Personal Finance
Resuming My (Potential) Home Buying Quest – 7 Years Later
Seven years ago, I wrote an article highlighting the steps we were taking as we began looking at potentially buying a home. Well, since then, we have had a few more rounds of regularly sending each other Zillow listings but haven’t taken any further steps. Incidentally, just a few weeks ago, I wrote another post where I lamented that, perhaps, we had waited too long and missed our chance to be homeowners. But, life is funny.
Cut to a couple of weeks ago when we randomly revitalized our quest. Unlike past bouts with the Zillow bug, this infection resulted in us taking some major steps forward. In other words: it’s time for an update.
Our Slow March Toward Potential Homeownership
Visiting our first open house
The weekend before last, on an otherwise lazy Sunday, we randomly decided to hit up an open house that we noticed on Zillow. It wasn’t that the house being shown was all the interesting to us (it was okay but not something we were that excited about) but we figured it was finally time to see what the experience of visiting an open house was like. As it turns out, it was pretty simple albeit slightly awkward.
When we walked in, the agent showing the place was with other people so we made our way around real quick. However, as we were about done, she finished up and came to talk to us. One of the first questions she asked was “Do you have an agent you’re working with.” When we said “no,” her response was “Well, you do now.”
Which brings me to update number two:
Finding an agent
I suppose “finding” is a bit of a misnomer here as we basically stumbled into having one. After she introduced herself at the open house, she had us write down some of the things we were looking for in a house and also collected our contact info. The next day, she got us set up in her own search portal (like Zillow but more official-looking). From there, we’ve been able to let her know if there are any houses we’d like to check out in person. She also helped us navigate another aspect of the home buying process we’ll get to in a moment.
As of right now, we haven’t signed anything officially noting that she’s our exclusive buyer’s agent but we plan on doing so if asked. Even with our likely long time horizon and relatively low budget, she’s been super helpful and friendly. It really makes the whole experience far less frightening.
Touring more houses and areas
Following our open house experience, one week later, we decided to go check out some other houses with our new realtor in tow. Since we’re not quite ready to buy yet, these excursions were more about seeing what’s available in our price range, discovering what neighborhoods we do and don’t like, and perhaps getting ideas for things we could do to our place once we buy one.
I have to say that, overall, this process has been fairly encouraging. This is to say that after getting a sense of the market, we’re fairly confident that we’ll (eventually) be able to find what we’re looking for. In classic House Hunters fashion, we may need to compromise on at least one of the things on our wish list — after all, it’s hard to find a home with two floors but a small footprint — but it’s looking pretty good so far.
Getting mortgage pre-approval (hopefully)
Something I alluded to earlier is that our agent also put us in touch with a mortgage broker. In fact, we sent him plenty of relevant financial documentation and authorized a soft pull of our credit so that we could get pre-approved for a mortgage. This means that, if/when we’re ready to make an offer on a home, the seller will have greater confidence that the deal will be able to close. By the way, there’s apparently a difference between “pre-qualified” and “pre-approved.” We’re aiming for the latter, which is why all of the actual, documented info is required, whereas pre-qualification is usually based on self-supplied data. The more you know.
With that said, given our unique self-employment situation, gaining that pre-approval has been slightly more challenging. I’ve always heard that this was the case with self-employment, but now I’m really starting to understand why. For example, while it’s advantageous for us to deduct as many business expenses as possible for tax purposes, it turns out that this lowered income is what lenders are looking at. Luckily, after talking to our lender and explaining certain aspects of our situation, he anticipates that we should be okay — it will just take some more time as he runs it up the chain. Seeing as we’re in no rush, this isn’t a problem for us. Meanwhile, it also helps that our credit is solid, so there are no real worries there.
Overall, this pre-approval process has definitely been educational and really isn’t as stressful as I fear I’ve made it sound. In any case, while we can keep looking at houses in the meantime, we may need to wait just a bit longer to get the green light.
Even though the current mortgage rates compared to what we could have had mere months ago do continue to frustrate me, the past few weeks have shown me that homeownership may not be as far out of reach as I feared. Furthermore, while the type of home we want may not be the standard, it does exist — and exists in our general area. All of this has been encouraging and we’ve enjoyed the process so far.
At the same time, while we’ve really liked a couple of houses we’ve seen, we’re not ready to make an offer yet — especially since our apartment lease runs through next June. So, despite taking some major steps forward, we still have quite a ways to go before we actually join the ranks of homeowners (after being a lifelong renter). In the meantime, I’ll be sure to keep you all updated on our progress and share everything I learn along the way.
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