Before finding the "perfect" house, I searched on and off for about 3 years in different areas. As it turns out, I wasn't financially ready to buy anyway so it didn't make much difference. However, I'm glad I took the time to look at everything and anything available because it made me aware of how many garbage houses there are here in Michigan. Sure you can pick up a house for $10k right now given the market, but trust me, I've seen them and you'd be better off spending that $10k to buy your very own WNBA team. They would look about as ugly but at least most of those ladies wouldn't smell like cat urine. Most..
Step 1: Get a good realtor! If you're like me, you know nothing about anything so why try to do this on your own??
How to recognize a GREAT realtor: He or she will show you house after crappy little house in whatever measly price range you can afford without trying to push the sale on any of them. If you're in the Grand Rapids area, Dave Deverman is the best there is. I put this guy through the ringer and he never once showed me a house that was too expensive for me or that I didn't ask to see. Looking at houses is very exciting and I was like a puppy with a hard-on at every single one we went to. The cracked walls, flooded basements, terrifying neighborhoods, moldy ceilings, and termite tunnels all "added character" in my eyes. Thanks be to Dave, Amen, and Amen...
Caution: Beware of short sales! Everyone out there is looking for the deal of the century. We hear tales of million dollar homes selling for $5,000 at auction. In my experiences, these "deals" are frustrating and rarely pan out. I found a house in the neighborhood I wanted listed at a great price, but it was a short sale. If you're unfamiliar with a short sale, here is my understanding of what it means:
Short Sale: The owner of the home is no longer able to make mortgage payments and is on the fast track to foreclosure. As a last-ditch effort, they list the house for less money than what they currently owe the bank. When a buyer steps in and makes an offer, the seller will accept it but then it is up to the bank to approve the sale and accept less money than what the house is worth. In a logical person's mind, it makes sense for the bank to take less money on the house than to take no money and go to foreclosure. However, there are no logical people working at any banks in the United States. I heard a rumor of one working at the International Bank of Puerto Rico which is technically part of the U.S. but I'm sure the rumors aren't true.
So, Dave and I put in an offer on said short sale. Then we waited. And waited. And waited... After 6 months of nothing, we finally heard back from the bank who wanted $8k more than my original offer. So, I declined and now I know two things in this life for certain: 1. Never get caught in a short sale, and 2. you can lick a 9-volt battery but licking a car battery is not recommended.
Step 2: Get pre-approved for your mortgage and stick to a price range you know you can afford. There are plenty of lenders out there that will approve you for way more than you're comfortable with so make sure you trust whoever you're working with and keep your search within your means.
Again, if you're in Grand Rapids, Bob Hein with Priority Mortgage is another super-hero in the housing game. I have never had a credit card, student loan, auto loan, or any other type of debt that might give me a glimpse of a credit score yet Bob was able to get me approved for my mortgage. The man works miracles and now I have a mortgage with a very low interest rate and I am comfortably able to make my payment each month. He is the MacGyver of mortgage lending.
Step 3: Buy the first house you see within your price range. Ok, maybe not, but if you find a house that is a good price, in a good neighborhood, and has all the features you're looking for, why not make the leap? Don't drag your feet waiting for that "you'll just know" moment. There is no perfect house and no one is going to tell you which one is right. Like Nike used to say, "Just Do It, Ya Wuss".
Step 4: Pay for a good inspection and be there for it! Having paid for 2 good inspections in the last 6 months I can make another recommendation for the Grand Rapids area. HouseMasters does very detailed work and send very knowledgeable people to perform their inspections. I learned more in those 3 hours listening to the inspector than I learned in 4 years of college. I suppose it's easy to beat learning how to drink 5 beers at once out of a frisbee though. I had a wonderful professor, thanks Paul!
Step 5: Sign your life away. It took me 4 hours to sign all those papers on the day of the closing, mostly because I wet my pants twice out of pure terror. It's not that I was scared of the payments or that the house wasn't in good shape because I had gone through the right steps to ensure those things would be ok. What scared me was the thought of me being responsible for something like this. The first thing my friend Mike said to me when I showed him pictures of the house was, "that's way too nice of a house for you, you're going to f#@* it up!" He might be right... One time my friend Tom left me to care for his pet mice. While he was away, the two mice produced 8 more mice, then those mice produced5-9 more each. Only about 6 of them survived because the others were so inbred that they would shake violently and die within their first 2 days. Tom didn't tell me much about how to prevent this, I just figured that since they were brother and sister, they wouldn't do... THAT to each other! Anyway, long story short, I'm not good at taking care of things, living or not.
Step 6: The adventure begins...
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