Over the last couple months, I’ve been hinting that I’m getting ready to buy a home. This month marks the official crossover from thinking about buying a home to actually acquiring my future urban homestead. This is the first post in The Barefoot Home series: a series detailing my entire home-buying process.
For the last couple years, I’ve been living fairly transiently. Renting as a single, professional woman in a college town has been miserable. Due to rent raises, limited options, and the decision to pay off my debt, I lived in four different homes in the span of one year. When Andrew and I moved in together in our current abode, the decision was made purely based on location. I wanted to be close enough to bike to work – which ended up being awesome. Until I got promoted, and now my ride is much longer and thus – I admit – harder to motivate myself to do, especially in the cold. Now that our current apartment is less than ideally located, it’s losing all its appeal – fast. The construction is shitty, the windows are terrible, the roof leaks, it costs a fortune to heat, the carpet is gross, and there’s not enough storage space. Mind you, this place was built in 2006! I feel less and less at home here every day, and we know that we won’t stay here any longer than necessary. I feel homesick in the I-don’t-have-a-place-to-truly-call-home way.
I’m also homesick in the I’m-longing-for-a-house way. Now that my job situation has worked out quite well, I’m finally ready to settle down. I’ve wanted my own house for three years now. A place where I can dig out the entire nasty bermuda grass lawn and plant food. A place where I can experiment with DIY remodeling. A place where I can build the pantry and cellar I’ve always needed. I’ve been regularly watching the market and researching mortgage options for the last two years. This desire fades in and out, and at times becomes a fixation. I’ve gone through just about every possibility in my obsessive-planning head: buying an in town home vs. a country home, buying move-in ready vs. fixer upper, even buying a small plot and building custom from scratch. In a way, my unhealthy obsession with home-ownership is starting to pay off – I know exactly what neighborhoods I want to live in, what I want in a house, what amenities are worth … and I have years of data on home prices cataloged in my little head.
Through all this daydreaming, I had contented myself that I wanted to buy a near move-in ready home in town. Unfortunately, the market has other plans. In the last year alone, the town’s temperament has dramatically shifted from a buyer’s market to a seller’s market. Home prices, especially in in-town neighborhoods, have skyrocketed. I kept reassuring myself that everything would work out – I would find what I needed when the timing was right. Ha!
Turns out, I’m delusional. I got a serious reality check a couple weeks ago. A home in my price range ($110-130K), right by my office was listed around 8 PM. I scoped it out on my way to work the next morning, then tried to contact the realtor. Silence. Four hours later, I tried again, only to find out that the home had three contracts on it overnight and was sold by 8 AM – around the time I had cruised by. Holy shit.
Over the next couple weeks, I talked to a few agents, and heard the same thing – as a first time buyer, finding what I wanted at my price point was going to be damn near impossible. Realizing the neat little plans I had laid out simply weren’t going to work sent me into a tizzy. My thoughts were along the lines of: I HAD to find an in-town home! That was the plan! If this doesn’t happen, everything is doomed! No more early retirement! No more urban homestead! Suddenly buying a home has gone from an appealing process to a daunting one. In true Christine-mathematician-analytic-mind fashion, I started to rethink my options.
Our lease ends in July 2016. We don’t have any wiggle room on staying past then, due to the absurd student renting market where all leases run August-August. We will likely have to provide intent to renew or leave around February, and once we sign off, there’s no turning back. Due to our lease terms, subletting is probably not an option. Summer is the busiest time of year for parks and rec professionals, so I certainly do not want to push the limits on buying and moving in too close to the end of our lease. Given all this information, here are my options:
- Give up the dream of an in-town home, and start looking at homes 15 minutes from town. Once you get outside of “the loop” (our town’s outerbelt), home prices drop up to 50%. Since we are a college town of 100,000, living far out doesn’t necessarily mean a long commute. I could get from most of the small surrounding towns to Athens in under 15 minutes. Another perk is that many of these small towns are uber charming. But I REALLY want to be close enough to bike, at least in the spring, summer, and fall. I also don’t want to be too far from our friends and services, like grocery stores/ farmer’s market, our LHBS, the craft store, etc.
- Sit and wait for the right home to come up, knowing that it could get down to the wire. This option means I better have every duck in a row, beginning immediately. I will need to find a real estate attorney, get pre-approved for a loan, and watch like a hawk. I have two issues with this option – first, there’s no telling when the right home will arise. It could be tomorrow or it could be July 29th, and when it comes up I will have to move so fast. Being a first time home-buyer, this makes me uncomfortable. I don’t want to feel all that pressure to make offers without being able to think. Nor do I want to be reloading Zillow and Craigslsit every 30 minutes. The second issue is that I won’t have the full down payment for a home at the top of my price range until the end of April. So, if I do get pre-approved right now, I won’t be able to make offers on anything above $100K. Then, I’ll have to continually adjust my loan as I save more. This will look sketchy. Banks don’t seem to understand how a 26 year old can sustainably save %60 of her income. I definitely don’t want to go the route of PMI. Finally, I have to ask myself, what happens if it gets down to mid-July and we haven’t found anything? Like I’ve said before, crazy student housing market here, so most homes with August 1st leases will already be gone come July. We don’t have any friends or family in the area who could accommodate us and our pets after our lease ends. And I absolutely do not want to rent again for another year. Given all this, it’s hard for me to see the appeal.
- The last option is to go for a fixer upper. Our town is old (UGA was founded in 1785!), so fixer-uppers are plentiful here. A lot of people are flipping these houses for crazy profit. The timing is perfect – move-in ready homes are selling like hotcakes, while the fixer uppers sit around. Rates are low, but could start rising next year. Here’s my problem: I’m already insanely nervous about buying my first house, let alone buying a house that will need a lot of work! I’m young, and I don’t know what to look for! What makes a house a good candidate versus a waste of money? How can I predict how much work a home will need? And most importantly, how the hell will I do all remodeling work? I’m already overextended in terms of time management. Andrew and I have no experience with remodeling, other than projects I helped my family with growing up. But even then, I was just following directions.
Yesterday I went for a long hike to #OptOutside, and mulled everything over. In all my home-buying fantasies, I envisioned finding the perfect little cottage with a big backyard fit for chickens, bees, and veggies. It would be love at first sight. After years of this line of thinking, it’s funny to realize the home I buy could be run down and ugly! The best thing I can do for myself right now is to get past these emotionally charged ideas and starting thinking of this as a business acquisition. So while I hiked, I stripped away all the emotions and thought hard about what I really need.
I need a yard that receives good sunlight and is conducive to gardening. I need a home zoned residential/ business, or at least with the option to pursue this. I need at least two bedrooms, lots of storage, properly placed windows, and a big kitchen. I need a layout that flows. I need shade trees in the right places, and a roof that’s a good candidate for solar panels. And that’s why a fixer-upper is my best option.
- I’m a very picky person (especially when it comes to taste), and will likely end up redoing every room in my new home even if it’s move-in ready. As far as appliances, I will absolutely replace everything to resource-efficient options. Again, even if a home is move-in ready, it’s probably not going to have low-flow toilets and a freezer chest. I’m a big believer in quality, and unfortunately most move-in ready homes on the market here have cheap counters, cabinets, fixtures, and appliances. Since we practice so much self-provisioning that happens in the kitchen, I need a nice range stove, proper pantry space, and ample counter room.
- My list of what I need has much more to do with the “bones” of a house than specifics. Like I said above, I will change the specifics to meet my needs. But what I can’t change is proper circulation, the amount of sunlight the windows allow, the integrity of the foundation and the roof, and where the home is placed on the lot. The yard space is SUPER important too. I could care less about the current crappy landscaping; unless it happens to be native plants or fruit trees, I can guarantee you all of it will eventually get torn out. That being said, I don’t want to go through the headache removing a large tree that is shading the entire backyard or regrading a slope to make it usable. I also want to avoid new construction as much as possible, since it means all the native topsoil has been stripped.
- I could afford to buy a fixer-upper today. Fixer uppers in our area run $70-90K, and I have enough saved to comfortably cover a down payment and closing costs at this price, as well as have a few thousand leftover to begin renovations. Best part, with a mortgage this low, I could easily afford 15yr monthly payments on top of my current rent, with leftover $$ to invest in renovations. Then, once my current lease ends I could adjust mortgage payments to 10 years (probably even less). The only potential issue here is funding the renovations. If I do most of it myself, this hopefully shouldn’t be an issue, but there is a chance I would need to take out construction loan.
- If I bought a fixer upper in the next couple months, I would have six whole months to get it move in ready. For me, this means a flawless kitchen and a decent bathroom. I don’t mind if the rest of the rooms and the yard have to wait, but I cannot live with a crappy kitchen and bath. I think six months is a reasonable amount of time to DIY these two rooms, hopefully doing everything except electrical and plumbing myself to keep costs low.
- I am so very blessed with a mother who built her first home herself. She knows how to do just about everything, from flooring to installing tubs and toilets. Funny enough, she happens to be retiring in three weeks, and would probably love to assist with the renovations 🙂
- In the end, I will save a lot of money AND have the satisfaction of “doing it myself” if I go with a fixer upper. Honestly, that satisfaction is worth more to me than the potential savings.
This post is getting really long, so I’m going to end it by saying: I still have a lot to think about.