I'm looking at buying my first home by the end of summer/fall. I am pre-approved for a loan and have a realtor I'd like to work with. There is a lot that comes with it, so I am looking for some advice on your experience being a homebuyer and owner.
Any house shopping tips?
In this process right now. I am super discouraged as the market moves really fast this time of year and especially in the Des Moines area. This isn't true for all homes, but those that fit our budget, are semi-upgraded, in decent neighborhoods, and aren't <1000 sq ft go very fast (Average of 3 days on market before an offer is accepted). If you are going to be having a family, consider the neighborhood and school district your children will be growing up in. I don't have to think too much about school district because we both teach and Iowa is an open enroll state so I could take my children to another school, but that presents problems of its own. (Do I want to drive 30-45 minutes every time my child wants to go to a friend's house?)
USDA loan programs are pretty sweet for first time home buyers. Something like a 3.6 interest rate with zero down, and there are non-forgivable grant programs to help with closing costs if you need it. The drawback is that the home has to be in a "rural" community. For reference, Indianola is USDA eligible, Des Moines is not. While considering a down payment, DO NOT empty your savings. You always want to keep an "oh ****" fund handy and chances are you will have things to get/repair in the first few months of owning a home. PMI (insurance for lenders) is a *****. Chances are you don't have 20% to put down on your first home. Don't kill yourself over it. Try to pay it down and then ask your lender to get rid of PMI once you have 20% equity on the mortgage. They don't have to get rid of it until you have 22% equity.
How long a house has been on the market will tell you a lot about what kind of offer you want to make. However, if a house is new on the market, decently priced, upgraded, and >1200 sq ft, it could go fast. So be take some time NOW to decide what kind of homes you like and what you want. So you spend less time getting into one that has you saying "this is it" and you are then ready to make an offer, potentially beating other buyer's the punch. Once every closes and is finished, understand that you are 100% responsible for this home. If possible, take your HVAC friend or plumber/electrician friend when you look at homes. They will see things you won't. And don't always trust the inspection.
If you buy a home with a home warranty, CALL YOU HOME WARRANTY FIRST IF ANYTHING GOES WRONG. Read the fine print as well. My buddy bought a house and had a problem with how rainwater came off his roof. This caused water to come in through the basement window and drip behind some paneling resulting in a mold problem. The home warranty and his insurance wouldn't cover it. He discovered this within a month of buying the home. He didn't call his home warranty to have it checked out, so he was on the hook for that. And the fine print didn't cover this instance for some bull **** reason (water running off the driveway or basement damage as a result of poor drainage weren't covered or something like that). The inspector also completely missed this issue. So just be diligent.
All of this said, it is a huge investment. Take your time. Make a budget that you can plug in monthly house payment (including pmi, insurance, taxes, etc.) so you will have an idea of what you will be paying. We are approved for up to $250,000 (both of us are teachers), but we set our max at $175,000 because otherwise we risk being "house poor". No one else will be responsible for your purchase, so be mindful of what you are getting into. If you are buying with your spouse, understand what each of you are going to be focused on. My wife is focused on potential and livability while I am focused on the finances, what kind of work it might take (snow removal, yard work, house projects), and long term family planning. It is easy to get upset with one another/stressed in this process. So be patient, talk, and be kind to one another. This is an exciting time, but it can easily become very stressful and entail some heartache.
Last piece of advice, if you have friends that are plumbers, electricians, and HVAC people ask them questions on things to look for and how to address certain concerns or projects. These people can save you a lot of stress, and maybe a few bucks too My best friend does HVAC for a living, and while I would never ask him to work for me for free, he is able to quote prices and give advice any time of day. I have another friend who does contract work and he has offered to help me with landscaping, trim work, drywall, etc. if I give free music lessons to his daughter. Utilize your friends and families expertise while also giving your own talents to them so you aren't taking advantage of them. It is also a nice way to spend time together when life gets busy.
I am a first time home buyer, but having spent the last 2 months working through this process, this is what I have learned so far. If I said anything that is contradictory to what more experienced buyers say, I would defer judgement to them. Experienced home buyers, please reply and let me know if I am mistaken on anything in this post. My wife's folks live in Arizona and aren't able to help much and my folks aren't super involved. So we sometimes feel like we are on our own.
Edit: Sorry for the novel.