I Just Bought My First Home at Age 47 and This is What I've Learned
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I am bending over in the front yard, my right hand wrist-deep in water as I grope for what I hope is the manual shutoff valve to our sprinkler system. Until 30 minutes ago, I didn't even know there was such a device. But there I am, half-soaked and fumbling for I don't know what in a hole in the ground. Eventually, I find the valve and turn off the sprinklers. Now I know where that is, I tell myself as I go in search of dry clothes. Can't say I expected home ownership to include this sort of random Thursday afternoon incident. Then again, I've had a lot of firsts in the weeks and months since I decided it was time to make my American dream into a reality. Here's what I've learned so far…
I was one of those weirdos who knew his credit score at age 19 and was investing in a 401(k) when I was 22. So I knew from a fairly young age that good credit and money in the bank are important. There were plenty of setbacks over the years — an ill-advised graduate degree, a car I didn't need to buy, a couple layoffs and stock market crashes — that did a number on my nest egg over the years. But I'm glad I had the sense to keep my credit score high, because it translated into a prime-rate mortgage and a lower monthly payment. I'm also glad that I didn't limit my savings to 401(k)s. Yes, those are important. But that pre-tax money is darn hard to access for big expenses like a home if you're not retirement age. Alternatives like a Roth IRA, conservative mutual fund, and good old-fashioned cash are all much easier to access once it comes time to fork over that down payment. Knowing that I'd also need at least 10% down to keep my monthly payments manageable also helped keep me motivated to save.
My partner and I could have continued renting our small home in central Austin, Texas, indefinitely. We had awesome landlords, friends close by, and easy commutes. But after two decades of moving here and there, we were both ready to put down some roots. And the Austin real estate market is not going to be cooling off anytime soon. So the timing seemed right to buy. We knew we wouldn't be able to afford the neighborhood where we lived, but we thought we'd be able to live nearby. What neither of us realized was that real estate apps like Trulia — while great for getting a sense of what's out there — don't use local tax rates as the default in their online mortgage calculators. And in a state like Texas, which has a high property tax, just a few tenths of a percentage makes a big difference. Our hypothetical budget of $400,000 quickly shrank by $100,000 once we ran the numbers. And while we were preapproved for a mortgage of up to $800,000 (yes, you read the correctly), there was no way we afford the accompanying $4,000-per-month payments. Ultimately, that meant we'd only be able to afford a serious fixer-upper (minus the money to make those fixes) in the city's far reaches or purchase a new build in the suburbs. The burbs won out.
The single most important purchase I made during the entire house-buying process? A $10 accordion-style document file at the Container Store. I began with copies of all my financial paperwork that I needed for the loan. Everything I acquired during the house-hunting process went into it in chronological order: business cards, pricing sheets, the loan estimate, the home inspection report, a copy of our insurance policy, the U-Haul contract, the warranty for the big-ticket items we bought. Everything. The second most-important purchase? A cheap laser printer that cost about $150. Every single transaction we made was done digitally, and trying to hunt through a pile of emails in search of one specific paragraph in a PDF is just asking for gray hair.
The best advice our agent gave me? Don't take it personally. Something — possibly petty — is bound to set you off during the house-hunting process. And if you're not careful, it can sink the deal. (Our agent also related a personal story of a deal that collapsed as the closing papers were about to be signed. The buyer made some wisecrack about a feature of the house. The seller got offended. The deal was off.) In my case, it was having our admittedly lowball offer on a home get rejected with what I thought was a rather dismissive tone from the same builder's rep who had been badgering us to make a bid. (I also hate being called "sir," which he did throughout the buying process.) But in the end, none of that mattered. We made another offer, which was accepted, and the rep was super-helpful right through the day he handed us our keys.
In other words, ask questions, beginning with your search for a real estate agent and a mortgage provider. Neither has to be your short-term BFF, but if they're not willing to answer questions to your satisfaction, then you might want to keep looking. You're going to be confronted with more numbers and financial and legal jargon than you can imagine, and it's their job to help you navigate your way through the buying process. Ask about fees, dates, timelines, and take notes. And don't be afraid to ask: "Well, what would you do?" After move-in, stay curious. Get to know your neighbors, even if only by name. You could meet some great new friends or learn, as we did, about all the things the HOA doesn't tell you, like just how much of your front yard you're allowed to landscape.
The contract was signed, the deposit paid, the closing date set. We were chomping at the bit to move in and get on with our lives with a month to go before we could actually move in. Not that we let that minor issue stop us from buying stuff for the new house. And while a few of the purchases have been put to good use since — at half off list price, that set of five Crate & Barrel stools for the kitchen island on Craigslist was a true bargain — we soon found ourselves living in our cramped rental, surrounded by furniture we had no room for. We also bought a lot of junk — like cheap curtains — that ended up being a waste of money we could have spent later on big-ticket necessities like a washer and dryer and smaller must-haves like trash cans or a new lawn mower (something I confess I never expected to own one day).
Just when you think you can't wait any longer, it's move-in day. Thank the friends who accompanied you on endless house tours and listened to your freakouts. If they also helped you lug boxes or heavy furniture, buy them a good meal, too. If your parents helped you out, thank them, too. And don't forget your partner or significant other. You're bound to get stressed at some point and say or do something hurtful during the whole process. (I sure stuck my foot in my mouth once or twice.) Just remember: You're in this for the long haul, together.
Scott Nyerges is deputy editor and Austin bureau chief for Cheapism.
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