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My most important lesson related to house purchase occurred while my husband was in the Army. He had been in ROTC and went on active duty during the Vietnam War. Fortunately, he was stationed at the US Military Academy at West Point. We were both in graduate school at the time and lacked a car; my father drove us around so we could find housing in ONE day– Tom was too low ranking to qualify for on post housing. We had the minimal amount for a down payment on a modest house, and looked at a couple that we could have afforded and which would have been fine. We decided not to risk a buy and instead found a rental. We stayed at West Point for 3 years; during that time, we saw career army people buy and sell their houses. They rarely planned to stay put for more than 3 years. Nevertheless, they rapidly found houses they thought would “work” for them and bought them. Every junior officer we knew followed this plan, and sold at a profit when their tour was finished.
After the army stint, my husband took a job at the University of WI — Madison. We were not mid-westerners and did not plan to stay (we actually have for almost 50 years!) BUT this time we followed the “army way.” We drove to Wisconsin with one week to find a house that would work for us and our two young children The inventory available was very limited, but we found a 3 bedroom ranch that met our needs but was NOT our dream house. We stayed in that house for 5 years.
During our initial week looking for housing in Madison, we did identify the small neighborhood in which we wanted to live, but it took us five years to find a house there that we could afford. We were constantly outbid until we came upon a true fixer upper. We were the first people to tour the house and we offered the full asking price. Our offer had no contingencies — we did not have it inspected (it would never have passed!), we gambled we could sell the ranch house before the closing, and we just held our breath. We sold the ranch for about 25% more than we paid, and closed on both houses the same day! Forty-four years later, my husband and I still live in the fixer uppers.
The house over the years has required a lot of work — both do- it- yourself and bigger projects that were done by professional contractors. But the house in which we raised 3 kids still works well for us as empty nesters. Realtors often claim “location, location, location” are the 3 most important factors in real estate. I totally agree — today, my neighborhood is as hot as it was 44 years when we moved into it. But I would tell any first time home buyer to determine his/her non-negotiable– it might not be location for them– and then proceed from there. No house is going to be “perfect,” and it’s important not to be overwhelmed by a housing purchase. The lesson from West Point was that what you buy, you can also sell! That approach definitely does work!
Rick C crushed it below. Take a look.
I’ll take a little different spin. Never ask someone else if it’s a good time to buy a home. The market will do what it does, and buying a home really comes down to your situation, not the market. Timing the stock market is obviously a fool’s errand, but it’s even more perilous when trying to buy a home. Real estate markets heat up and slow down, but they rarely crash. You can’t sit around on the sidelines waiting for the market to come to you–particularly with historically low mortgage rates right now (3.0% for a 30yr fixed, 2.25% for a 15yr fixed).
So focus on where you think you’ll be in life in 5-10 years. If you think you’ll be somewhere else for a new job, buying a new home is not something you should look to do. If you plan to stay put and see little risk of moving, follow what Rick says!
Buying s house is one of life’s biggest challenges, and can lead to a lifetime of happiness, or bitter regret. The more effort you put in to researching your new home, the more likely you’ll get the former. I use a funneling system – start with a wide array of information and narrow it down to specific targets. Some things to consider: