The other day I was skimming Jeremy Lin's blog, and it reminded me that I have a blog too and should update it at least once before the year ends. On a side note, the more I learn about Jeremy Lin, the more I'm convinced he's my soul mate. He plays songs from The Lion King on his keyboard, doesn't like vegetables, and included my favorite Bible verse in one of his posts. Be still my heart!
Last October, I wrote an entry describing the process of buying a car. Who would've known that a year later, I'd write an entry describing the process of buying a property? Here's the random/destined sequence of events that led to this important decision: break up with boyfriend >> decide to get a dog >> decide to rescue a dog >> some dog shelters won't let you adopt unless you're a homeowner >> decide to become a homeowner. In August, I was researching dog shelters and told my mom, "It's so frustrating that some shelters don't let you adopt unless you're a homeowner." She replied, "Well, if I were you, I'd buy a condo." "Really?" "Yeah." ".....Okay!" Three months later, I closed on my first property.
I watch a lot of HGTV, so I thought I was pretty prepared for the buying process. HGTV supplies important information, like how to prioritize your must-haves, how to negotiate, and what issues are easy fixes (floors) versus nightmares (black mold). But you know at the end of those house-hunting shows when the buyer's offer is accepted, everyone celebrates, and then they skip to three months later or whatever when everyone's all moved in? I'd like a show about what happens during the time frame they skip, because that was most difficult/confusing for me.
So this is how it went down. First I figured out what cities/neighborhoods I preferred, noobed around on Zillow to get a general idea, found an agent I trusted, and started looking at different units. Originally I thought I'd like to live in Royal Oak, because it's closer to work and has more young people...but after a while, I realized that choosing a top school district could make reselling my place way easier in the future, so I stuck with Troy. After about a month, I made an offer on a place, but it didn't work out. When you're negotiating with a seller, it's important to make sure the seller isn't crazy or sketchy. In most cases, you're not going to talk to the seller directly, but from their actions and the terms with which they negotiate, you can sort of figure them out. If they seem desperate to sell and insist on selling the place "as is," or if they're super stubborn and refuse to compromise on something perfectly reasonable, it's probably a bad sign. Trouble early on will likely escalate throughout the closing process (which takes longer than you'd think). It's simpler and wiser to walk away unless you're desperate to buy, and I'd never recommend house-hunting in a limited time frame unless there's no other choice. So I kept looking and about one month later, I made an offer on another place. After a bit of negotiating, I got a satisfactory price and hired an inspector, read the bylaws for the condo association, and applied for a mortgage.
An inspector is almost as important as an agent...find someone you trust, preferably with reliable references. A condo differs from a house in that you technically only own the inside of your building. The condo association maintains the exterior, like grass and snow removal etc. and you maintain the interior. Older condos are similar to townhouses in that each unit has its own space, separate from the neighbors. Newer condos in this area are more like apartment buildings, where your floor plan overlaps with your neighbors', so your bedroom might be on top of their living room, which is on top of your garage etc. The newer condos seem nice and look cool, but personally if I own a property, I'd rather not be dependent on neighbors (for example, if they had a leak that damaged one of my walls and caused mold or something). Applying for a mortgage is complicated, and it's the part I understand the least, because of all the numbers/math... Basically the goal is to get as low an interest rate as possible; a higher rate can be offset by a point system, which can be a good option depending on how long you envision staying in that property. Make sure there are no pre-pay penalties or hidden fees--there are always going to be ridiculous fees required for no justifiable reason, but make sure that they are the standard ridiculous fees, not unknown ridiculous fees in addition to the standard ones. It also helps to have a mortgage agent you trust.
It takes a long time for the mortgage to be approved, and it felt longer to me than the house-hunting process, because at least with house-hunting I was busy and somewhat in control of the progress. With the mortgage, I was submitting papers and materials, but I had no idea what they were being used for or how long it would take. During that time, the title company (a third party that sort of oversees the process and provides documentation for the property) does an appraisal of the property. Here's a suspicion of mine that not many people may realize--sometimes the title company purposely appraises the property as close to your offer price as possible. The comps they reference in the report are skewed in a way to make you think you got a great deal. In mine, they only included comps that sold for higher than my offer price...but if you look at official records, there were plenty of recent comps that sold for lower, which they neglected to include. It wasn't a huge deal for me, so I didn't bother to contest it. But if every dollar matters and you feel this same suspicion when buying a place, it may be worth looking into.
Something else I learned during the closing process is that agents are humans, not machines...they make mistakes, they get emotional, and sometimes they are manipulative. If an agent, whether yours or the seller's, does something strange that makes you feel guilty or uncomfortable, don't accept it. Your agent should never pressure you into buying a place, and the seller's agent should never directly contact you at all. I didn't have a problem with my agent, so I don't have advice for that except not to hire them if they're untrustworthy... But I do have advice if the seller's agent does something out of line: if it doesn't directly concern you, stay out of it and let your agent deal with it, because that's his/her job. If the seller's agent makes false accusations against you specifically, it may be wise to calmly/briefly refute them in a written record. Not only will it protect you in case the issue comes up again, but it also shows you weren't born yesterday and are not willing to be pushed around.
Finally, there's the closing date, when everyone--seller, buyer, agents, title company, mortgage company, friends and family if you wish--comes together to sign papers and hand over the down payment. You realize that the names you kept seeing on the forms and using during negotiations are actually connected to human beings with lives and personalities...and you also sign a TON of papers. Be prepared for awkwardness...it's inevitable. But if you're lucky, you'll talk to the sellers about the property, which can be invaluable...and at the end of the day, you'll have a new home (along with a substantially diminished savings account and an intimidating ever-growing to-do list).
I never imagined I'd buy my own place a) at this age and b) by myself. On HGTV, the buyers are usually young couples who just got married or are planning to have kids...and my agent told me I'm the youngest client she's ever had. It wasn't like I needed to buy a place; I could easily have found a satisfactory apartment. But besides for wanting a dog, I chose to buy instead of rent because factors like location, the housing market, and my financial status were in my favor. Houses in this area are pretty inexpensive, and although it costs a little extra to fix up the house and maintain it well, it'll be worth it when I resell or rent it out in the future...whereas with an apartment or rental property, I'd just be paying money without investing in anything. And it's a good learning experience at this point in my life, when I can really concentrate without the distraction of kids or job-hunting etc. If you're not interested in buying a place at all, this entry was probably super boring. But if you are considering it and want to know more, I hope it was helpful! There are plenty of websites with suggestions for the house-hunting/purchasing process, but maybe there are a few beneficial things here that you won't find anywhere else. :)
