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We’re Buying A House (Maybe)

We haven’t covered it much on Bargaineering (you might have guessed given the increased interest in credit scores), but we’re buying a new home. We submitted an offer a little while ago and after a little back and forth, it was accepted. We’re buying a house about ten minutes south of where we live now and while we aren’t excited about packing up and moving, we are really excited about the home itself.

Bargaineering was around when we bought our first house and we chronicled the entire process [3]. A lot of it is mundane, downright boring if you’ve already done this yourself, but at the time it was all new to us. Getting pre-approval, while much easier then, hasn’t changed much except for how much paperwork you need to submit. Back then you typed a few numbers on a form and you were in! That’s why I didn’t write much about the process this time around – it wasn’t that much different and it wasn’t a completely new experience for us.

That said, in the last eight years, some things have changed…

Redfin vs. a Realtor

When we bought our first house, we worked with a friend of mine who just became a real estate agent – Christina Elliott [4] (she was with Century 21 at the time I think, then partnered with Keller Williams). Redfin didn’t exist back then (or at least in our area) and so she would send me some listings and we’d visit the homes. We visited probably around fifty homes over the course of a few months and it was exhausting.

This time around, with Redfin and its great search features, we were able to get a better sense of how much homes were in the area we liked. She would send me listings as they appeared and was my conduit into listings on the MLS and with the research we did on our own, we visited only around fifteen homes. We were much pickier this time around too, so we didn’t go to a home unless we already liked it.

I’ll go into this in greater detail (Redfin vs. Real Estate Agent) in a future post but there’s a big difference between working with a Redfin agent [5] and working with a traditional real estate agent.

Fewer Homes

The stories about the real estate market being soft or slow are all true, but it’s picking up. A lot. I’ve heard stories of homes that get sold within hours. It’s like 2005 all over again! Part of it is supply, there simply aren’t a lot of houses out there. I don’t know if it’s because people are underwater or they aren’t thinking about selling, but there just aren’t a lot of homes coming onto the market. It’s now May, we’re fairly deep into the “nice weather” Spring period and we didn’t see an “explosion” of home listings when we exited the cold of winter.

The end result of this was that the homes that are coming on the market are selling fairly quickly and at very good prices. But it’s said that real estate is local so what happens here may not hold true near you.

Loans Require Lots of Documentation

Loans always require a lot of documentation but it seems like this time around the list has gotten a lot longer. So far we’ve had to provide W2’s, paystubs, bank statements (showing down payment plus 9 months of mortgage payments), proof of homeowners insurance, two years of tax returns, two years of business tax returns, two months of every account that paid out interest or dividends, and letters of explanation for a variety of little things. If there are any irregular transactions on the bank statements, we have to provide the associated account statement as well. The statements have to be official statements and can’t be screenshots or cropped photos.

I’m More Confident

Eight years ago, I didn’t do much in terms of trying to save money on the purchase. Outside of comparing lender costs, I went with whatever was recommended. This time around, and they’re minor savings in the grand scheme, I was more confident in the process to do some things a little smarter. For example, we wanted to radon test the home and the inspector said a radon test would cost $135. We purchased a $35 kit from the Radon Testing Corporation of America and tested it that way. The house is on well water so there’s a water test, inspector quoted us $235 and we found an actual water testing company that would do it for $100. These are all minor savings in the price of the home but instead of just going with whatever was presented, I did more homework.

We haven’t reached settlement yet, that won’t be until June, but we’ve gotten over the major hurdles.

(Credit: WCampos3 [6])