Insider Tips to Buying A House From A Realtor®

Hi! It’s true. I am a REALTOR® and I bought my first house, finally. I’m 35 years old, and despite that people are buying later in life, 35 is a bit later than most. Regardless, I did it, and I’m here to share everything that I learned. Hopefully, these insider tips to buying a house from a REALTOR®, like me will help you buy a house too!

First, I feel that a bit of background information is important. My partner and I have been together for 4 years, and we were living together before we bought our first home. Up until a few years ago, neither of us even wanted to own a home. However, as a REALTOR®, I watched the market shift in the favor of demolishing older buildings that were affordable to build luxury cookie cutter towers that were expensive. Really expensive. So much so, that I had many older clients on fixed incomes forced out of the apartment they had lived in for 30 years and unable to afford the new product hitting the market. My (our) future security suddenly became very important to me. My partner and I talked about it at length, and it was decided that we would buy a home to set ourselves up for later in life. Sure, we might sell this home and purchase something bigger and better, but we don’t have to. This home can be the home we pay off and live in when we’re old and relying on savings to survive.

Ok, ok, that’s enough about us, and the why. You want to know HOW, and if anything went wrong, right? Alright, I’ll tell you!

We Started Early

in 2016, we decided that we would purchase at the end of 2017. Rather than wait until August or September of 2017 to research loan options and homes, we started in January of 2017. At that time, We reached out to my favorite lender (Chad Helmcamp of Legacy Mutual Mortgage) to evaluate our financial health. We sent over bank statements, tax returns, and had our credit run. We did this MONTHS before we were planning to buy. Thank goodness we did, too! I had a couple blemishes on my credit to correct, and making those improvements raised my score 50 points over 9 months! That 50 points reduced our interest rate by a quarter of a percent!

I Paid A Bill I Shouldn’t Have

I thought it was a good idea to pay off my car, and who wouldn’t? Paying off the balance on a car reduces the debt to income (DTI) ratio. However, the installment loan on my car was only 13 months old and paying it off so early resulted in closing an account and decreasing the overall age of my credit history.

We Cut Back on Credit Card Use

We’re pretty good about paying our credit cards off in full every month, but even still we cut back on my usage. The goal was to keep our utilization rate low, and get in the habit of spending less. After all, there’s going to be an adjustment period when we close on the home and realize there’s more to our bills than just “rent.”

We Were Realistic About What We Wanted

A lot of people make a list of features they want to have in their house. We made two lists; one list was Must Haves and the other was Wishes for our house. This worked out really well because it allowed to us stop looking at and for EVERYTHING, and focus on homes that offered what we really needed. We even re-evaluated our list after viewing a few homes, and made changes.

We Waited to Shop

As a REALTOR®, I knew if we started shopping, we would find a home that we loved, and we would buy it. I know this from experience! Buying a home months before you plan to results in rent AND a mortgage payment, and we were not interested in that. Plus, houses cost more in the summer than in the winter.

We Were Flexible on Location

We live in Houston, TX, and it’s big! We knew that we wanted to stay in Central Houston, but we couldn’t afford to stay in our beloved Montrose. So, we opened up to areas that were growing (but not quite developed) allowing us to stay in the city,  and avoid the dreaded suburbs. Then, we got the crazy idea to draw the search radius just a little bit bigger, and our dream home popped up in a neighborhood we weren’t even considering!

We Bought All The Insurance

This is Houston, y’all! The city of 500 and 1000 year floods. Even though our home is not in the flood plain, we still purchased flood insurance. You can’t be too safe. We even bought Survey Coverage with the title policy; surveyors are humans and they can make mistakes. We asked every possible insurance question, and didn’t try to cut corners.

We Didn’t Get Emotional

Everyone wants a deal, right? Sure! At the end of the day, a home will sell for what it’s worth. I did my research and determined what the home was worth in current market conditions, and also how much it was worth to us. These numbers were different; it was worth $5,000 more to us than the market value. So, we made an offer below market value knowing good and well that we would negotiate up to $5000 over the market value. Knowing our target price and maximum price allowed us to calmly negotiate terms without being taken advantage of.

We Had A Home Inspection

Of course we did! We contacted Southern Star Inspections because the owner, Travis Kepp had years of experience in the home building industry before becoming a home inspector. Even if the home is in great condition, knowing about possible problems is helpful. Knowing the age of the roof and the appliances gives you an idea of when you may need to repair these items, and allows you to save for that day. If there are problems, you can negotiate repairs with the seller. We were fortunate enough to buy a home that was well cared for, and there was nothing seriously problematic. So, we requested that the sellers address a few maintenance items before moving out.

We DID NOT Make Any Large Purchases

This is for real! We were under contract during Thanksgiving and wanted nothing more than to take advantage of Black Friday sales for Christmas shopping. Unfortunately, large purchases before closing can result in less money for closing, a higher DTI, or a higher utilization ratio on your credit cards. Any of these can result in your interest rate going up right before closing, or worse, you no longer qualify to buy the house. So, we waited it out, and bought Christmas gifts just after closing. We may have paid more for the gifts, but we saved a lot on our home with the lower interest rate!

At the end of the day, I feel like because we had a plan, the process was very smooth for us. We started early to prepare our finances, we knew what we wanted in a home, but remained flexible, and we didn’t get emotional. All of this resulted in an on-time closing with no surprises. When you’re ready to buy your first home, I would love to help you navigate the process. Call, text, or email any time!