Wifeys & Gents,
FACT: I do not know the 1st thing about real estate or what steps it takes to purchase a new home.
Now that we have that out of the way, please spend the next 10-15 minutes reading my thoughts on home buying…
All jokes aside, ever since I got married, the 2nd most common question I get from acquaintances (and sometimes friends/family) is always about buying a house! Frankly, I sometimes wonder if the people asking actually care about the answer or if they are just programmed to ask because (after kids) that’s the 1st place their mind goes when they think about matrimony. Regardless of the reason, the reality is that most people in serious, long-term relationships (married or not) typically aim to cohabitate at some point in their lives. Even if they start out in their parents’ basement, presumably, the goal is to one day make it into their dream house. For those of us who are lucky enough to be able to jump right into their forever home, congratulations! However, for most of us, the road to acquiring our ideal living space takes time, money, and dedication.
If you’re anything like me and my husband, you might not be in a rush to buy a house. For reasons, I am not qualified to get into right now, the idea of purchasing a house is really daunting and, from our perspective, unnecessary. Still, there will come a time when we will be ready to take the plunge and purchase our 1st house, and since I am a compulsive planner, I think it’s extremely important that all couples have a very very basic road map for how their home-buying journey can begin.
Since we’ve already established that I am no expert, please remember to do your own research and sit down with a reliable, experienced, and trustworthy realtor before rushing into anything or signing on the dotted line. These thoughts are based purely on (1) my own logic and (2) observations of others who have been down this road before.
So here’s my 2 cents…
- Have A Goal & Make a Plan
I feel like this advice is usable in almost every situation, which is why it’s my #1 tip. Buying a house, as you’ll quickly learn, is a HUGE undertaking. Regardless of your financial situation, it is still really important to have a goal in mind and know what action steps you’re going to take in order to achieve that goal. Something as simple as “We want to be in our new home by January 2019” is a great place to start. Once you know the destination, you can carefully map out the journey to ensure that you get all of what you need and most of what you want.
I would also recommend making a list of “must haves” when thinking about the kind of house you want and getting on the same page about size, location, and price range. This will make goal setting much easier and allow both of you to contribute to the action steps in a collaborative way.
- Crunch the Numbers
Many might disagree with me, but I truly believe that BUYING a house isn’t the best or most feasible path for everyone. Please remember that it’s completely OK to be uninterested in buying a house at all. Maybe you’re a traveler and can’t see yourself planting roots in one place? Maybe you feel like the amount of money it takes isn’t worth the investment? Either way, it is critical for couples to really do the research to determine if the cost of a mortgage is either equal to or more affordable than rent.
For those who disagree, I realize that, most of the time, your monthly mortgage payments turn out to be less than the average cost of rent for your geographical location. Moreover, I am familiar with the concept that owning a home is a long-term investment that many see as essential!
I’m still going to push back here and challenge anyone who might be on the fence to conduct the fairest assessment of the numbers as possible. Here’s the way I see it… if we can all agree that it is a mistake to rush into a relationship or marriage before we’re ready or that it’s never a good idea to do things that we don’t really want to do (especially if we feel pressure or are having genuine 2nd thoughts), then it makes sense to take a long hard look at the numbers and make the most informed decision possible before buying a whole house.
I would NEVER advise anyone not to buy a house. My husband and I can’t wait to own a home someday in the future, but I will advise that you don’t buy one until you’re both sure you are ready and able. Be patient and take the time to make your choice.
- Plan for A Loss of Income (i.e. Build A Strong Nest Egg)
What’s the way that saying goes?
“When you least expect it, EXPECT IT!”
Life changes so quickly and in the blink of an eye, things can switch up for better or worse. While most of the time we can plan for progress, growth, and positive change, sometimes things happen that can throw everything off and crack the foundation we once thought we could rely on. We’ve all heard the stories about people that purchased homes and, shortly after, suffered from layoffs/downsizing, expensive medical bills, or any number of significant/unexpected financial losses. The fact is, there is never a way to truly be prepared for tragedy or the emotional toll that it can take on a couple or family. However, there is a solution that can go a long way in alleviating some of the pressure:
As my husband’s father would say “you must save”.
I’m not saying that it is necessary to have $100,000 in the bank before embarking on a home buying journey. What I’m saying is that (based on your income and expenses) you should aim to have at least 3-6 months’ worth of finances socked away in the event that something happens to prevent you from working and paying your bills.
For example, if your household income is $60,000 a year and you spend $2500 a month on your mortgage, bills, food, etc, you should try to have between $7500-15,000 saved up. While this is going to be a lot harder than you might be prepared for, believe me, it’s worth it! It won’t save you from suffering any damages or loss, but having the ability to keep up your lifestyle while you recover from an unforeseen event can be the difference between “making a few cutbacks” to get back on your feet and going into foreclosure on your new home. Having a nest egg provides a wonderful sense of security for your family. There is a comfort in knowing that even if the worst happens, you have something to fall back on while coming up with a plan.
Even if you’re certain that nothing could possibly go wrong when buying your house, PLEASE consider having (relative to your income) at least 1 months’ worth of funds socked away, just in case. You really shouldn’t consider ANY major, life-altering purchases without making sure there’s cushion to break a potential fall.
- Have Realistic Expectations & Lots of Patience
Any good financial planner will tell you that purchasing a home isn’t a process you want to force or rush. After figuring out your budget, researching the areas you’d be willing to live in, and getting a list of your “must haves” for a new home, the search can (sometimes) take a while. Moreover, even if you do find a home you really like, there is a chance that it’ll be out of your price range, a chance that you’ll be out bid, or a chance that you discover an unforgivable flaw about the house and/or neighborhood that you just can’t ignore. Be prepared to take your time and try not to settle for a place out of desperation or frustration. Your perfect home is out there and it really stinks to have buyer’s remorse when the stakes are so high.
Side note (but related): I got a sound piece of advice from an old friend when he bought his first house. He told me that one of the more humbling experiences when buying a house was realizing what was available in his price range. He got discouraged and annoyed, trying to purchase fancy houses that were well above his means.
“You’re only setting yourself up for disappointment doing this, and there is no sense ruining a relationship with your realtor because you’re being unreasonable and/or unrealistic about your options”.
I would go a step further to say that being realistic about this will make for a more harmonious experience with your partner as well.
- Make Sure You’re Financially in Sync
This is kind of a no-brainer but it merits a quick mention; before you and your partner think about buying a house, make sure you are on the same page about your financial position. Are you guys in debt? Do you both know exactly how much debt? Was your partner looking forward to buying a new car or going on a trip to Iceland this summer? Is one of you a reckless spender while the other is spendthrift and pennywise? Have you sat down and written out a budget? If you haven’t done so already, sit down with your partner and make sure you discuss your current finances as well as your hopes for your financial future. Thinking about having kids? Try to factor in how that expense might affect your ability to afford your dream home.
I know I’ve said this before, but one of the leading causes of divorce is disagreement about finances & money. When a long-term relationship struggles to get on the same page financially, it can mean devastation for your intimate, emotional connection.
Don’t let something that is supposed to be enjoyable become the cause of your romantic downfall!
Even if you think buying a house is a long long long way off, start thinking about a budget! Have a game plan to get out of debt and stick to it. And finally…
- Make Sure You’re Emotionally in Sync
If nothing else, please remember the reasons why you’re together and why you want to purchase a home in the first place. If your relationship is having significant problems, maybe now is not the time to make major purchases or life decisions? Check in with your partner to make sure that taking these new steps and making big changes is what you both really want to do. I know that the world moves fast, but believe me when I say you have lots of time to execute a solid plan that will lead you into your new house. When the going gets tough, remember that you are there for each other and working as team! Buying a house with someone is a huge commitment, so please make sure you’re communicating with your significant other to ensure everyone’s happiness with the choices being made. Listen to each other and don’t be afraid to speak your mind.
I know that finance and real-estate conversations might seem unimportant and/or irrelevant to a lot of you, especially my younger readers who are still out in these streets trying to find Mr. and/or Mrs. Right. Still, in an age where more of us are becoming lax about marriage and serious about our financial investments and opportunities, I think it’s an important topic to tackle from time to time. I think these tips can be applied in every situation, even for those of us that are single or wanting to make investments with friends and family.
Over the next few weeks, I promise to cover some more entertaining topics and (hopefully) post my very first VLOG (but don’t quote me on that last one…video is tough).
Until Next Time,
Carry on Wifeys!