We are buying a house – and I’m taking you along on our journey. Budgeting for a new house (2 mortgages until we get our house rented out), moving expenses, repairs and more. Not to mention – moving my couponing stockpile! I have no idea how long this series of posts will be. But I want to share everything I learn with all of you. From budgeting, to interest rates and home insurance, to decorating on a dime and everything in between.
Buying a house can be quite a task! There is so much to research, so much to learn, and you must have LOTS of patience. I decided about a year ago that it was time to buy a new house. My husband on the other hand, was not ready until about 2 months ago. Once he was ready, we began our journey.
I will start by telling you WHY we are buying a house. We live in a great little town just outside of Orlando. We are half way between Orlando and Daytona Beach. So we are out of the hustle & bustle of the city (and far enough from Disney!) which I love and we are about 25-30min to the closest beach. We are not leaving our town. We have fallen in love with it and my kids are active in the community. My oldest is in middle school, and he is active in our youth group and sports, so that is another reason we are staying put in the same school district. When we first moved to our current home, we had 2 young children (2 & 4 years old). We have since grown to 4 kids – ages 12,10,7, and 5. We have now outgrown our 3 bedroom home. I also work from home now (was previously a nurse-full time OUT of the house) so I need an office space as well.
More living space OR room to add on after we move in
Land for the kids to practice baseball/softball (possibly add a batting cage)
Away from busy streets (we are currently on a semi-busy road)
Stay within our school district
We are in Florida so we would like to have a pool home again (the kids are always in our current pool)
We would also like to stay well under what we were approved for. I learned this lesson while house shopping. Just because you are approved for a certain amount does NOT mean you need to spend that amount. Took me awhile to understand that. Thankfully my husband is a Financial Advisor & CPA so he keeps me in line and on budget.
We had our eye on 3 houses and we actually put an offer in on two of them and waited. I fell in love with one of them (bad idea to get too attached to one house so early by the way). I do not want to share too much personal info about prices/income etc, so bear with me.
House 1 – $40K over what we were approved for. Bank Owned. 5 bedrooms + office 4500sf, pool, big yard, 2 laundry rooms, large garage. Negative points: in an HOA, needs some repairs, is way over what we were approved for. *PS hubby was not on board with the price *
House 2 – $10K over what we were approved for. 3 bedrooms, 3500sf, office, 1 acre, pool, “mother in law/guest house”, large garage. Drawback – only 3 bedrooms, out of school district for my younger kids
House 3 – Short Sale, $40K less than what we were approved for, 4 bed + office, decent yard, 2500sf. negative points: no pool, short sale may be a headache, smaller house, yard is much smaller than other 2 homes.
I obviously fell for house #1. Note – earlier I said I learned during house hunting to stay UNDER budget – major fail here! 2 laundry rooms – 1 upstairs, 1 downstairs! 4500sf! bonus rooms, and more. Dream kitchen! How could I not fall in love?? Once the realtor said “because it’s bank owned they may take ANY offer” , I was determined to make this our home. We made an offer and waited. And waited, and waited. They countered, we countered. We waited…and waited. Final offer they gave us was $35K more than our loan approval. I sadly gave up. I made the mistake of comparing every house to this house. Bad idea. It took me some time to recover. But as I said before, I know better, and we don’t want to be house poor.
House #2 – we offered $10K less than we were approved for (20K less than they had listed it at) . They responded with a YES but the owner needed to find a place to live before he would sign anything. Hubby was determined to get this one. This was his favorite. He loved the idea of having a full acre. And that “guest house” was going to be all his – man cave? We waited, and waited. We waited some more. I checked online and the house was gone. They decided not to sell and took it off the market. Thanks for letting us know! ARGH.
At this point, we were both tired and pretty disappointed. We looked at a few more. We tossed around the idea of a short sale. We looked at a few more. We prayed about it…we looked at more houses….and waited. I finally got OVER house #1 and stopped comparing.
Then a house popped up in the exact community we were looking for. It was a 5 bedroom on 2 acres in our town and school district. AND the best part??? It was $120K LESS than what we were approved for! The stars aligned and we jumped on it. And we offered LESS. They countered back and we took it. $122K LESS than what we were approved for. HAPPY DANCE!
The house will need some work. The 5th room is unfinished. It seems the previous owners began to add a new master bed & bath but never finished. There is also a few other things that need to be done and we plan to add another living area on the back.
What did we learn?
- Be patient, the right house WILL come along.
- Pray about it – or if you’re not a praying person, ask friends/family for their thoughts & advice throughout
- Don’t be house poor.
- Don’t get attached to a house before the contracts are SIGNED!
- Get your budget under control BEFORE you start this journey!
I also learned about a FHA 203K loan. This type of loan covers not only the cost of the property but also the cost of necessary home repairs.
Next step: Inspector is scheduled to come out this. He requested to meet us AFTER the inspection to let us know what he found. This is a big no-no in our book. We will be there with him through the entire inspection. He agreed.
I will update again after the inspection.