I know a lot about real estate - now. But when I bought my very first home, I knew nothing about real estate and hadnâ€™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 didnâ€™t even realize Iâ€™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, Iâ€™m going to share them here, so you donâ€™t have to repeat them!
Here are five lessons I learned in the course of buying my first home, so all you first-timers donâ€™t have to. (Agents and homeowners, please share your lessons in the comments, too!)
Confession #1: Â 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. Â Â
In one way, this strategy worked: tweaking my price range upward opened up a number of new properties that Iâ€™d never seen before. Unfortunately, the market climate was then very similar to what itâ€™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 Iâ€™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 youâ€™re using to search for homes - in both directions.
Confession #2: Â Â I had to learn to walk a fine emotional line. Â Hereâ€™s the deal - at the time, my home was the biggest purchase I had ever made - by far. I was a lawyer, so Iâ€™d worked on some major transactions, but still - we were talking about the place where Iâ€™d live every day, the place for which Iâ€™d be writing what then seemed like a whopping check every month, the place where my kids would grow up, for Peteâ€™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 Iâ€™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 â€œpuke greenâ€ shag carpet all over the place. But the layout and neighborhood were nice, it had panoramic Bay Views and hints of hardwood could be seen in the closets. Â
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 visualize how things *could* be in that home, after some work. Eventually, I bought this house - Â because it showed so poorly, as a listing, I had zero competition and was able to get it for a song. (Itâ€™s the Bay Area, so it was a big, long song, but much less than Iâ€™d expected to spend.)
And even more eventually, it became more beautiful and much lovelier to live in than Iâ€™d ever imagined it could. But that only happened after much more work, much more money and much more time than Iâ€™d ever expected. Without the vision for what could be, Iâ€™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 doesnâ€™t necessarily have to be with the property in precisely its present condition. Ultimately, I realized 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. Â
Itâ€™s a fine emotional line, but one that you have to learn to walk.
The upshot: Donâ€™t make an offer unless youâ€™re excited about the home - as it is now, or as it could be. But donâ€™t get too excited until after youâ€™re in contract and past the inspections and appraisal.
Confession #3: Â A â€œfreeâ€ agent is the most effective sort. Allow me to be frank: Iâ€™ve been called bossy. I know what I like, what I donâ€™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 favorite Vietnamese restaurant (â€œA number 64, please; no tomatoes - pause while they find the â€œno tomatoesâ€ button; no onions - pause while they find the â€œno onionsâ€ button; substitute shrimp for the tofu. Â Thanks!â€)
Hereâ€™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 didnâ€™t get any of them. Â Then he showed me the puke green carpeted house again. Â And then again. Â 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. Iâ€™ll go even further - give your agent the freedom to show you things that you donâ€™t think youâ€™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. Â And stay open to seeing things through their eyes - that sort of flexibility can open up whole new realms of possibilities and properties. Â (And if you donâ€™t trust your agent, youâ€™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 agentâ€™s expertise.
Confession #4: I didnâ€™t do my due diligence. Â 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. Â Iâ€™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 didnâ€™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 neighbors after I moved in, they asked me how Iâ€™d felt about the â€œtragedyâ€ 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? Â You bet: the seller absolutely had a legal obligation to make accurate and complete disclosures on both these points, and didnâ€™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 propertyâ€™s address (the unfortunate death had been covered in the news which was just starting to be available online). And I didnâ€™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 didnâ€™t know what was really important to me. Â 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 neighborhood 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 neighborhood filled with retired couples, some of whom I still count as dear friends, high on a hilltop with stunning views. I thought Iâ€™d be so delighted to take my kids and dog to the park to play that Iâ€™d rather have lovely views than a backyard.
Unfortunately, â€œoff the beaten pathâ€ translated to â€œreally far from the nearest Trader Joeâ€™s.â€ And no noisy kids meant that my own kids had no neighborhood friends. Before we even made it to the next autumn, the aging 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 â€œlocalâ€ 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 kidsâ€™ school - and it had a big backyard, a much more diverse age mix of neighbors and a dog park at the end of the block.
The upshot: Â 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) youâ€™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? Â Fess up!