Most of Craft Thyme’s exploits revolve around the little Reganskopp homestead, but occasionally we do projects in other’s homes. When our friends, Trevor & Justine, decided this would be the year to get married and buy a house we wanted to cheer them on. We also gave them LOTS of advice (solicited & unsolicited) as first time home buyers. They, at least, seemed appreciative (thanks for pretending guys) of our first time home buyer boot camp. While most real estate agents should help a first time home buyer, we thought we would distill our experience into a quick first time home buyer guide in case you don’t have the helpful sort.
First, let’s set the stage: Western North Carolina real estate is an odd market. Houses around Asheville, range from pricey to ridiculous. They are a mix of old (40’s-60’s), really old (1900’s-30’s), and brand spanking new (which are the ridiculous prices). It makes it very hard to find a first time home that can be afforded and also isn’t a dump. Which is where we come in! We offered to help look at houses and then do some basic cosmetic transformations when they finally found ‘the house’… Guess what? They found ‘the house’! Of course, the house came with some awesome items like cracked ceilings, faded eggplant paint, stale cigarette smell, but also large open living/dining area, and spacious yard. We looked it over with them and saw lots of the potential they also saw. Offer was made but that is just the beginning!
First Time Home Buyer Boot-camp
Please note we are NOT licensed real estate professionals, but we have bought, sold, refinanced, and fixed up a number of houses in Western North Carolina. Between Adam and I, we have purchased 5 houses. Three of them built before 1935! Talk about a lot of repairs, mortgages, and learning experience shooo, but always double check our advice with the paid professionals.
Before you begin any search make a list of the things you must have and want to have. If you are shopping with a spouse you might find that your ‘need to have’ list isn’t exactly the same.
When comparing lists our friends found that they had to pay attention to find both a large yard and a location that was not so far away from the city/civilization. The need list and your price range will inform your buyers agent and your search. Your ‘want list’ will help you make the final decision and allow you flexibility in your budget. Once you have a budget and your lists remember the following.
- Be prepared to look at a lot of properties. Most first time home buyers will not have a good idea of what items are in their price range. Hopefully you will be pleasantly surprised! However, in a lot of cases you may find you need to reign in your expectations to meet your budget. Or you can be like us and buy the first house you saw (Brianna) or decide you will buy a house when you walk in the door (Adam). Don’t be like us!
- Once you have seen a few properties start doing your own web searches. Many property websites will set up alerts to your email when something new comes in the market in your search criteria. Being the first to put an offer in on a property can make a huge difference in a hot market. You will also get lots of spam. Trust me I am still getting email about houses in and area I lived in 5 years ago… Which leads to #3
- Be prepared to make decisions quickly. One of the reasons I tell you #1 (Look at a lot of properties) is so that when you find a good home you can jump on an offer and not be stuck in indecisive mode. We have lucked out on a number of properties because we came in quickly with a fair offer. Our friends did too! Pro Tip: Have that pre-approved mortgage letter. It makes your offer much more attractive, plus it is a lot less worrisome if you know you can afford the offer you are placing.
- If you have a buyers, agent look at properties they suggest too. We found our previous house at the suggestion of our buyers agent. We actually would not have looked at the house. We had seen it online and made the assumption that the seller was going to place another house next to it and subdivide the lot. Our buyers agent knew they had plans to sell the house with the larger lot instead of developing it further. We would have passed on our perfect house!
- Bidding wars are just not worth it. It is tempting to pony up some more cash when you have been on a lengthy search, already fallen in love with your house, and then someone is out-bidding you by a few 1000 dollars. Don’t, just don’t. There is always another house. Being house poor and paying at the very top of your market value is never a good way to start off your first home. Leave the bidding war to more experienced home buyers. Even then… I still give it a “don’t” no matter how experienced a buyer you may be.
- If you aren’t using a buyers agent make sure to have a reputable real estate lawyer. Actually make sure to have one of those no matter what. We had the worst time closing on our current house because the previous owner’s lawyer had been barred from practicing real estate law and there were title questions. Anyway, a good lawyer can help you put in a formal offer (Buyer’s agents can do this part in many states) and close on your home (Buyers agents can not do this part in many states). This process is not one you want to scrimp on as a first time home buyer. A house is probably the largest investment you are going to make, you are going to want to protect yourself throughout the process.
When Buying an Older Home or Any Home!
Great, now you have put in an offer and it has been accepted! Let the panic begin! Just kidding, don’t panic but do move fast. Hopefully, you have set a certain due diligence period to check out the house and back out of the offer if you found something cray, cray. If you haven’t, well then, you probably didn’t pay attention to #6 from above. Tsk, Tsk.
If you are a first time home buyer we must stress the importance of spending a little extra cash and getting an excellent home inspector. We have a great home inspector that we recommend. When he is done you basically end up with a 100 page manual and a 2 hour walk through that explains everything about your house. Not all home inspectors are the same! Ask around for recommendations and do not just use the first person on your real estate agent’s list. But Do book this person ASAP. Your due diligence period is likely small and home inspectors, contractors, surveyors, etc can often be booked up.
Once you have your home inspection use that to negotiate repairs. Sometimes this works and sometimes it does not.
Our friends were able to get plumbing fixed and some money at closing. I have been able to negotiate money back for new electric. Sometimes, in the case of our current house, you are getting a cheap price so as NOT to negotiate repairs. It never hurts to ask, but you may not get anything. At that point you can make the informed decision if the work/DIY is something you are interested and capable of completing or if you need to accept the loss of a little money and move onto another property.
ALWAYS remember that cutting a loss of a few hundred dollars is better than being saddled with a house you are unhappy with and/or is so costly to repair you end up being house poor just to keep the lights and water on. That being said make sure to do the following as soon as you have an accepted offer.
- Notify your mortgage company: The time it takes to close a mortgage is really quite insane. Do yourself a favor and get the process moving as quickly as possible.
- Once you notify your mortgage company they will set up an appraisal. If for any reason, you think you might be backing out of the property have them hold the appraisal to you have the home inspection. BUT NOTE: holding the appraisal can hold up closing. Again, this seems like it shouldn’t be a big thing, but the bank ordering the appraisal to the actual time of completion can be pretty lengthy. You are not going to be able to close that mortgage till the bank makes sure you have enough equity to cover the purchase price.
- Home Inspection: Book one ASAP. If you really aren’t going to hire a professional at least get your home-knowledgeable friends to do a walk through and make a list of everything you want to repair upfront plus everything that may need fixing in the first few years (so you can start saving).
- Survey: Any time there might be property line questions it is worth it to get a fresh survey. You may need to ask for them to mark the line if you are trying to notify the neighbors that the line is not exactly where they thought it might be.
- After your due diligence: Go ahead and call cable/internet, power, water, and electric companies. I made this rookie mistake and forgot to book the internet provider till almost at closing. They were not able to come for 2 weeks! Talk about eating through data on our phones.
- Keep in contact with all parties. While in a perfect world the various home inspectors, real estate agents, lawyers, mortgage companies etc would be doing their job it never hurts to check in. You don’t have to be obnoxious, but a simple email or call to ask if they need anything else is a good reminder for them to pick up your file.
Great You Made It!
Great you made it…Almost! You haven’t closed yet. If you have gotten through all the hurdles it is time to start pestering your laywer for the HUD-1 Settlement Statement. Depending on your state, they have to produce this a certain number of days prior to closing. I know, I know, there are lots of numbers and columns.
Look Over your HUD-1 ASAP!
I am pretty sure I have never had a pre-closing HUD where it was correct. You need to diligently contact the laywer, mortgage company, real estate agent, or any one else to correct any mistakes. The HUD is the be all and end all of closing and if it isn’t right you may delay closing and/or spend an entire flipping day in a lawyer’s office (true story I even left for a lunch break).
Once your HUD is settled the only thing left to do is go get a cashiers check for closing from the bank, and bring your ID to closing. You will be asked to sign or initial about 1000 documents. It is impossible to read every piece of it (which is why we suggest the reputable lawyer), but make certain to pay attention to the high points. You want to verify the title information, mortgage, etc matches what you have been discussing the whole time. Once you close you should get some keys and be good to go! We had a few closings that ran late and were registered at the court house till the next day. You will want to consult that lawyer on whether you should move in or remain out of the house at that time.
But anyway once you have closed you are now a HOME OWNER! Enjoy!
And if you want to grow some insta-equity we will be going over tips shortly on quick fixes that add a lot of equity to your home for little upfront cost!