I recently went through the process of buying a house only to have it fall through right before signing the final contract. The experience was not super fun but it was a great learning experience about the home buying process.
The Beginning: Realtors & Mortgage Pre-approval
A few weeks ago I started to look at houses to move into after my current apartment lease ended. I knew I didn’t want to stay in my apartment so I figured I should get a jump on the search.
Somehow in the midst of looking up rentals I switched to looking at homes for sale. I checked my credit score with Credit Sesame and realized I had moved into the excellent credit score range. This combined with my steady job made me a decent candidate for buying a home.
Then in a midst of late night insanity I requested info on a house for sale that I found on Trulia. It was a crazy low purchase price in a decent neighborhood so I figured what the heck – why not pursue this and see where it leads.
Several agents contacted me and asked me to call them. I ignored those but did answer a real estate agent who emailed me with more information and asked me if I had been preapproved for a loan. She gave me enough information in her reply that I became curious about the home buying process.
She asked me to take the first step and contact a mortgage advisor who would run my credit and give me a number to work with. I contacted the lady this real estate agent recommended along with a few online companies. I liked the one who had been recommended so I ended up getting a prequalified quote from her after she ran my credit.
After sending my details over, I was given the number of $120,000 and sent back to my real estate agent. The mortgage lady was thrilled with my credit score and income and seemed very excited about my prospects. It shocked me that several days before I had not been seriously thinking about buying a home and there I was with the option of looking at houses to buy up to 120K! It goes to show you that money management can lead you to a place where you can do bigger things!
The Search: Looking At Houses
The Saturday after I first spoke to my real estate agent I met her to look at several houses I was interested in seeing.
I’d been obsessively looking through available house listings that whole week. I’d driven past my favorites and stalked them at different times of day to get a feel for the neighborhood. At my favorite option I’d ran across a good friend visiting her friend a few houses down from the house I was looking at – a good sign I was looking in good neighborhoods!
That Saturday we looked at several houses in four different neighborhoods at various price points from $68,000 to $97,000. I had decided that I didn’t want to go over $100,000 if I didn’t have to so my real estate agent showed me houses I liked within a lower price range.
I ended up liking the second house I saw, which had been my favorite before actually going into the house. It was a cute little cottage the same size as my apartment with a tiny asking price: $72,500.
After looking at other houses for several hours I couldn’t get the cottage out of my head. It was in a good neighborhood, it was cute, it had major potential with some work, it would be easy to rent out in several years, and it was priced right.
The Offer: Making An Offer And The Dance
I asked my agent to look at comps and let me know what she thought because I had fallen in love with the house. We parted ways and I went to hang out with my family. After a few hours she called me back and said she thought I could make an offer of $65,000 and ask the seller to pay closing costs – exactly what I had been wanting to do!
It felt right so I went to her office and filled out the paperwork to make the offer that same day. It was a crazy experience but I was terribly excited the entire time!
Afterwards I called my mom and told her the exciting news and went to lunch to celebrate. I’ve never felt more like an adult or more proud of myself than when I made an offer on my first house!
Over the next few days we went back and forth on the price and the details. It was a nerve wracking dance of back and forth communication through real estate agents. We ended up settling at a higher price than my original offer but still lower than the asking price. It was a good deal and I was thrilled to be getting a cute little house with a tiny mortgage.
The Follow Up: Inspections and More
After the deal was settled on and the offer and counter offer dance was finished all the inspections and follow up work began.
My realtor recommended a home inspector and I ended up choosing him to do the inspection on the house. I wanted to be there so I made sure it was at a time when I could be present. The inspector was great and honest and shared a lot of interesting insight about the house and owning a home in general.
Unfortunately he also discovered that the roof on the house was completely useless. It had holes, it needed repairs, and it would only last maybe another year before it needed to be completely replaced. This was the main problem found with the inspection and he counseled me not to move forward unless they put a new roof on the house because otherwise I would have to do it in the first year of living there.
I asked the seller for a new roof and a few other minor repairs that had come up in the inspection. They agreed to most of them and I moved forward feeling optimistic as I saw the new roof being put on the house.
I pulled the down payment out of my Roth IRA and prepared to move forward with the home buying process.
The Closing: When I Didn’t Buy A House
Two weeks before the closing date on my house I ended up losing my job.
Immediately the stress and panic began. How could I get a house without a job? How would I make the mortgage payments? Would I be able to find another house? Would I get arrested for fraud if I didn’t tell the mortgage company I lost my job?
Initially I tried so hard to hang on to the house. My old boss said she would confirm my employment past the closing date since I was still being paid severance. I knew I could technically get away with going past the closing but just the thought of it stressed me out to no end.
After a week I decided to walk away. It wasn’t worth the stress of trying to figure out how to still buy a house when I was looking for a new job and starting an online business and already dealing with so many major life changes. Having an older house to deal with would have been too much stress on top of the rest.
It hurt but walking away was the right decision for me at the time.
The Lessons: What I Learned From Trying To Buy A House
Ultimately the home buying process taught me a lot of lessons:
- Having a good credit score is important and will save you money when buying something big like a house. Use a free service like Credit Sesame to check your credit score before looking into home mortgages.
- Managing your money and getting ready to buy a house is crucial. Do this before you ever start looking at houses. Learn how to manage your money!
- Think about the price you can afford, not what you are approved for with a mortgage. I ended up going for a house that cost about half of what I was approved for and think that was a great decision.
- Don’t look at houses beyond your price range. Once I picked $100K as my limit I refused to look at houses above that number. Why even tempt yourself into a bad decision?
- Find a good realtor, mortgage advisor, and home inspector. They will help you so much and their experience can save you from making major mistakes.
- There are always more houses. You might LOVE one house but it’s not the end of the world if you have to find another.
I learned a lot and am more than ready for the next time when I will hopefully actually buy a home. It might be a few years since I’m going in a different direction with my life but I’ll be very ready when it finally does happen!