When I was a young girl, I’d always dreamed of getting married and buying a home with the love of my life by my side. It would be exciting, and scary, and fun, and exhausting – but we’d do it together, and somehow, even with all the stress, it would be the most romantic thing we would ever buy together. Our very own home. To share together. For the rest of our lives.
But then I was staring down the barrel of 30 without a ring on my finger, and I realized my girlhood fantasy was going to remain just that…a fantasy.
One year, when I clearly had too much time on my hands, I decided to add up how much money I’d paid in rent since I moved out from under mom’s roof. Talk about a shock! A jaw-dropping, breath-sucking, head-spinning shock. Over my life as a renter, I’d given someone ELSE over $100,000 of my own hard-earned money.
My money. Money I’d never see again. There had to be another way to live.
I’d never even considered buying a home on my own. That was something left to the marrieds. After all, I knew nothing about buying something that big. Didn’t you need a second income to afford to pay a mortgage? Didn’t you need a man around the house to fix stuff and do the heavy lifting? Didn’t you need a husband next to you to investigate all those scary things that go bump in the night? The proposition of being solely responsible for a mortgage and a home and all the other stuff the comes with home ownership scared the proverbial poo out of me.
But, the idea of giving away another hundred thousand bucks to someone else pissed me off more. (Pardon the strong language. But I was downright angry at the prospect.)
So I started researching the possibility of buying a home on my own. It started out of curiosity – a hobby, really. But what I learned reshaped everything I’d grown up believing about becoming a homeowner. I could do it. On my own. In all my glorious singlehood. There was a way. So I set out to do it in the best way I could. And along the way I learned a few valuable tips about looking for and buying a home as a single girl, and I’d like to share my top 10 pieces of advice here.
Before you decide to buy a home, you should be sure you plan on staying in the area at least five years. If the answer to that is yes, then read on, future home buyer….
- Location, location, location. It’s true what they say: Location is everything. The biggest factor in the investment potential of your home is its location. There are a few factors that come into play when choosing a location. Of course, crime rate is obvious. But how do the other homes in the neighborhood look? Are they kept up or run down? Is the home close to a freeway, railroad track, or other noise-producing entity? Is it downwind from a paper mill or cattle feed lot? (Whew! Those things stink!) How highly ranked is the school district? Even if you don’t have kids, the school district is uber important when it comes to resale and property value. Be sure to talk openly with your realtor about other contributing factors (see #7).
- Good looks are skin deep, but ugly goes all the way to the bone. Ignore things that are easily changed, like paint color and flooring. Carpeting is incredibly easy and cheap to replace through major retailers. I can lay hardwoods and tile myself. (Keep an eye on this website for future how-to episodes for laying hardwood and tile floors.) And painting is the biggest, and easiest, bang-for-your-home-improvement-buck there is. Even counter tops and cabinetry, while a bit costly, are easy cosmetic changes. Focus on the things that are the big-ticket structural items….electric, plumbing, roof, foundation (see #9). If the bones are good, you can turn any ugly duckling into a beautiful swan. Floor plan is also important here. Split levels are generally either tolerated or loathed. I don’t know anyone who says, “I’ve always dreamed of living in a split-level!” So, when it comes to resale value, look for a more traditional floor plan – a floor plan that’s a little less 1960s than the lovely split-level.
- The lights-out test. Spend some time in your potential neighborhood at night during the week, and at night on the weekends. The crazy comes out at night. And trust me, you want to know about the crazy before you sign your name to a 30-year commitment.
- Role-play your commute. Start in your desired neighborhood on a weekday morning, and test the typical commute to work. Do the reverse at the end of the day. Freeways that are wide-open during weekend house-hunting trips could be long parking lots during rush hour. (Hey, 101 freeway, I’m talkin’ to you!)
- Budgets are not all created equal. When I was renting, I thought I’d be able to afford a mortgage payment that was equal to, or more than, my current rent. I realized rather quickly (thanks to my brilliant real estate agent – see #7) that my home-owner-living budget would be very different than my rental-living budget. When I was renting, the apartment complex paid for water and garbage. If something broke, they fixed it. If something needed updating, they did it. And I didn’t have to worry about homeowner’s insurance or property taxes. As a homeowner, all that was on me. So, my new mortgage payment would need to be the same, or even less than, my current rent payment if I wanted to maintain the same standard of living.
- Don’t be house poor. Even though you may qualify for a larger loan, aim smaller to keep your mortgage/income ratio in check. Your monthly all-in mortgage payment (including insurance, taxes, etc.) should be less than 30% of your monthly income. In fact, I prefer closer to 20-25%, but that’s because I live very conservatively. And I like to travel. And I like to buy shoes.
- Your realtor should be your best friend and ally. Your realtor will be your main guide, your counselor, your mentor, your guru, during your house-buying adventure. Of course he/she should be honest and ethical. But he/she should also be someone you trust, someone you click with, someone who understands you, and someone you feel comfortable talking to. Ask friends for recommendations. And don’t feel shy about scheduling an interview to get to know your realtor before engaging them in your home search. A good realtor is worth their weight in gold. They are a wealth of knowledge and have an impressive list of contacts and referrals for everything from handyman services to dog sitting. I have been lucky enough to have found two amazing realtors for both my home purchases, and I wouldn’t have been able to get through the process without them.
- Start the home buying process early – waaayyy early. Months, even years, before you begin looking for a home, you should be laying the financial groundwork. Of course, everyone knows credit score is the biggest factor in determining if you’ll be approved for a home loan or not. So tackle that ugly little skeleton in your closet first. For some, it may be difficult to face. But once you deal with it and begin to see improvement, you’ll feel much better without that FICO monkey on your back. Second, begin setting money aside for a down payment. Depending on the type of loan you get, you’ll typically be asked to fork over anywhere from 10-20% of the purchase price as a down payment. (There may be some programs that are lower, but 10-20% is standard.) This money should have a paper trail for many months (anywhere from three months to a full year) before applying for a loan – meaning it should be clear to loan officers and underwriters where the money came from, and that it’s been there a while. If your bank account has a large influx of cash just before you apply for a loan, lenders will be suspicious. Did mom or dad write you a check? Are you transferring from one account to another to make your statements look bigger? Did you just rob a bank? The bottom line here is that lenders want to make sure you have the means to pay the loan back on your own – without the help of mom or dad or a black ski mask.As a side note – during escrow and the loan finalizing period, make sure you don’t have any “extra” deposits, and that any deposits are “normal” deposits (automatic payroll, etc.). When my bother was in escrow he returned an appliance to Bed, Bath, & Beyond and it was automatically refunded to his checking account. The unexpected deposit caused a red flag for the loan officer, and my brother had to write a letter explaining what the deposit was, even though his bank statement clearly read, “Refund – Bed, Bath, & Beyond.” Do yourself a favor – save all those returns until after you close.
- Invest in a good home inspection done by a good home inspector. A home inspection can unearth scary, costly, details about your potential new home. But the home inspection is only as good as the home inspector. Many states require home inspectors to be licensed and certified. But many states do not. So, depending on the state you’re in, someone can hang out a shingle and say they’re a home inspector with absolutely no training. And, even though your inspector may have a license, it doesn’t mean he’s great. It only means he passed a basic test. Do your homework. Ask your realtor (see #7). Check the BBB. And once you’ve found, interviewed, and hired a home inspector, attend the inspection with him (it’s usually a him). Ask questions. Take notes. Ask him to give you repair estimates and an idea of how long major items (water heater, furnace, air conditioner, roof, etc.) should be expected to last before needing repair/replacement.
- A new $3,000 kitchen counter is never a $3,000 kitchen counter. Industry experts tell you to figure in an additional 10% when creating a home renovation budget to allow for unexpected expenses. But my experience has proven that it should be more like 25%. When dealing with a pre-owned home, you never know what the previous home owner(s) did before you got there. So, opening walls can be a bit of an architectural adventure. Be prepared for the unexpected. Home improvements will sometimes take 25% more time and 25% more money than you expect, so pray for the best but be prepared for the worst. Oh – and get used to drywall dust – it will hang around for a long, long time.
- A bonus #11! I’ve listed a bunch of things to beware of here, so it may seem that becoming a homeowner isn’t worth it. But the truth is there is nothing quite like the feeling of actually owning your own home, the feeling of investing in yourself, of putting money back in your own pocket instead of someone else’s. I have now purchased two homes all by myself. I haven’t had a husband to do all the hard stuff for me. I haven’t had a second income to help pay for it. I haven’t had another person to lean on when things get overwhelming. And, as difficult as that may sound, it makes the victory that much more sweet. It’s empowering. It’s amazing. And I highly recommend it.
Go on, single girl, you can do it!