Sometimes even the best plans don’t work out.
- Tenants often have no control over how much their monthly payments increase or when they have to move out.
- Buying a home can result in a lower monthly payment, but there are other costs to consider such as: B. Deposit and insurance.
- A good real estate agent can guide you through the home buying process.
A few years ago my then boyfriend, now husband and I were looking for a new apartment. Our landlord sold our unit, so we spent most of our free time browsing listings online and visiting open houses on weekends. We lived in the Bay Area and were trying to find an affordable place with an easy commute to San Francisco, so you can probably imagine how lucky we were. In the two years that we lived in our apartment, Oakland prices continued to rise around us, and we soon realized that we were overpriced.
After what felt like my zillionth viewing of a dingy, overpriced apartment, my frustrated brain began to wonder what it would be like to buy an apartment instead. We looked at our finances, did a little math and talked a lot and realized that looking for a home of our own made more sense for us than continuing to rent. And so we finally bought a house in one of the most expensive locations in the country. That’s what it looked like.
to get help
Our first step was to get a guide. We found a great real estate agent who was able to walk us through every step of the process and fully understood our situation as first time home buyers. We didn’t know what contingencies were, what documents to have ready or what a mortgage pre-approval was. Not only did our agent know the Bay Area real estate market well, but he was an excellent sounding board when we were figuring out what we wanted in our starter home.
We started opening houses in different cities and neighborhoods trying to find something that would work for us. We had a tough move out date from our apartment so we were in a time crunch. After several weeks of searching, we found something.
The first house
The neighborhood wasn’t great, and it was listed at the top of our price range, but the house had been totally turned inside out. We were thrilled and made an offer together with our real estate agent. And, holy smokes, it was accepted! Our excitement lasted about a week, until inspection day. As it turned out, there was a huge crack in the foundation that had been “fixed” by the flippers with what our inspector called a band-aid. He told us that with one big shake the whole house could slide off the foundation. You don’t want to hear that in earthquake country.
Thank goodness we hadn’t skipped our contingencies that many buyers in hot markets do to accept their offers. After discussion, we decided to back out of the deal and keep looking.
Discover: We ranked this company as the best overall mortgage lender in our 2022 Best of Awards
More: Our picks for the best FHA mortgage lenders
The second house
A house search is exhausting, especially after feeling so close, but we pushed on. A few weeks went by again and our move-out date was getting closer. One weekend we wandered into an open house for a little place that seemed solid but very dated. It didn’t have the glamor of the first house, but it didn’t have any major problems either. And it listed for $150,000 less, which put it comfortably within our budget. So convenient that we found we could do the work to improve the home and make it shine.
We were very lucky; The house was in too good condition (and price) to interest fins, but not nice enough to interest move-in buyers. In the land of bidding wars, we made the only offer – and we were accepted. About a month later, we got the keys to our new home with a monthly payment that was about half the rent of our apartment.
How we made it work
I know how fortunate we were to be able to buy a house because it’s not that easy to exchange rent for a mortgage payment. The cost of owning a home ranges from insurance to regular maintenance to property taxes. And most importantly, you need to save enough for closing costs and a down payment, which ideally is at least 20% of the purchase price. Because we were hard savers, budgeted in advance and decided on a (relatively) cheap house, we were able to make the move.
Having a real estate agent that we trusted to guide us through the entire process also made a huge difference. Buying a home can feel daunting, especially for first-time home buyers. We had many questions and often felt like we didn’t know what we were doing. But we kept learning and talking before making big decisions, and we ended up with a little home to make our own.
Many people prefer to rent even if they could buy. We felt that way at the time and would have happily continued renting in our old neighborhood if we could have afforded it. But life doesn’t always go according to plan…whether it’s plan A (a new apartment) or plan B (the upside-down house) or plan C (no renovations needed). But Plan D (a fixer-upper!) ended up being the best choice we could make, and I’m grateful for that.