Buying a Home? Here’s What You Need to Do First, Part 2
Part 2
In part 1, I discussed the first step you need to take before you buy a home. The first step is deciding on your must-haves. Remember to keep this list short.
This time, I’ll talk about the next two steps, focusing on the constraints or the problems you’ll face.
Determine your “this would be nice” to haves
What are the things you’d like to have in your new home?
For example, I wanted a cul-de-sac lot with a large backyard. My dad also suggested finding something with an outdoor feature, like a pool. We were planning to stay put for 10 years. [1]
The list can be as long as you wish but make some priorities. Otherwise looking for a house becomes unwieldy.
You’re not going to find your perfect home. But you can get closer if you make these decisions up front.
This list should include a secondary location. You can choose a primary and secondary location any way you like, but commute times are often a factor.
Within our commute radius, I had a drop-dead date of June 30, 2021, to find an existing home.
After that date, we were going to have to look at new home construction. Our list of must-haves included a home that didn’t need remodeling.
But buying a newly built house was going to be a problem.
The forces you have to work around
By 2021, if you talked to new home builders, they couldn’t guarantee a completion date. [2] Because materials and labor were hard to find. Costs were going up, so locking in a price was getting harder.
While the price we wanted to pay was set (and then reset) and the interest rates were low, there were a lot of problems in the housing market in the Atlanta metro area.
· Prices were rising every month.
· Remote workers flooded the market. Many had a lot of cash.
· Investors entered the market and snapped up homes with all-cash offers. [3]
Prices not only rose but became unpredictable. All-cash and higher-than-normal offers from remote workers competed with our offer. Bidding wars erupted.
One home we toured that got a lot of attention was further out than we wanted. It was otherwise perfect. But we didn’t make an offer. We had no idea what the final price would be.
It was impossible to figure out pricing. And that’s what I’m good at!
Our willing-to-buy-at price rose by over $50,000. But it wasn’t helping.
We made three offers the sellers rejected for all cash.
Low interest rates lured institutional investors into the market. According to the AJC, they bought one third of all the homes for sale close to Atlanta and turned them into rentals. That pushed more buyers further out.
Fortunately, you don’t have to contend with that if you’re hunting now. You’ll have other constraints. You may need a location that’s not too far from work. You need a certain number of bedrooms and bathrooms.
Your income will determine how much house you can afford. Interest rates will play a bigger role. Any good realtor will let you know how much you can afford.
Finding a buyer’s realtor in your top location is a good idea.
Armed with this information, you can begin your hunt.
The rest of our story
I’d gotten into the habit of waking up around 8am, getting on Zillow, and looking at new listings anywhere in our area. Then I went back to sleep.
We’d also changed our buyer’s realtor. We needed someone who was familiar with the markets closer to Athens, GA.
But we didn’t want to be too far away from family. You could almost draw a straight north-south line about 30 miles east of Atlanta where our family members lived—apart from the son who lives in the Atlanta city limits.
So, on June 25, at 8am, I woke up and started on my Zillow quest. I was less than a week away from my deadline.
And there it was.
The listing was unusual. But it had an Oxford address which was a green light to a college gal. [4] Before Mark got up, I called our realtor, who kept farmer’s hours, and asked her to find out more.
On July 2, 2021, we bought our new home.
It’s not perfect. But it works.
Your new home won’t be either, but if you do some up-front planning, you’ll get what you need.
As always, thank you for reading. Your support means so much to me.
Nikki
A special thank you to Chelsea and Laura for inspiration and encouragement on this post.
[1] That plan is going to change sooner than I’d hoped. Of course the last time MArk suggested we move, I had the kitchen ripped out!
[2] We found this is the Atlanta area and near St. Augustine, FL, which was our dream location until we found out we were going to be grandparents.
[3] I want to write about this problem in a future post, but it will take time I don’t have now. Low interest rates lure institutional investors into the market.
[4] Emory’s Oxford College, a two-year school, is in Oxford. I was familiar with the campus from prior visits for teaching conferences.