As you can tell from the title of this blog post…we bought our first home! We’re moving at the end of November. Don’t worry, I’ll get into ALL the gory details, but what I really wanted to do today is whip up a post packed with advice for first time home buyers. Because wow did we learn a lot throughout this process I’m dying to share.
Our story.
Why we decided to buy.
I think it was some time in July or August, my husband and I were taking one of our daily walks. We rent an apartment in the Haight-Ashbury neighborhood of San Francisco and love taking long walks in Golden Gate Park. We were contemplating when we thought we’d maybe want to start conversations about family planning…and then realized we’d probably want to find a more permanent home first.
And that was sort of that! We honestly intended to “casually” enter the market and learned pretty quickly, there’s no such thing as “casual.” This market moves FAST – if you like a home, you’d better be ready to pounce (more on that later). So “casual” quickly got thrown out the window.
Where we’re moving.
I moved to San Francisco back in 2011 and my husband has been in the city even longer. Our entire lives are here, so we knew we’d want to stay close by. But we also knew maybe it was time to move just slightly out of the city to get way more for our money.
San Francisco ain’t cheap, ya know!
We started to narrow down our search and fell in love with Marin County. I mean…who doesn’t fall in love with Marin? A little more sunshine than the city. Under an hour drive to Napa. Beautiful parks, hikes, and bay views. I mean, Marin sort of has it all. Plus it means we can take the ferry into our offices when the time comes instead of having to take BART.
I am SO excited for this next step. Marin will open up a whole new kind of lifestyle to us that we just couldn’t have in the city. I think we’ll miss some of our favorite restaurants and maybe the ability to walk literally anywhere – but we’ll be gaining so much more. And as far as I can tell, Marin has plenty of good restaurants, too.
Finding a real estate agent.
After our walk and chat about entering the market, the first step was finding our real estate agent.
Lucky for me – my youngest brother is an agent! You can find his information here. He actually referred me to the agent we ended up using because we were out of area for him.
I really recommend selecting your agent by word of mouth review. Got friends that recently went through the buying process? Ask who they used!
You can also find great local agents by researching online. My biggest tip is to make sure to ask if they have experience with first time home buyers and walking first timers through the home buying process. Because it’s a CONFUSING process and if you don’t have an agent that’s got your back, it’s going to be incredibly tough.
You as a first time buyer will absolutely miss things. Having an agent that knows this means they can help fill in any gaps and really be your right hand person as you go along the journey.
The ins and outs of home tours.
Home tours can be SO fun. I’ll admit that when we went on our first tour, we really had no idea what we were even looking for.
Like was this supposed to be like wedding dress shopping? Was I supposed to wait for some “feeling” that this was our house? To be honest I barely had that feeling when buying my dress. Buying a wedding dress, picking a wedding venue, and buying a house are all examples of highly unromantic things to me personally – they’re big, expensive decisions that I tend to be more pragmatic about.
Thankfully we had an agent who helped us narrow in on what things we did or didn’t want to see when touring homes, as well as some guidelines to stick within.
Determine your budget and stick to it.
I was an absolute fiend for our budget. The idea of wildly increasing our monthly expenses freaked me out! I was really not wanting a mortgage payment that was too much higher than our current rent – and I also wanted to leave room for expenses like insurance, maintenance, etc.
My biggest piece of advice when looking at homes to tour is know your budget and really stick to it. It’s so tempting to climb just that little bit higher, but ultimately (in this market) the sticker price isn’t even the real price. The real price is likely to be higher. Only look at homes you’d actually be comfortable making an offer on.
My in laws definitely thought it could be fun to take a peek at some more expensive properties – but I was pretty firm. I didn’t try on wedding dresses I couldn’t afford. I needed to have the exact same mindset when it came to home shopping.
You’ll also want to sort through how much you plan to put down initially, as this really could impact your budget overall. If you plan to put anything less than 20% down, you’ll have to pay for PMI (private mortgage insurance), so make sure to plan for that.
Mind the things you CAN change and the things you CAN’T.
One of my close friends gave us great advice when we started looking for homes: there are things you CAN change about a home and things you CAN’T. Pay attention to those when making your decision.
Location
You cannot change the location of a home, which makes this incredibly important when taking tours. Do you like the greater area? Is it within livable distance from your work, family, or other things that may be important to you? What about the immediate neighborhood? Do you like the street your on, or are there things nearby that might be dealbreakers?
Another random thing to consider with location that we definitely did NOT when touring – check the home disclosures to see if it may need any special insurance such as flood insurance. These extra insurances can add a ton of cost. For the right home, that cost may not impact your decision to make an offer. But you can’t change the location of a house and if it sits near water, it’s an added expense to be aware of.
Weather
Weather? Can’t change it! So make sure you like it.
Will the summers be too hot or not hot enough? Does the home have central air and heat if you need it? Will the weather potentially add extra costs when it comes to maintenance of the home (such as heavy winds or snow)? Make sure to really ask yourself if you can live with the weather both in the current season and throughout the year.
School districts
This point may not be applicable to everyone, but for young couples it might be worth taking a look at the local school districts. While some districts can change over time, it’s unlikely, so you’ll want to make sure you’re comfortable with the local schools available if you do have kids or are planning to have kids.
Home layout/structure
In general, the actual layout or structure of a home is pretty difficult to change. It can totally be done, but requires renovation (and thus, cost). We tried to really focus on the “shell” of the homes we looked at, making sure we liked the overall layout and flow. We definitely were not wanting to do renovations, so having a home layout that made sense right of the bat was a must.
Home decor details (fixtures, paint, etc)
Good news! You’re touring a home and see carpet and paint you absolutely loathe…it’s totally changeable! And for reasonable costs, too! Home decor details such as fixtures, paint colors, etc are all things that are so easy to change it’s not worth letting a shag carpet turn you off from the potential home of your dreams.
How to choose your lender + the pre-approval process.
After we toured a few homes and started to see things we liked, our agent recommended we get pre-approved. We definitely learned some hard lessons during the pre-approval and lending process. Lessons that I honestly hope no one else has to learn. So listen up.
Your agent may say they work with a specific lender: this may be because they simply work with someone regularly or they get a “kick back” to do so (although our agent swears that type of arrangement is rare).
In our experience, we did ultimately go with a lender who was recommended to us. Things were moving fast! We were touring and wanted to get pre-approved. What we didn’t realize is that being pre-approved with a specific lender or even having them write your offer letters may mean you’re “locked in” with that lender.
Apparently, in our case, that’s exactly what it meant. I’ll open up a bit more a little later in this post about this, but the thing to note right now is the time to “shop around” for a lender that works for YOU is during the pre-approval and home tour process. Don’t wait – find someone you like. And have THEM do your pre-approvals and offer letters.
Clean up your credit.
In all seriousness, before going into the pre-approval process you’ll really want to dig into your finances and clean up your credit where possible. Pay off your credit cards in a timely manner and be prepared because lenders will absolutely pull your credit score. It’s how they determine if you’re able to get a loan at a favorable rate! Paying off any credit card debt should be a top priority and building good credit over time is important.
Financial health is literal wealth!
Love the house? Here’s how to make a competitive offer.
I think the heartache of not winning a bid is all part of the journey when it comes to buying your first home. At least that’s what I’m telling myself, because it definitely happened to us. We made a strong offer (almost 5% over asking!) on a home we loved, but left a little wiggle room for a counteroffer. Big mistake – there was no counter and the offer that came in at the price we had planned to counter with was the bid that won outright.
Definitely work with your agent after finding a home you love to put together a strong offer you feel comfortable with.
Don’t forget closing costs!
When deciding on an amount to offer, make sure you don’t forget closing costs! Tossing in an extra few thousand (or tens of thousands) may seem totally doable when making your offer, but ultimately that also increases the amount needed to close. Can you really afford it? Make sure to do the math! That monthly mortgage payment and a 20% down payment aren’t the only “liquid” costs involved in the process.
Come in with a strong offer, potentially over asking.
It’s really hard to give any advice on how to come to the table with a strong offer because different markets are all so varied. Here in the Bay Area, it’s perpetually a seller’s market and it’s always competitive. The first home we bid on, we were one of six offers. It was pretty crazy!
My advice? Just don’t do what we did and leave so much wiggle room. If you’re actually serious about the home and you love it – make the strongest offer possible.
Waive contingencies – only if you’re comfortable.
If there aren’t too many bids, I’d recommend keeping all contingencies. In our case, the seller had done an inspection only a month prior and provided reports in the disclosures – so we felt totally comfortable waiving the inspection contingency. Some of these waives can make your offer look extra appealing to sellers during a particularly competitive bid.
Offer a rent-back to sweeten the deal.
Another way to entice sellers to choose your offer is to include a “rent-back” option, allowing the seller to stay in the home after the closing date for up to 30 days. This extra time means sellers can continue to pack, tidy up their move, and even find a new home altogether.
The only thing to be aware of is that these rent-backs can be either free or paid. In our case, the sellers paid us $1 per day for the rent-back for up to 30 days. The word “rent” in “rent-back” can absolutely be deceiving – so just make sure to be clear what sort of arrangement you’re offering.
Even with a rent-back on our dime, we were still willing to do it. These types of offers can really sweeten the deal for the seller.
Learn from our horrible experience closing on our home.
In 100% transparency, we had the worst lender I could ever imagine. I truly have never had a worse business experience in my entire adult life. Ever. It was THAT bad. Our lender accidentally cc’d us on emails where he called us names to his colleagues (like “demanding,” “difficult,” etc). He blew us off frequently, only came knocking when something became “urgent” for his team, and frequently belittled us.
And above all – he assumed he was our lender without ever really making it official. We’re still confused, looking back, as to when he became our lender. Sure, we went through the pre-approval process with this lender because our agent recommended we do so. And sure, he wrote our offer letters. But at no point in time had we discussed any details when it came to rates and loans.
When my husband had a family friend come out of left field literally one day after our offer was accepted, saying he could get us a lower rate than our lender was currently quoting us, we took that number to the lender to negotiate down. And he FLIPPED out. He said we were “backstabbing” him.
Honestly – just don’t do what we did. Actually shop for your rates and really be clear with potential lenders that you’re doing so. It’s well within your right as a buyer to shop around for the best rate – a GOOD lender won’t get mad at you for doing so. They’ll either tell you they can hit it – or they’ll let you go with another lender who can. This is your livelihood. Don’t let someone bully you into a higher rate than you can get elsewhere.
Choose your lender wisely – we did not.
So all that to say – choose your lender wisely. We sure didn’t. Make sure you’re up front with your lender about what rates you’re seeing and what rate you’d like to get. A lower interest rate saves you a ton of money over the life of the loan – it matters!
Also ensure you have a lender who won’t go rouge like ours did. The only contingency we had was an appraisal contingency, and this guy went ahead and WAIVED it without ever asking us. He pitched it as “good news, we’re able to approve your loan at that amount with no appraisal needed” – but really what that meant is we lost out on the opportunity to negotiate the price of the home down if it hadn’t actually appraised. Again, costing us potential money and opportunity.
Communication is key! Our experience sucked. Don’t do what we did.
Negotiate your rate!
Shopping for rates, despite what this lender made it seem like, is NORMAL AND OKAY. It is well within your right as a buyer to shop around and negotiate rates. Sometimes negotiating can feel like playing uncomfortable hard ball, but honestly it needs to happen.
Did we feel bad we “hurt” someone’s feelings by letting them know another lender made us a better offer? Sure. But they also could’ve cut us loose. And they didn’t. Instead they matched the lower rate someone else quoted us and proceeded to treat us like garbage the rest of the time because they weren’t making the same money off of us.
Not our problem – and it ain’t yours either. Hustle for that lower interest rate. It’s your paycheck. It’s your money. It’s your savings and your expenses. Shop!
Do not be ashamed to ask questions.
Our agent never made us feel stupid for having any questions, but our lender sure did. As a first time buyer, it’s totally normal to have no flipping clue what is happening in the process or what will happen next. Asking questions doesn’t make you “difficult” or “demanding” – it makes you thorough and a responsible adult.
Follow us on our first time home owner journey!
I’m really trying to cut myself off in this post because I don’t want to remember my first buying process as the lending process. Because that sucked – LOL. We’ve got so many other fun things ahead of us!
I can’t wait to immediately get a dog. I can’t wait to decorate and really make our house feel like a home. I can’t wait to be the hosting house! I want to host holidays with family and dinner with friends. I want to be THE house people love to visit!
I’ll definitely be doing plenty of blog posts all about our home owner journey as well as even more advice for first time home buyers – but make sure to also follow me on Instagram and YouTube because I’ll be doing tons of content on those platforms as well!
Please drop any advice for first time home buyers you have in the comments down below. I want to make sure new buyers can find all the advice they need right here – so be sure to share!