Lessons I learned before successfully buying a house

May 15, 2015

Lessons I learned before successfully buying a house

With the housing market rising with no end in sight, I knew right away that if I don't secure a property now, I wouldn't be able to afford anything in the future. Since money depreciates, the things you can buy are much less than the dollar value few years later. Fortunately, my significant other is also on the same page as me so we decided to jump into the market sooner.

But little do we know that the housing market is far crazier than we thought. We started looking since last year in fall and have lost track of how many times we've been outbid by other buyers. They just seem to have an infinite amount of money to spend... a property can end up selling for $100k more than asking price! How crazy is that? But we are determined and survived this rollercoaster of a journey, and finally bought a house just recently! Looking back, it was an emotionally stressful process but we learned a few lessons along the way that helped us get to where we are now.

Do you research

Over the last few months, we've spent most of our time after working looking at open houses in the area that we were interested in. We asked our agent to help subscribe to new listings so whenever new properties come out on the market, we get notified immediately through emails. Visiting the actual homes was a very important step for us; we learned that simply checking MLS realtor and Zoocasa websites is not enough because photos can be deceiving. By actually going and looking at different houses, we learned how to determine and compare the value of each house. For example, there are a lot of variables that can drastically alter the value of a home; a townhouse that might not be appealing inside could cost more than a semi-detached home because it is within a top-ranking school zone.

Learn your market

I believe this is the key lesson that we learned and it goes hand in hand with doing research. Each time after we've finished looking at a property, we would note down our likes and dislikes on the listing paper for our records; it's hard to remember all the details of a house after visiting so many. We would also mimic the showcase game from "The Price is Right" where we guess how much the property will sell for, how much we would be willing to put in and compare with the actual sold price provided by our agent. At the beginning of our journey, our numbers were so off from the sold price that we thought the buyers were insane. Over time we learned that these prices only reflected the market value of the house and we came to realize that the listing price is actually irrelevant; A house could be listed much lower to attract more buyers and promote a bidding war. We were only able to learn about the true market value of the property by comparing sold listings. By comparing similar properties within the area around the same time frame, it gave us a better understanding of how much the particular house would actually cost us.

Stay calm and be realistic

We have been casualties of numerous bidding wars, including our highest record of competing against 22 other offers with 3 rounds of improvements for a semi-detached house! As two inexperienced first-time homebuyers, the bidding war situation completely threw us off track and made us feel nauseous every time the seller asked us to improve our numbers and said that we are "close". However, we'd always ask ourselves what would be the absolute maximum price we want to put in and when to draw the line. There was one house where we lost a bid by a mere $6000 because we weren't willing to pay the market value for a house that was just short of perfect in our eyes. We regretted it afterwards because, in the back of our minds, we knew we were too focused on getting a bargain unless everything about the house was perfect. We realized that was really naive of us, so we learned to let go of some items on our wish list. At the end of the day, you cannot expect to get a dream house - unless money isn't a problem for you.

Act fast

Timing is crucial in everything, which includes buying houses. As soon as we saw something we liked from the listings, we would immediately ask our agent to schedule a visit after work so we can hopefully see it before everyone else and make an offer if we still like it. We've looked at a townhouse before that was on the market for only 6 hours with no holding back offers, and when we were ready to put in an offer for it (which was only an hour after we checked it out), we found that 4 other offers also came in at the same time as us. Had the seller held back offers or let the house sit on the market for longer before taking offers, there could have easily been much more buyers than just the 4 that we competed against.

Step ahead

In order to get the house we liked, we also learned to step ahead of the game. A few months ago, we were not even looking at the proper price range or adjusting it because we were unrealistic and inexperienced with the market. Over time, we adjusted our price range and looked at houses that were slightly pricier than the ones we looked at previously without realizing we were only following and chasing the rising house market. By stepping ahead, and putting a bit more money than the current market value (within our means, of course), we became the forerunner of the market and ultimately see the market catching up on us with not even a house as nice for the price as the one we purchased.

All in all, it was definitely a rocky journey for us but I'm glad we learned our lessons quickly enough because now we have a house to enjoy for a good number of years. If you're also in the same boat, I hope our journey helped give you some perspectives on what's it like to be buying a house during a hot market.

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About Me

About [span]me[/span]
Hello, I'm Lorita. Hoping to inspire you to explore and create things that make life a bit more fun and beautiful.