The Savvy Girl’s Guide to Buying Your First Home

{ Initial Image via The Brick House }

Since Emily is spending some time meeting with publishers in New York this week (she is working on her first book!), I though I would take the opportunity to share something that I have learned a little bit about over the last 18 months:  Buying your first home!  If you live in a major metropolitan area, the cost per square foot of owning your own home can often times seem outrageous.  This, coupled by the fact that there are a lot of misnomers out there about home buying, can make the whole process seem really overwhelming and unrealistic.    Have no fear, though, future home buyer.  These five steps should make the process a breeze… or at least breezier!

STEP 1: WHAT YOU WANT vs. WHAT YOU NEED

I found it helpful for Aaron and I to complete this sentence about what we were looking for in our home:  “Ideally, I would like _______, but I could settle for ________.”  Your first home, most likely won’t be your last.  Unless you have really great circumstances, your will probably have to make some concessions .  That being said we all have non-negotiables so its important to know what those are.  Ideally I wanted three bedroom, at least two full bathrooms, a big backyard with a pool, decent kitchen, dark wood floors and to be in Studio City.   Being realistic though, I narrowed my list of non-negotiables to three bedroom, two full baths, some sort of yard, and a neighborhood I felt safe in when Aaron was traveling.  If you are buying with your spouse, be sure to know what their non-negotiables are too.

STEP 2: GET PRE-APPROVED

I recommend beginning with a mortgage broker for two reasons.  First, they are able to look at all of the options out there and get you the best deal as far as rates, points, and closing costs.  Secondly, they will be able to get you pre-approved for an amount so that you find a house you could pounce on it.  This is really important in competitive areas!  We saw our home within 24 hours of being on the market and it already had three other offers!  If we hadn’t been pre-approved we would have lost out.  Even if you think that buying a house is still another year or two down the road, go ahead and talk to a broker anyways so that you know what you can afford given your current financial situation.

STEP 3: ASSESS THE COST AND START SAVING

First: Go online and begin looking at homes with your specifications to see what the approximate cost is going to be for what you want.  My favorite interface for this is Redfin.  Does it fit within what you were pre-approved for?

Second: Once you have an idea of what the home you want will cost, hop on over to a mortgage calculator like this one and find out how much your mortgage will be.  If you put 10% down on a home that costs $330,000 with 4% interest and a 30 year fixed loan, your mortgage would be a little over $1400/month.  Now add to that about $1000 a month for property taxes and home owners insurance.  These figures will vary so much based on what state you live in and the kind of house you buy, but $1000 is an above average amount to estimate.

Third:  Begin saving the difference.  Now that you have determined that it will cost approximately $2400 a month to own your own home, see what it feels like to pay that every month.  If your current rent is $1500, put an additional $900 a month into a separate savings account.  In a year or two when you go to purchase your home, you can do so with every confidence that you will be able to make that payment of $2400 a month because you have already been doing so.  The other bonus is that in two years you will have saved an additional $21,000 towards your down payment!

STEP 4: FIND A REALTOR

When you are ready to pull the trigger on buying your first home, it’s important to have a hard-working realtor on your side.  Ask friends in your area for recommendations and ask questions about their experience.  We LOVED our realtor Todd Jones.  He lives in the area that we wanted to buy in so he knew it better than anyone and he came highly recommended from a friend of ours.  Our house was a short sale so we went through all of the ups and downs of that process and he was awesome!  If you are in the Phoenix area, you will want to get in touch with Steve Rook.  He is the best in the biz there!  (Also, depending on how much time has gone by, you might need to contact your mortage broker and get re-approved.)

STEP 5: SEAL THE DEAL

When we made the offer on our home and found out that three other people had already done the same, I pulled out all the stops.  I wrote a genuine heart-felt letter to the seller explaining all of the things we loved about the home and how we could see ourselves starting a family there some day.  It may seem like a small gesture but it puts a face and a story to the names and offers they are considering.  I have met three other people who got their properties the same way!  Of course I took it a step further and included our wedding photo just to seal the deal 🙂

One final note:  It is a common misconception that you both need a perfect credit score and a 20% down payment to get approved in this market.  Not true!  There are many benefits to having great credit and 20% cash that will work in your favor, but it’s not 100% necessary.  Talk to a mortgage broker about all of your options.

Hope this helps, future home buyers!

Xo,

Jen

  1. Pingback Tough stuff, house hunting, and sanity savers | Brick Road Creative Studios

  2. Jen, great post! As a veteran Realtor that works with a lot of young buyers, I pat you on the back for giving such great advice.

  3. All of this sounds so dreamy! I fear my life in NYC may not ever see the days of ‘owning’ instead of ‘renting’….. maybe upstate one day! (a girl can dream, ok)

    +
    Amy

  4. Kate Pallan

    10/23/2012

    That Steve Rook is pretty awesome! He also makes a mean martini! Thanks for the great post Jen…a definitely must read!

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