Folks,
This comment was left in response to a video on Chow Time Pod's channel. The video was about women losing their houses. They lost their houses because they bit off more than they could chew. Below is my comment, which has my thoughts and experiences from the home buying process...
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Didn't these women-gasp-do RESEARCH prior before buying a home? I know I did! Buying a house is the biggest purchase most of us will ever make, so it would seem prudent that one would carefully research that purchase first. I was in a unique position to do so though. While I was between jobs back in the early-mid 2000s, I took a temporary office job at a title company. I didn't know such companies existed, but they do. I learned a lot there. When things were slow, I'd read industry and trade publications and websites, and I read about the home buying process. I wasn't in position to buy a home then; it would be another 10 years or so before I was, but I took advantage to learn about buying a home, as I knew that was something I wanted to do at some point.
I learned a lot of things. One was to get a home inspection. One thing I read about was horror stories of people who, in the rush to buy their dream house during the real estate boom back then, would skip the inspection. Weeks or months later, they'd wake up to find a cracked foundation or something serious like that, and they'd be on the hook for tens or even hundreds of thousands of dollars. While part of me felt bad for these people, another part of me didn't. Why? A home inspection would've caught something serious like that. Moral of the story: don't buy a home without an inspection; don't even think about it, People!
Let me tell you a story. There was a house in my city that I loved. I put in two offers on it, but I walked away from it. Why? Because the seller played games with the inspection. It was a foreclosure. When a home is foreclosed, they turn everything off: the water, furnace, electrical, the whole smash. Before you can do a proper inspection, you have to get the utilities turned on in your name; you have to have everything working before you can inspect it, right? It's elementary. Depending on the utility company and their backlog, this can take a week or so. The seller wouldn't work with me on this; they wouldn't give me sufficient time to get the utilities turned on in order to do a proper inspection. I walked away without thinking twice about it. As much as I liked that house; as much as it pained me to do so; I walked away. Why? Long before I started the home buying process, I'd made up my mind that, if I couldn't get an inspection or the inspection results had bad news, I'd walk away from that house; my motto was: no inspection, no deal.
Long before you even think about buying a home, you have to establish boundaries; you have to figure out what your personal non-negotiables are, so you can override your emotions and walk away from a bad deal. One of mine was the home inspection. I'd learned from my research that an inspection before purchase is a must, so as to avoid any unpleasant and expensive surprises after signing on the dotted lines and getting the keys to the house. Buying a home is a very emotional process, so you have to have your boundaries in place long before you start looking for a house. You have to figure out that, if X happens, I'll walk. People who skipped home inspections to buy a house they loved didn't do this; they didn't figure out what their boundaries were before they started looking at houses. They got caught up in their emotions, and they bought a house that they shouldn't have.
Another thing I learned from my research is that, if you're going to buy a home, you have to set aside at least 1% of its purchase price annually to pay for repairs. There are at least two absolutes when it comes to home ownership: 1) things WILL go wrong; and 2) you're on the hook for them when they do. There's none of this calling the landlord to fix something when it breaks or dies; as a homeowner, that's on you. Your water heater went out? That'll be $1,700, please. Does your HVAC system need replacing? That'll be $12,000, TYVM! I speak from experience, as I had to replace both over the last two years. This is especially true if you buy an older house, which is all you'll likely be able to afford for your first home. An older home will have older systems, and older systems will sooner need repair or replacement-again, elementary. When it comes to home ownership, the Boy Scout motto applies: be prepared. Things WILL go wrong, and you have to be ready when they do, Folks!
A third thing I figured out was that I didn't want to live somewhere with an HOA. It's not just because of the sometimes petty rules they have, though that's part of it. No, it's because, if your HOA doesn't set aside enough money for maintenance (of the roofs, streets, etc.), you can be hit with a special assessment. That's right; you can be hit with a huge, one time fee above and beyond your monthly fee. This can be in the thousands of dollars or more, and you have to pay it all at once! Can you afford to eat that kind of expense? You may have to if you have a bad or shortsighted HOA. Even if you have a good HOA, circumstances beyond their control or ability to anticipate them can trigger a special assessment.
Do you all remember the condo that collapsed in FL a few years ago? It was in Surfside, FL, a Miami suburb. In the wake of that disaster, FL tightened up their building codes and inspection requirements. Guess what? Owners of older condos found themselves hit with SIX FIGURE special assessments! Thanks to the new building codes, older condos required serious structural work to conform to the new building codes. This work cost millions of dollars, which was divided among all the owners of that condominium building. That often worked out to hundreds of thousands of dollars per condo owner. Many people had to sell their condos because they couldn't come up with the special assessment. If you don't have an HOA, you, as an owner, can be more proactive, so as to head off such disasters before they happen.
A fourth thing I learned was that, when you buy a home, you're tied down. When you rent, you can easily walk away, as the property isn't yours. If you're not sure about wanting to stay somewhere long term, do NOT buy a home! If you walk away from a rental, the most you'll be on the hook for is whatever rent is due for the remainder of the lease. If you have a good landlord, you can negotiate that; you can let them know that you're searching for a home or awaiting a promotion that'll necessitate a move, etc. However, it's a lot more difficult to walk away from a mortgage. Keep this in mind before buying a home. You cannot appreciate or understand how owning a home ties you down until you buy one.
Those are just a few things I learned about buying a home. Before you even think about buying a home, you MUST do research! You must have an idea of what you're getting into, as it's the biggest purchase most of us will ever make. You have to figure out your boundaries, and you have to be willing to walk when they're violated. You have to have a fund set aside for home repairs, as things will go wrong; it's not a question of if, but when. Finally, buying a house ties you down, so don't buy a house until you're sure you want to settle down somewhere. Those are my thoughts...
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