Buying a home is a lofty goal for many. It was for me, and this year, I finally achieved it. It was an exciting time for sure, but it was also filled with a lot of stress. I knew there would be stress – don’t get me wrong. But there were a lot of things that I wish I had known before buying a home.
If I had an idea it was coming, or could prepare for it, it definitely would’ve helped lessen my stress. Hindsight is 20/20 and I want you to learn from the things I wish I had known!
7 Critical Things I Wish I Knew Before Buying A Home
I do want to preface this that I did buy a home in early 2024, aka one of the worst markets you could buy a home in. Prices were still quite high. And, even though mortgage interest rates were just starting to drop, by no means were they low. Navigating the market alone is stressful in itself – I definitely don’t want to knock that.
1. Choose The Right Real Estate Agent
I cannot stress this enough. The real estate agent you choose can have a big affect on your stress level. Unfortunately, the agent I worked with did not help my stress in the slightest – they ended up adding to it.
Rather than going directly to the seller real estate agent, they would come to me with questions. This was something which shouldn’t have been happening. A real estate agent should be making the buying process easier for you, not harder. Keep that in mind when choosing an agent.
I regret not speaking to multiple agents and getting recommendations from other buyers who had used them. I made the mistake of thinking to myself “their social media looks good, they totally know what they’re talking about”. Unfortunately, yes, I fell into that trap. So, another pro tip – don’t believe everything you see on social media!
2. Shop Mortgage Rates
If you do need a mortgage just like I did, don’t just go with the first bank or lender you spoke with. Before buying a home, we actually used two different mortgage brokers to source different rates for us.
This was especially important for us since rates were pretty high. So, even the smallest bit we were able to save, the better for us. I did feel bad when we ended up not going with one mortgage broker. But, by not going with them, we ended up saving thousands.
3. Account For Closing Costs
Having the downpayment isn’t enough. Accounting for the first month’s mortgage isn’t enough. You will need to account for closing costs too, and let me tell you, that’s not cheap.
The filing of closing costs comes along with all different fees such as title transfer fees, state/city/town taxes, real estate attorney fees, mortgage broker fees, and so on and so forth. Let me tell you – the fees add up!
Your closing costs will vary, but definitely be sure you know what they are going to be so you can make sure you have all the money you need. You will also need to pay for an inspection and for a surveyor, too.
4. Be Careful Of Your Credit Before Buying A Home
If you are in the process of acquiring a mortgage, there should not be any (or many) changes to your credit. This means that your salary shouldn’t change (especially not take a dip!), any debts you have such as a car lease shouldn’t change, and so on.
Layoffs were happening at my company while I was embarking in the mortgage process so the stress was unreal; not so much about losing my job, but knowing if I lost my job, we wouldn’t receive the mortgage approval. Thankfully, I ended up not losing my position – but still, it was an eye-opening experience.
Another thing? Be weary of opening new credit cards during this time. I had opened up a new credit card a month before I applied for my mortgage, and I had to go through hoops to explain why I opened it. I even had to have a conference call with the mortgage broker and the bank. We had to confirm that all was good with the card in order to get the mortgage approval.
5. You May Have To Pay Even More At Closing
Not only did we have to have our down payment at closing and our closing costs… there were other fees which required payment. In our case, the sellers had an oil tank in the house. They had filled the tank earlier in the year, so you bet we had to repay them for all the oil they wouldn’t be using anymore as it’s technically under our ownership.
We also had to reimburse them for some taxes they had paid in advance, too. I will admit – thankfully we were not responsible for figuring out the amount owned and neither were the sellers; that’s all done by the real estate attorneys.
We were just told how much “extra” money to have on hand to cut checks for at the closing. But dishing out even more money than we had thought was stressful! Keep these additional costs in mind before buying a home to save yourself a lot of stress.
6. If You’re Doing Reno, Be Prepared
We knew when buying the house that we had to do renovations on it. We just did not realize how much reno had to be on the house until our contractor tore down some of the walls.
Especially if you are purchasing an old house, you are going to run into issues. Think of things like a lack of insulation, black mold, or rusty plumping. The plumbing in this house was so corroded that when our contractor went to move a sink, the pipe easily snapped off the wall!
Depending on the state/town/county you are in, you will also likely need permits for everything. These permits also not only cost money, but they take time, too.
I didn’t realize just how long this process would take, so do some preparation before buying a home that needs renovations. But on the bright side, once it’s done, the house will be exactly what I want it to be!
7. Pick Your Location Just Right
Luxury homes in the United States all come with their own different price tags, and according to The Luxury Playbook, it’s best to keep an eye out for the ones on the lower side you can then make more valuable over time. To find such properties – that are considered luxury but still not out of the realms of affordability – you need to look in the right place.
That means scouting out where luxury property is likely to be built and then cross referencing the prices against each other. Indeed, some cities come with the real premium costs, such as New York City, but some will be on the opposite end of the scale, like San Antonio. Keep your eye on the market and follow how it goes up and down in each of these places.
Final Thoughts On Things To Know Before Buying A Home
Throughout the process, I learned so much and hope that sharing my experience and what I learned here can help you. There is so much to consider and know before buying a home. But, these key points are things that I feel can often be overlooked.
That being said, don’t let the process intimidate you! Remember the purpose of this investment for you and your family and keep that excitement for creating a new home fresh in your mind. Good luck!
