I know a lot about real estate – now.But when I bought my very first home, I knew nothing about real estate and hadn’t even starting working in the field. In fact, I was like any other brand-new home buyer out there: fired-up, overeager and completely uninitiated.
So, I made a mistake or two. Or twelve, give or take. Many of these were mistakes I didn’t even realise I’d made until a few years down the line.
Fortunately for me, none of my first-time home buying mistakes were disastrous – and fortunately for you, I’m going to share them here, so you don’t have to repeat them!
Here are five lessons I learned in the course of buying my first home, so all you first-timers don’t have to. (Agents and homeowners, please share your lessons in the comments, too!)
Confession #1: I would never have found my house searching in what I thought was my price range. I started my house hunt pretty clear on what price range I should be searching in, based on what I could afford and how much my lender said I was qualified to borrow. Then, as buyers are wont to do, I began to inch my search price range upwards, looking at homes listed above what I could afford in hopes that I could find a higher-priced (read: better) home, then negotiate my way back down to my target price range.
In one way, this strategy worked: tweaking my price range upward opened up a number of new properties that I’d never seen before. Unfortunately, the market climate was then very similar to what it’s like now – in my area, it was very common, at the time, for the better homes to get somewhere between 3 and 10 offers. So, I would make an offer on a listing priced slightly above my max, and not only could I not bring the seller down, the home would actually sell for more than it was listed for.
In the end, I tweaked my home search price range a bit below where I’d been looking before, and voila – that opened up lots of new properties, too. But these were properties where I could be very competitive, even against other buyers, at offer prices well within what was affordable to me. One of these lower-priced homes, in fact, turned out to become my home.
The upshot: If property pickings seem slim, tweak the price range you’re using to search for homes – in both directions.
Confession #2: I had to learn to walk a fine emotional line. Here’s the deal – at the time, my home was the biggest purchase I had ever made – by far. I was a lawyer, so I’d worked on some major transactions, but still – we were talking about the place where I’d live every day, the place for which I’d be writing what then seemed like a whopping check every month, the place where my kids would grow up, for Pete’s sake! So, I wanted to get it right, like every first-time buyer does.
At first, I did not want to even consider making an offer on a place unless I found everything about it to be utterly breathtaking. I mean, I wanted the place to literally sweep me off my feet, sing me a love song and woo me with rose petals before I’d even give it the time of day.
And I saw homes that did – they seemed perfect. To me and, apparently, to every other buyer in the greater East Bay area, that is: the places I loved beyond all reason ended up being the subject of 10, 15, even 18 offers.
At the same time, my agent showed me this dumpy little house that just did not do it for me. Someone from another era and with a decidedly different design aesthetic than mine had lived there, for sure: there were actually rooms wallpapered – wallpapered! – with roses, bows and kittens. And there was what I liked to call “puke green” shag carpet all over the place. But the layout and neighbourhood were nice, it had panoramic Bay Views and hints of hardwood could be seen in the closets.
But my agent showed me this place at least three times, and at some point, something clicked in my head. I started to be able to visualise how things *could* be in that home, after some work. Eventually, I bought this house – because it showed so poorly, as a listing, I had zero competition and was able to get it for a song. (It’s the Bay Area, so it was a big, long song, but much less than I’d expected to spend.)
And even more eventually, it became more beautiful and much lovelier to live in than I’d ever imagined it could. But that only happened after much more work, much more money and much more time than I’d ever expected. Without the vision for what could be, I’d have certainly gotten discouraged at some point along the way.
So, yes – it is important to fall in love, before you pull the home buying trigger. But it doesn’t necessarily have to be with the property in precisely its present condition. Ultimately, I realised that your love for either the home or for your vision of the life you could realistically live in that home someday are equally solid foundations for making an offer on a property. At the same time, I learned, it is foolhardy and exhausting to get so emotionally attached to a home that you overextend yourself trying to get it, or have a hard time moving on to the next listing if you are ouitbid.
It’s a fine emotional line, but one that you have to learn to walk.
The upshot: Don’t make an offer unless you’re excited about the home – as it is now, or as it could be. But don’t get too excited until after you’re in contract and past the inspections and appraisal.
Confession #3: A “free” agent is the most effective sort. Allow me to be frank: I’ve been called bossy. I know what I like, what I don’t like and how to get it – in every sort of situation. I know the keywords that have proven success getting me exactly what I want from every vendor: from the tailor to the vet to the over-the-phone order taker at my favourite Vietnamese restaurant (“A number 64, please; no tomatoes – pause while they find the “no tomatoes” button; no onions – pause while they find the “no onions” button; substitute shrimp for the tofu. Thanks!”)
Here’s what I found out: buying a home is simply not like placing an order. And working with a real estate agent is not like working with any other sort of salesperson. Rather, working with a great agent is like a hybrid experience of working with an expert salesperson who intimately knows their inventory and the ins-and-outs of how to make a deal, and working with an expert advisor like a CPA or an attorney, who you pay specifically for their advice, insight and expertise at complex topics that you know little or nothing about.
My agent showed me that little ugly kitty wallpapered house first. Then he showed me the places I wanted to see, we made offers, and I didn’t get any of them. Then he showed me the puke green carpeted house again. And then again. And eventually, I could see what he saw: the massive untapped value. The huge potential. The sound investment and the great place to live that this home ultimately represented for my family.
And so it was that I learned this: if you trust your agent, give them the freedom to show you things that may not fit inside the little, precisely defined box of what you think you want. I’ll go even further – give your agent the freedom to show you things that you don’t think you’d like. Then have a dialogue: ask them to help you see what they see – ask them to make the case for why you should consider the property. And stay open to seeing things through their eyes – that sort of flexibility can open up whole new realms of possibilities and properties. (And if you don’t trust your agent, you’re just working with the wrong one. There are plenty out there worthy of your trust.)
The upshot: Stay as flexible as you can, as long as you can. Keep your deal-breakers and must-haves to a minimum to get maximum benefit from your agent’s expertise.
Confession #4: I didn’t do my due diligence. Now, I was no idiot: I went to all the inspections, read all the reports, asked all the questions. Yet and still, I missed things – a couple of big things. I’d been told my new home, which was in an unincorporated area between two towns, was in the school district of the closest town – which was a very desirable district. But I didn’t actually call the district to verify this and, as a result, my kids spent a year taking two buses to get to the not-so-great schools of the district we were actually in before I pulled them out and spent a small fortune on private schooling for a number of years.
Further, as I became friendly with the neighbours after I moved in, they asked me how I’d felt about the “tragedy” that had taken place in the property before I moved in, and expressed admiration for my bravery at buying the place. I had no idea what they were talking about, did some digging and found that someone had tragically killed themselves in the home not long before I bought it.
Were these lapses in the legally required disclosures? You bet: the seller absolutely had a legal obligation to make accurate and complete disclosures on both these points, and didn’t. More importantly, though, these were both things that I could have uncovered quickly myself by simply calling the school district and doing an online Google search for the property’s address (the unfortunate death had been covered in the news which was just starting to be available online). And I didn’t. But that was the last time I ever made those mistakes!
The upshot: Hire the pros for your inspections and such, but ultimately, due diligence is a dish best served DIY (do it yourself).
Confession #5: I didn’t know what was really important to me. I thought square footage, good views, safety and quiet were all criticaI. I insisted those items were deal breakers – and got them. I also wanted a big yard for the kids, fantastic views and a good commute to a wide variety of areas, but these were a little lower down on my priority list.
In retrospect, I can say that I definitely missed the mark on a number of other things. I thought a safe, quiet neighbourhood was great – something off the beaten path. I thought an area with no rowdy school kids around would be ideal for the serenity I sought. So, I bought a home in a neighbourhood filled with retired couples, some of whom I still count as dear friends, high on a hilltop with stunning views. I thought I’d be so delighted to take my kids and dog to the park to play that I’d rather have lovely views than a backyard.
Unfortunately, “off the beaten path” translated to “really far from the nearest Trader Joe’s.” And no noisy kids meant that my own kids had no neighbourhood friends. Before we even made it to the next autumn, the ageing population cause the powers that be to shutter the nearest schools, so we had to bus the kids two towns over to get to our “local” elementary school. And before long, I started my own business, having zero time to take kids or canine to the park, so all of my little monsters spent much more time indoors than I would have liked.
Needless to say, my next home was on a quiet street, just a few blocks away from a bustling shopping district, near the kids’ school – and it had a big backyard, a much more diverse age mix of neighbours and a dog park at the end of the block.
The upshot: Cultivate clarity about your vision for your life, rather than just the specs of the home you think you want, before you start your house hunt.
The other upshot: Whatever you dislike about your home (and there will be something) you’ll have a chance to correct the next go-round.
All: What lessons would you like to share with those buying a home for the first time around? Fess up!
Read more posts on Trulia’s Real Estate Realist »
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