Before I launch into it, I want to start off by saying that, as with basically everything on this blog, these opinions are mine and should be taken as such. While I aim to hopefully educate/inspire/be a forewarning of what’s to come, please bear in mind that nothing works for everyone, and if you find yourself disagreeing with me, you’re probably right because only you know your situation best.
Phew, with that out of the way, I’m excited to be bringing you this post on everything I’ve learned since we bought our house (in the middle of the pandemic) almost a year ago! Be forewarned: this is a doozy of a read, so I’m also taking you on a little throwback tour with some of my favorite photos of our home.
- It is no secret that the housing market is the hottest thing since sliced bread in the U.S. right now. Unless you live in a major city (ie. NYC, San Francisco, etc.), you’re probably feeling the effects of too little housing for too many people who swore of suburban life for years before the pandemic uprooted life as we knew it.
- If you’re able to wait and don’t need to move right now, I would suggest waiting until, at least, September, to seriously dig into your house hunt. Families with children will want to settle down and be eager to move before the school year starts, so this time of year is particularly flooded with buyers.
- *I am somewhat of the opinion that this housing market is too hot to last for eons especially since, in certain parts of the country (ie. Connecticut), the housing market was pretty freaking depressed before everyone fled the cities. Again, this is my opinion only, so if the housing market continuously doubles over the next 10 years, please don’t hunt me down.
- If you’re able to wait and don’t need to move right now, I would suggest waiting until, at least, September, to seriously dig into your house hunt. Families with children will want to settle down and be eager to move before the school year starts, so this time of year is particularly flooded with buyers.
- Don’t have time to wait? S*** happens and there’s a lot of people who need to move right now. If you find yourself getting into a bidding war, first find out from your realtor if escalation clauses are common in your area. These clauses are addendums onto your offer as a buyer that allow you to escalate your offer a certain amount above the next highest bidder to a certain point.
- For example: You put in an offer of $350,000 on a house that has multiple offers. Your escalation clause indicates that you will offer $3000 above the next highest offer up to a max of $375,000. The next highest bid is $360,000. Your offer is now automatically $363,000 and now the highest bid. You (hopefully) win the bidding war and go under contract.
- Unfortunately, all real estate markets are relative and this is not practiced in all areas. For example, this is a common practice in the Greater Philadelphia region (where I grew up), but not in Fairfield County, Connecticut, where we currently live. If it’s not practiced in your area, and you truly want the house, put in your absolute highest and max when there is a multiple offer scenario without trying to guess what a “reasonable” high offer looks like. Sometimes you just need to blow the competition out of the water because so many houses are going for 10% or more above ask, so do what you need to do to stay competitive.
- Many buyers these days are waiving home inspection, mortgage, and appraisal contingencies. Out of these three, I would say the least important to me is the appraisal contingency. I’m really not interested in what an arbitrary third party individual has to say about their perceived value of my home since I believe the market regulates itself, so this, to me, is the least essential. Keep in mind that if the house you’re buying is appraised at less than the value of what you’re paying (ie. The house is appraised at $350k, but you’re accepted offer is $363k), you will likely have to make up for the cash difference yourself at closing since the bank won’t give you a loan against that portion, but hopefully it won’t be enough of a spread to be a dealbreaker for you.
- The home inspection is fairly important to me, however, this is the most appealing contingency for buyers to waive from the seller’s viewpoint since it means you won’t be haggling with them over repair costs. If you have a friend or family member that knows what they are looking at with real estate, try and bring them with you to view the house to see if they see any potential major issues that would cost big dollars to fix and if they think it’s a somewhat safe bet to waive the home inspection. After many years of flipping houses and owning rental real estate, I’ve learned that there are very few things that can’t be fixed in a house, so unless there are major foundation issues (which can still be fixed, albeit for a hefty price) or the land is eroding away (which can’t be fixed), I have a very short list of deal breakers in buying real estate.
- There are extremely few instances in which I would suggest waiving the mortgage contingency (ie. You have the cash to put for the house upfront if you can’t get a mortgage). You never want to put yourself in a position where you lose your deposit money because the bank wouldn’t give you the loan.
- Got the house? Congratulations! You’re under contract and, assuming you’re getting a home inspection, here are some of my under-the-radar tips to be an active participant in your inspection day of.
- Buy a moisture meter and use it on the sheetrock under every window (yes, every window) and on the ceilings that are directly below any plumbing. This $40 tool will be able to tell you if there are any active leaks from the two most common areas. Having this would have prepared us for the costly double window leak in our house that our home inspector didn’t catch.
- Speaking of water, fill up every single tub the whole way past the overflow valve during the inspection. Make sure the water is only exiting through the proper channels. The overflow valve was improperly installed in our upstairs bathroom and only leaked when the tub was filled up. We discovered this 6 months in and, while it was a relatively simple fix, it was something that could have been taken care of before closing.
- I highly suggest hiring a reputable drain/sewer company to video cam your main sewer line during the inspection. For an extra couple of hundred dollars, you’ll get peace of mind that your sewer line isn’t damaged to the point where you’ll need to spend tens of thousands of dollars on digging up and replacing the whole thing shortly after you move in (we learned this the hard way). If it is damaged, you can negotiate with the sellers for a credit or to have it fixed before you move in.
- Along that vein, make sure you add sewer and water line protection onto your homeowner’s insurance policy. Thankfully, we had a great insurance agent who advised that we should pay the nominal extra annual fee for this, and ultimately it ended up saving us thousands of dollars when the time came to file the claim. Replacing the sewer was still a painful process, but made less painful by the fact that we weren’t coming completely out of pocket for it.
- Don’t sweat the small stuff. There is something wrong with every house. Literally. Every. Single. House. The goal of a home inspection is so you can be aware of what is wrong with your particular house, not to prove that it’s flawless. After having dealt with many great and not-so-great home inspectors, I’ve found that some inspectors harp on things that don’t matter AT ALL while missing the big picture. An inspector once notified us of a small, dime-sized amount of paint peeling in the bathroom but neglected to find that the bathtub had a serious leak in it if he had just taken the time to fill it up. Don’t automatically assume that because it’s listed on your home inspection as a problem, it actually needs to be seriously addressed.
- Lastly, for those of you curious as to what my shortlist of deal breakers are, I thought it’d be helpful for me to list out what would keep me from buying a house (or even making an offer):
- Location, location, location. I don’t care if it’s a 6000 square foot palace listed for a total bargain. If it’s located on a piece of property that doesn’t have a normal backyard (ie. It’s built into a hill or has some sort of wetland in the back), it’s a deal breaker for me. I learned this the hard way when we flipped a home that was beautifully renovated, but had no backyard because it was built into a hillside. We ended up selling the house at a steep discount and made very little return for our efforts.
- You can renovate an ugly kitchen or bathroom, but you physically cannot change the location of your home, so it will greatly affect the value of the house over time if you buy real estate on an atypical piece of land.
- In the same vein as location, I will not buy a house listed as on “wetland.” Your town will have a list of designated properties on wetlands and these are what they sound like – they are on land that is wet and you will spend a pretty penny continuously battling water as well as purchasing costly flood insurance. Make sure to ask your realtor if the home is located on wetland and if it is, think twice.
- Foundation issues: While these can be fixed, they are generally so expensive to do so that it doesn’t make sense unless I’m getting the house for a steep discount. These are fairly easy to spot. Go into the basement of the house and see if there is any heavy cracking along the foundation walls if the basement is unfinished. If the basement is finished, or there is no basement at all, major foundation issues can also be evident in finished drywall. While some minor cracking around doorways and windows is normal as settlement occurs in all homes (the ground shifts/moves over time everywhere), major foundation issues are obvious when the cracks are running parallel to ground and deeper than hairline cracks on the drywall.
- Location, location, location. I don’t care if it’s a 6000 square foot palace listed for a total bargain. If it’s located on a piece of property that doesn’t have a normal backyard (ie. It’s built into a hill or has some sort of wetland in the back), it’s a deal breaker for me. I learned this the hard way when we flipped a home that was beautifully renovated, but had no backyard because it was built into a hillside. We ended up selling the house at a steep discount and made very little return for our efforts.
If you made it all the way through this post, congratulations, and I hope I didn’t bore or scare you to death from buying a house. There were so many things we had to learn the hard way and my hope is that these tips save you from making the same rookie moves as we did. Ultimately, I think of buying a house much like dating or finding your person – if it’s meant to be, it will be. The house you end up in will be the house for you, even if it takes you a little longer to find it.
xx,
Anna
“What is for you will not pass you by.”