appointment. The home was dated, to be sure, but the bare bones of this structure and the fact that it’s priced well below most homes in our area made it too good to be true.
Here’s where my first mistake came in. I had NO CLUE that you typically don’t ask a listing agent to show you a house. Say what?? Then why is their number on the sign? Honestly. Can someone explain this to me? I stumbled upon this tidbit while Googling. Cringeworthy moment, right? So now I’ve put myself in a single agent transaction, which apparently puts the buyer at a disadvantage of being unable to haggle prices with a realtor. I can work with this. We’re a small town, and this house has been on the market since June, and we’re happy with the asking price. If the agent and seller are okay with us using the same, I am.
But now this means, the hubby and I will have to haggle for the price on our own. The agent’s fiduciary responsibility is to the seller, which I understand, so I wouldn’t want a conflict of interest. My current plan is to email the listing agent, explain my lack of understanding, and ask if she would like me to go through another agent. It’s up to her. I can work either way. I already have my idea of asking prices anyway, and I plan to ask my cousin or friends for copies of their contracts so I can get an idea of what’s “normal”.
Next up…funding. I can’t shell out $100k on my own, so I called up my cousin who is a loan officer for a bank, but since her institution doesn’t deal with FHA loans, she can’t give us much help in the area. We then started searching online. Words like escrows and appraisals and closings have my head spinning. We move on to a mortgage company in a neighboring city, who approved us for a loan $30k over the asking price of the house. Good, right? Well now we have self-employment incomes to verify, taxes to gather, the list goes on and on and on….I’m terrified the pre-approval will fall through after we spend time and money getting to the point of real approval.
Next up, upfront money. How much do I need? What’s the max I’ll have to pay? Down payments terms I understand, but what happens when, who pays what, makes absolutely no sense to me. Can someone tell me how in the heck first time homeowners make it through this?? Maybe I’m just a worrywart, but I’m frightened out of my wits that something will happen that I can’t afford, or we’ll do something wrong, or we’ll miss something during inspections. (Which…guess what?….apparently inspections aren’t required! HUH?? Nope, just an appraisal. HGTV freaking LIED to me. Appraisals we have to pay for at $500 a pop, apparently.)
The other thing, besides my anxiety, is timing. I wanted to wait another 6-18 months to buy a home. Stars will align and financially we’d be in a much better position during that time period. But we don’t want to miss a chance on getting a home that has the potential to be a gem! I’ve already picked out paint colors and designed flooring concepts. (Flooring is one of the repairs we must do.)Good thing is I’m married to a woodworker/cabinet maker. The hubby is chomping at the bit to make an offer, while I’m trying to convince him there’s a potential the home may still be available in a couple months. After all, there is the down payment and closing costs to consider.
I need a primer on this, I really do. Anyone experience the same thing? I’ve learned Google isn’t helpful on the topic of mortgages at all. Everything I’ve learned about FHA seems to be the opposite of what I’m reading…even at the FHA website. The good news, though, is hopefully within the next 2 years, we’ll be proud homeowners!