March 30, 2010
Oh, and also, I bought a house.
It was a pretty arduous process, and maybe one day, I'll bring myself to write it all down. Took me 1 year to find it, 3 contracts that feel through, 2 months to close, 1 month to get the money to fix it up, and so far, 1 week at my parents house while I wait for it to be liveable.
A few recommendations when looking for a house (they seem basic, but trust me, many people don't follow these simple rules):
1- Don't Buy Above Your Budget
D'uh right? Well turns out millions of people boought houses that were way too expensive for their salaries, and ended up defaulting on their mortgage. Take me for instance. My monthly mortage is probably about $400 more than it should be. I have to get a roommate. No big deal... Except that my house is in really bad shape, so until it's liveable, I have to pay to 100% of mortgage by myself. Therefore, I am living with my parents (sorry mom and dad). This is not an ideal situation, and I obviously didn't take my own advice.
2- Get An Inspection
Not getting an inspection is like buying a used car, and not checking under the hood to see if there's a motor in there. Seriously, never, ever, ever buy a house without an inspection. It's not worth spending $200,000 - $600,000 and not checking on your investment. You're paying for it for 30 years, don't be an idiot, check it out beforehand.
I got 2 inspectors, and a termite inspector. And I'm still not confident with my investment :)
3- Don't Get An Adjustable Rate Mortgage
These are loans that cost you, say 4% per month in interest rate, but can be adjusted by your bank after a certain amount of time. So you pay 4% for the first year, and then... Surprise! the second year, your bank decides to charge you 10% in interest. That kind of sucks, and your monthly payment difference can be more than you can reasonably afford (especially if you're barely making your payments with the 4% interest).
4- Get a Realtor You Like
This is important because, when you're looking for a house, it feels like everyone's out to get you. Seriously, the termite man wants you to buy a warranty (even if there's not one termite to be found), your loan officer and realtor makes a huge cut from your closing costs, your contractor overcharges you to fix a leak, and your friendly neigborhood services provider reminds you that your tiny uncut plot of lawn can cured and cut for a monthly fee of...
Well you get the point. Many people's salaries hinge on your home purchase. So do yourself a favor and pick a realtor who can tell you the truth about houses (not just praise them), explains the process of home buying patiently, has time to show you around neighborhoods you like, and can recommend contractors/appraisers/inspector without pushing their services on you.
I started with an nice realtor who just didn't have enough time to show my places. She was often 30 min to 1 hour late, and obviously didn't know the more "up and coming" (sometimes downright ghetto) neighborhoods I wanted to visit. She would spend the first 10 minutes of each car ride speaking to her daughter on the phone in an annoyingly gushy baby voice (ok so that last one is not a deal breaker, but man was it annoying).
My current realtor was honest with me in letting me know what was a good deal, could sense when I was just forcing myself to settle on the wrong house, was encouraging when I lost bids on contracts, and was available to me by phone and by email for the most inane questions on home buying.