Personal Finance

Money at 30: Starting My (Potential) Home Buying Quest

A few weeks ago in my post about savings milestones and goals I mentioned that my wife and I were currently working on building up a down payment to maybe one day buy a house of our own. Over the years I have personally gone back in forth between obsessing over HGTV and being frightened by Lowe’s commercials, so this is about the closest I’ve been to seriously considering the prospect of owning a home. Still, from where I am now, it will be quite a journey to eventual escrow.

While I’m pouring over articles, listings, and financial statements in preparation for this far off goal, I thought I’d document my adventures just in case anyone cares to follow in my footsteps. In fact I should say up top that home buying is still a big deal and, for reasons too numerous to mention in one sentence, mortgages are hardly comparable to rent payments. But more on that as I present my notes from my (potential) home buying quest so far:

Zillow is my friend

As I mentioned in recent years my wife and I have developed quite an affection for HGTV — even if we seem to despise every person that ends up on House Hunters. While watching Jo and Chip fix up homes in Waco, Texas or tagging along as those awful people on House Hunters look at three options in their neck of the woods can be fun and perhaps even inspiring, sadly as of yet none of the shows that I’ve seen have set their sights on Springfield, Missouri. Because of this, sometimes it’s more exciting to hop online and see what types of homes are available in my actual area.

There are a few different sites that allow you to view home listings but my favorite overall is Zillow, which also happens to be one of (if not) the largest. Not only does the site allow me to look at homes directly surrounding my apartment that are on the market but also enables me to view the sales history of those and other similar homes. This feature is nice because sometimes I’m curious what a house that has everything I want went for even if it’s not available right now. Plus it’s awesome to look up your friends’ addresses and see how much they paid ;).

Another great thing about Zillow is that they’ll often list open houses as well. That hasn’t come in handy yet but maybe soon…

Just how “open” are these houses?

In the past few weekends alone there have been at least half a dozen open houses hosted within walking distance of our apartment. They tend to take place on Sunday afternoons when my wife and I are both free, so we’ve nearly gone to a few of them but have yet to follow through. So what’s holding us back? 

The purpose of open houses is to allow potential buyers to see the home without needing to set up appointments, deal with lockboxes, etc. Additionally it stands to reason that these events are intended to be more casual, allowing people to come and get a look at a house without as much pressure as they might feel had they arranged a special showing. The problem is that, even with that caveat, I can’t help but feel weird knowing that there is no way I could put an offer on a home at this point. 

Part of me realizes that’s silly considering it is an “open house” but it’s still in the back of my mind each time I see a listing. Plus there’s always the concern that we might find a home that’s perfect for us only to have to turn it down — why would we inflict such torture on ourselves? Regardless of these concerns I’m sure we will make it to an open house sometime in the relatively near future and I’ll be sure to let you all know when we do.

Saving, saving, saving… and more saving

If we were to gather up all of our savings (excluding retirement accounts) in an effort to scrounge up a 20% down payment, our new home would still be a fixer upper to say the least. That is to say that we have a long way to go before we’re there but we are making strides. For one that Discover Bank savings account I wrote about not too long ago has been seeing plenty of deposits from yours truly and I’m quite proud of that. Unfortunately, the more I learn about home buying, the more I realize how far off we really are. 

Not only do we need to concern ourselves with having 20% of the purchase price to put down — while still keeping our emergency fund and other savings intact, of course — but then there are also closing costs to consider. Unless we somehow bamboozle (I’m pretty sure that’s a legal term for “work into the contract”) the seller into paying those for us, those could apparently cost us another 2 to 5% of the purchase price. Ouch. And this is to say nothing of the additional costs we might incur for remodeling, appliances, and any happenstances that can occur when you live in a part of the country where rain likes to fall for days on end and tornado sirens are an all too visible reminder of the potential threat Mother Nature poses. 

Needless to say, pondering all of these expenses has been a bit of a buzzkill. While comparing what we could pay for a mortgage — even a 15 year one — to what we pay in rent makes owning seem like a no-brainer sometimes, the reality of everything that is involved in buying a home comes to spoil the fun. On the plus side, at least we realize this all now.

Owning a home simultaneous excites and terrifies me but perhaps that’s how it should be. Yes you should be excited about buying a house before you actually buy one, but you should also be aware of everything the goes with it. That’s why, as disappointing as it can be sometimes, I’m glad I’m taking my time, doing my research, and preparing to do things the right way. And of course I’ll be sure to keep you updated on my progress along the way. 

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