My Long and Winding Road to Homeownership, Part 1

If you’ve been reading my blog for any length of time, then you know that I’ve been looking for a home. I’m not yet officially a homeowner, but I signed my life away yesterday, so it’s time to share the long and sometimes torturous story of how that happened.

Deciding to Become a Homeowner

My husband and I thought it would be a long time before we could afford a home. Then the market turned. Condos seemed to drift within reach. Then the market collapsed. Suddenly we were considering actual houses.

We started in 2007 by randomly visiting condos to get a feel for our taste. We only did it a couple times. In late 2007, we started to pay down debt so our debt to income ratio would be reasonable. In late 2008, we paid off a good chunk of debt and started working on the down payment. We also budgeted out what we thought we could afford at that time – a safe, conservative number, not a stretch number. We included future goals for our income, like childcare and retirement, in our budget.

Visiting Open Houses

In January, 2009, it was time to get serious. We started by visiting 3-6 open houses each Sunday for a month in different potential neighborhoods. This allowed us to see what was potentially available.

Tip: When visiting open houses, keep the listing sheets. Note what you did and didn’t like about the home. Flag those you really like as a guide for your agent when you hire one.

Speaking to a Mortgage Broker

Around this time, I also called a mortgage broker friend to get pre-approved. Rather than let him run our credit and see how much we could qualify for, I told him the monthly payment with taxes and insurance that we believed we could afford. I listed our income and debts and then he ran our credit to give us a max purchase price. We used this to guide our open house visits – there was no point in looking at homes we could never afford.

Hiring a Real Estate Agent

By March, we’d narrowed down our options and decided to get serious. Our initial goal was to buy by May. Ha! I interviewed a couple of real estate agents and chose one. I sent her the listings for the few houses we’d liked. She then pulled a few initial listings for us to go look at. She also had us get pre-approved with a bank that she’s worked with. If you’re looking at foreclosures, most banks want to see an approval from a bank rather than a broker.

Taking Detailed Notes about Potential Homes

We created a home-buying checklist that I’ll be posting shortly with detailed instructions. Our real estate agent said we were the most prepared buyers she’d ever seen. In addition to our checklist, we also brought a digital camera and a measuring tape. Interestingly, the types of homes we could look at changed drastically once we hired the agent. As time passed, larger homes also become available within our price range.

In my next post, I’ll review each of our offers and how we came to make them. Once we started working with an agent, it still took us 6 weeks to find a home worth making an offer on, and more than 3 months to actually get an offer accepted and go into escrow. That’s partly because the market completely dried up thanks to lender skittishness and foreclosure moratoriums. Nevertheless, we stuck it out and emerged victorious.

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