The Ups, Downs, and in Betweens of Buying Your First HomeSubmitted by KWB Wealth Managers on June 11th, 2019
By: Rachel Bubb, Wealth Manager
In honor of “Home Ownership Month,” I thought I would share my most recent experience of becoming a homeowner. It felt like it happened pretty fast. I was entertaining the idea for several months, having the big debate of whether I should rent or buy, visiting open houses, and constantly perusing Zillow. But I wasn’t ready to take the leap. I told myself, “Wait till spring. It’s still January. More homes will become available.” So, that’s what I did. I waited and told myself that the universe would eventually present me with my dream home! (I tend to put too much faith in the universe.)
Then March arrived. The market was hot, and houses were selling FAST. Panic kicked in and I realized I needed to get my act together if I wanted to buy a home.
I was entertaining three different houses but was holding back on making any offers. I’m very indecisive and always think, “What if there is something better?” Of the three, though, I was particularly excited about one. It was in a great location, with a lovely backyard, and nice curb appeal. My realtor and I planned to see it in a few days. However, shortly after setting up a time, he called and said its owner would be reviewing offers the following morning. I immediately jumped in the car and met him at the house. We ran through it in 15 minutes, then, for comparison, quickly stopped at the other houses I was considering. In those rushed 15 minutes, I gathered that I liked the house, it needed some updates, but overall it was a good fit. Impulsively, I made an offer. I slept poorly that night due to an endless stream of thoughts in my head: What if they accept my offer? Did I rush this decision? Should I have kept looking? Am I even ready to be a homeowner? What was I thinking?!
Well, to keep this story short, my offer was accepted, and I am now a homeowner! With a long escrow, I had plenty of time to overthink my decision. I experienced moments of extreme excitement that erupted quickly into moments of panic and fear. Buying this house meant I was committed to living somewhere for more than a year. After being a nomad for three years, you can imagine how uncomfortable the idea of settling down felt. But the day I received my keys and stepped into my new home, the worries disappeared, and excitement returned.
I’ve been a homeowner for about a month now and the commitment becomes more real every day. To be fair, I’ve taken on a lot of home improvement projects. The projects seem endless and never go as smoothly as you’ve planned. Due to a tight budget, I’ve had to learn to be an electrician, a carpenter, and a painter, and I am sure more opportunities to learn a new skill are to come. My weekends are dedicated to fixing up my new home and multiple Home Depot runs. If something is broken or needs tending to, that’s on me now! There’s no longer a landlord for me to call. And even though my feet hurt and body aches at the end of the day, when I turn on my new recessed lighting and look up at the freshly painted ceilings, I smile and bask in my progress.
It’s a big step, buying a home, but I see it as an investment in my future and well worth the risk. Yes, it’s a lot more time, work, and effort to own a home, but at least I know the money I put in is going back to me. I now have a place to call my own, with rules of my own, and the liberty to do as I please (within reason!) I love the fact that if I want to paint my room yellow or gut that 1960’s bathroom, I can.
A lot of people in their 20’s and 30’s believe they can’t afford to buy a home these days, making the American Dream seem unattainable, especially in the Golden State. The cost of ownership is high, and wages are not increasing at the same rate as home prices, so it’s difficult to justify the risk of purchasing. And if you’re going to take the risk, it seems there is more pressure than ever these days to scoop up a home as soon as you can or you’re out of the game. That is how I felt. While I was shopping around, houses were selling as soon as they hit the market. I felt the urgency to get in while prices were still in my reach and hang tight even if it meant I’d have to skip out on that family trip to Europe or a ski pass for the upcoming season. These are adult decisions I’ve reluctantly made, but I didn’t want to be a renter forever.
If you’re like me and not interested in renting for the rest of your life, have no fear, there are things you can do today to achieve the American Dream. Start by setting a goal and begin saving. I think the best way to do this is to play with an affordability calculator; determine how much you can afford today and what you need to do to get there. Then, picture that dream home of yours and set up a conservative investment account where you siphon money away twice a month. Why not just put it in a savings account? Because you can make some return in an investment account as opposed to a savings account. This may limit your ability to eat out or take weekend trips for the time being, but that dream home is well worth the sacrifice.
Then, when you’re ready, research first-time home buyer programs in your state and county. There are several assistance programs out there that offer grants for down payments and closing costs. There are also loan programs that are more flexible in their requirements than traditional loans.
And if you’re still unsure of what steps to take or what you need to do, use your resources. Talk with a lender or real estate agent. Call up a financial adviser and see what they suggest! Or reach out to family and friends and get advice from them. As I have been endlessly told by my father, “Chance favors the prepared.” So, do what you can now to make sure you’re prepared when the universe introduces you to your dream home.
The Wealth Managers of KWB Wealth Managers Group (KWB) are registered representatives with and securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.