Holy sh*t. I bought a house.
OK, it’s a condo. But it’s still a little nuts.
Two years ago, this wasn’t even a remote possibility. It wasn’t anywhere on my radar. But here we are. I own property.
Here’s something I hear a lot: “Wow! You bought a house? You’re such an adult!”
In reality, it was just an opportunity I was fortunate enough to stumble into.
Purchasing real estate is a really big decision – it was something I didn’t take lightly. There are a lot of factors at play, and if you’re in a busy market, you have to be calculated, strategic, and a bit lucky.
A quick FYI: I’m not a real estate mogul. Far from it. But it’s my hope that as a recent first time home buyer, my advice will be a little more relatable than so-called “experts” in the real estate industry. I’m just a guy who bought a house, and here’s what worked.
1. Get Out of Debt
If you still owe student or credit card debt, pay it down significantly before you consider buying. You want to be in a really good place financially before making such a big investment, and that means knowing a significant portion of the money you earn will be able to go towards the house. I was fortunate enough to graduate college with no debt, and the only student debt my fiance has is paid for by her graduate school (smarty pants).
I realize that debt is something that many people struggle with, especially those who weren’t born to upper class families or who have been negatively affected financially by a host of unfair political and socioeconomic reasons. I’m not saying that buying property is only for those without debt – it’s just going to make things a hell of a lot easier.
2. Pay For a Credit Score
It’s incredible that people will opt for a free credit score instead of paying $40 to get one from Experian (arguably the most important one because it’s always checked for major purchases). $40 in exchange for knowing if you’re qualified to buy a house is a no-brainer investment.
To be totally honest, I didn’t pay to check my credit, but my fiance did and had a ding on her report. Because she caught it, we were able to submit for reconsideration and remove the blemish. Phew.
If I could jump into a time machine and tell myself to do it, I would.
3. Read Up
Sign up for some email newsletters. If you’re serious about buying a home, it needs to be something you’re learning about on a regular basis. That means putting the learning opportunities in your inbox where you can’t miss them.
We all know the internet is 1% worthwhile reading and 99% garbage, so take everything you read with a grain of salt. Don’t believe anything until you’ve found multiple confirming sources.
But you have to start somewhere. Here are a few subscriptions that helped me get started.
- Fortune Builders (wealth building)
- The Simple Dollar (wealth building)
- Bigger Pockets (real estate investing)
Once you get an idea of the number of bedrooms and bathrooms you want, be sure to sign up for Zillow and Redfin as well so you can get email updates when listings in your preferred location(s) go live.
4. Invest With Someone
Find someone who you’ve known for while to invest with. You’ll be able to increase your buying power by combining your savings for a down payment. But because you’ll both own the property, be sure that person is someone you’ll still be friends with in 10 years.
If you go this route, be very thoughtful about exactly why you both want to buy and be sure your long-term goals for the purchase are the same. If you want to sell the house in 3 years when the market is up, you don’t want to co-own it with someone who wants to hold onto it.
5. Do The Open House Thing
Go look at some houses. It will give you a good idea of the space and overall feel that will bring you happiness. This is going to be the biggest investment you’ve ever made, so the decision is not one to make lightly – you’ll want to buy property that you’ll love every time you walk in the door.
Don’t settle. Period.
6. Get An Agent You Know Personally
This is probably more important than anything else I’ve said. Unless you’re experienced in real estate yourself, there’s only so much you can absorb before putting an offer down. Sometimes doing what’s in your best interests isn’t what’s in your agents best interest, so a pre-existing relationship and complete trust will be a big ally.
Our real estate agent was my fellow Haverford soccer alum (go Fords) and played kickball with my fiance in DC. He also passed the online background check with flying colors.
In the end, going with someone who really had our backs made the difference. Our guy helped us through everything from pre-approval to organizing our bank loan. The agent of the seller was someone they had no relationship with, and that gave us the upper hand when it came to contract negotiations.
7. Forget “Buying” – Think “Investing”
To me, my house is just a bank. Every month, I pay a mortgage, but it’s really just investing money into a “bank account” every month. I can’t take it out immediately, but if I need the funds within 3-6 months, I could have them.
Yes, the housing market could take a downturn, meaning I could lose value on the property. But I made it a point to purchased a home in an in-demand area.
Will it increase in value? Did we get to the moon using a slide rule?
In Closing
Have people in debt bought the perfect home on their own without knowing their credit score, seeing a single open house, or doing any research with the help of a random agent?
Probably, but they’re the exceptions.
If you do decide to jump into it, give this another read and take your time to get every step right. Your result will be more powerful than the sum of each step it took to get there.