My Experience As A First Time Home Buyer

Hi everyone!  Christie here--one of the team leads of The Honest Agent Team.  I'm going to be honest....I am SUPER excited to by typing up this blog post today.  When I became a first time homebuyer, I would have killed for an article about the true ins and outs of the process.    I've really been looking forward to sharing my experience in blog format.  I thought it would be a great idea to create an "insider's guide" into the scary, and not so scary, parts of buying a home.  

PARTS OF THE PROCESS THAT WERE KIND OF SCARY 

Loan Application:  I had never applied for a loan before, beyond buying my car (which was quick and painless).  I spoke with my mortgage lender and applied for the loan over the phone while driving.  It took about 30 minutes, and some of the questions were pretty in depth.  A few examples were where I had lived in the previous few years, a thorough work history, a thorough financial picture, and a formal running of my credit score.  Since the lender holds the purse strings, I was really nervous at this point because in order to buy a home, you have to be able to obtain a loan!  

Appraisal:  In this market, appraisals are coming in low relatively frequently.  While this isn't a huge deal, the appraisal process in general had me a little bit nervous.  However, I prepared for it by coming up with a plan to move forward with my purchase no matter how the appraisal came in (a plan for "bridging the gap" in the event of a low appraisal).  

Final Contingency Removal:  Removing ALL contingencies essentially eliminates your "safety net."  At this point, if you cancel for any reason, the seller keeps your deposit (in my case, $10,000).  So, signing off on full contingency removal is a big deal! I made sure my loan was approved, appraisal was done, and inspection was done at this point to mitigate the risk as much as possible.  

PARTS OF THE PROCESS THAT WERE TOTALLY EASY 

Negotiation Process:  Since I'm a Realtor myself, this was easy.  I found my condo off market, coordinated with the seller directly, and came to terms quickly.  If you're having trouble finding a property on-market (since inventory is so low), let me know, and I can try to do the same for you! 

Inspection:  I have a great home inspector, and it was awesome to have him inspect a home I was buying MYSELF!  The townhouse was a bit of a fixer, so he definitely included some items on the inspection report.  I personally did not ask for any repairs to be made, simply because I am fully renovating the property anyways, and it seemed silly to ask for things to be repaired that I'd be ripping out in a matter of weeks.  

Signing loan docs:  This can sometimes go slightly awry, depending on how experienced your notary is.  Our loan doc signing went off without a hitch and took only 30 minutes or so.  Here's a pic of our notary preparing our loan docs!  I don't think she knew that I snapped this.  She took our fingerprints, and we signed and signed and signed.  

PRO TIPS

Keep calm:  As a buyer, I was actually very low-key and relaxed throughout the process.  This is probably because I'm a Realtor and understand what was going on each week in the transaction.  It really is a Realtor's job to work behind the scenes to push the transaction along, not the client's job to stress about it.  A good Realtor will ask the client to take care of that week's "action items" that only they can do, and then will handle everything else! 

Think Outside The Box:  In this seller's market, sometimes you have to get creative as a buyer.  I personally hand-wrote notes to owners in the HOA community I wanted to buy in.  I would have been willing to waive my appraisal contingency if needed.  I was willing to accept the condo "as is" without asking for repairs.  I was willing to do a 60 day Escrow in order for her to give her tenant sufficient notice.  This type of flexibility will help you "win" in this market! 

GET TO IT:  Real estate is one of the #1 ways people build wealth.  I bought at the "upper" end of this market because I wanted to get in the game, despite the timing of the real estate cycle.  My next purchase will hopefully be an investment property, once the market dips a bit.  My long-term goal is to acquire enough rental properties to have a lot of 100% passive monthly income!  Join me?  ;)