Flirting with the Idea of Buying a House?
My first piece of advice right off the bat is, GO FOR IT! If you are curious about buying, you should look into it. When we first started thinking about it I seriously thought it would be like a maybe in 10 years when we are real adults type of thing. It ended up taking us about two years from the time we started thinking about buying a house to get everything in order and actually find a place that we liked and accepted our offer. It was a mega roller coaster of emotions and stress along the way, but I can confirm that the painful process is all worth it in the end.
We started thinking about buying a house for a number of reasons. We were living in a studio in the Tenderloin neighborhood of San Francisco and we new we would eventually need to expand. We also knew that there was a chance we would get evicted since we had lived in the apartment for 5 years and the new Twitter building opened just blocks away, which inevitably meant immanent techie invasion. The median rent in SF was at a record high and we were afraid we wouldn't be able to afford to rent a new place if we got kicked out. We both agreed that we are committed to living in the Bay Area for the foreseeable future since both of our families live near by and we both love our jobs. Our rent controlled studio was cheap, so we took the opportunity to really scrimp and save while we had the luxury to do so. Lastly, we were both itching to get started on some DIY projects!
We tried really really hard to find a way to stay in SF. We went to free counseling and informational meetings on home buying in SF, tried to apply for special programs for public school teachers, researched online, and looked into applying for below market rate condos. Unfortunately, we came to a point where we realized there is no way in hell we could ever afford to buy even a crappy studio in SF with the existing programs and support. Bummer number one. We then expanded our search and talked to some friends that had just bought in East Oakland. They gave us information for their bad ass realtor and we decided to go talk to her to see if us buying a house was even a realistic endeavor for us. Our realtor was AMAZING and talked us through all the info we needed to know. Her name is Kerri Naslund and I highly recommend her to anyone thinking about buying in the Bay Area! She gave us a realistic price range estimate and listened to our needs and concerns. We narrowed down the areas we could look in based on price point and proximity to public transportation. It was really important to us that we stay near public transportation since we both hoped to continue working in San Francisco. That left us with East Oakland and Richmond as our two areas of interest and affordability. Kerri was honest and blunt, but also optimistic. I would highly recommend talking to a realtor as one of your first steps since they know the market and can give you a realistic idea of what/where you can afford.
We spent about 10 months going to open house after open house every Sunday. We saw so many houses I can't even begin to keep them straight in my head. We bid on about 6 houses and got very close to some of them, but most of them we got beat out by all cash offers at $100,000 over asking. It was very crazy and very discouraging. Finally, in April of 2016 we saw a cute Mac Gregor house in Richmond just a 5 min bike from BART, 10 min bike from a new Ferry to SF in the works and we JUMPED on it. When I got the text from our realtor two days later saying that our offer had been accepted I almost barfed from the excitement of it all. Here are a couple pictures of our house as it was when we bought it.
It's been 1 year since we bought the house and already we've made quite a few changes! We hadn't planned on actually getting an offer accepted so soon, which explains why we also had a three week Eurotrip and our wedding planned in the same year. Woops! Even so, we've managed to slowly make the house our own in a short amount of time with a very limited budget. I'll make sure to keep updating our progress, the biggest hurdles so far have been finding enough furniture to fill all the space and keeping my wild renovation dreams to a minimum. We just started re-doing the backyard and are doing a lot of it ourselves. A post on that is coming up. Overall, I just feel so in love with our house and our neighborhood. We worked really hard to make this dream a reality, but I want more people to know that home ownership is attainable!
I thought a list of some quick tips might be useful for all you kids thinking about dipping your toes in the home buying game.
First Time Home Buyer Quick Tips
- Check your credit score, it really matters! If it is not as good as you want it there are many ways you can improve it over time. A quick google search will give you an idea.
- Start saving! You'll need at least 5% down payment and at least $15,000 on top of that for closing costs and taxes that you have to pay in cash. I made it so my bank automatically put a portion of my paycheck into my savings account each month which made it easy to pretend that the money never even existed.
- Find a realtor you like and trust. Ask some friends or people you know that have recently bought in the area. Don't be shy in asking to meet with several realtors and deciding which one feels like a good fit.
- Brush up on your realty vocabulary. That stuff can get real confusing real fast. Its almost like a whole separate language you have to know.
- Come up with a list of wants and a list of needs for your home. You may need to trim your list of needs way down depending on the market you are trying to buy in.
- Come up with a realistic amount of money you can spend on housing each month. We did this early on which really helped keep our searches realistic. It can be so easy to marvel over the beautiful homes that are just $100,00 above your price range, but don't do it! Also, keep in mind that mortgage companies are businesses. The larger the mortgage the more money they make! We got approved for nearly double the amount we can actually afford when we take into account our lifestyle choices and monthly expenses.
- Download the Redfin app, but make sure to create your search with your location and price limits. In my experience Trulia is not a trustworthy source. Redfin is the bomb.
Good luck and may you only cry from home heartbreak a handful of times.