This month I finally (finally!) moved into my first house. Everyone keeps asking me what the buying process is actually like. I’ll be honest, it wasn’t a walk in the park. Buying a house in your 20s, you’re going to get a lot of people remarking on how young you are.
Here are a few quick tips if you’re buying in your twenties…
1. Sit down with an expert
At 25, I don’t yet consider myself great with money. I’m still in that stage of rewarding myself with Amazon Prime Now deliveries of chocolates and makeup. I didn’t start the process of buying a house until February 2017. For me, that was the right time, but I was still nervous about my money. Having that first meeting with the financial advisor was the best thing I’ve ever done.
No amount of research into the home buying process could help me get my head around how it actually worked. I had to ask the mortgage advisor a lot of stupid questions before everything clicked.
2. Become well versed in paperwork
There is paperwork for everything. Paperwork about borders of land you’re buying, paperwork about your life insurance, paperwork about your will, paperwork about your home insurance. Basically, you need to get a good filing system.
Closing costs (or stamp duty) add extra to your fees before you complete and can call the house yours. In the UK, stamp duty is higher for properties worth over £250,000. Then there are solicitor fees, we paid extra to have the highest level of checks on the property so they could tell us if there were any dangerous materials if the walls were cracking and if there was anything we need to take care of as a priority. All those additional costs (check your homeowners’ association fees too) should add up to around 25%-35% of your income.
3. Be a negotiator
Don’t go big, start with a small first offer. And negotiate, always. I had to give four offers before one was accepted, but the negotiation wasn’t over. The next step is negotiating dates to move in, that was a real nightmare.
In the UK, you set an exchange date where your solicitor passes contracts with the other people in the chain. We were told this would be in April, then May, then June 17th, then July, then August. It happened a week before we completed and got the keys. It’s different depending on where you live, and in the US your realtor will do some of the back and forth for you.
4. Don’t make rash decisions
Shop around. I saw a few houses, and if I’d gone with the first ones we’d seen because they were nice and the area was pretty, I’d be pretty unhappy now. The house I bought has excellent commuter links, the ones I originally liked were way too far away. I thought I was right and that we just had to get out and get our own place, but taking the time to look around was really worth it.
Most realtors and investors say that one of the most common things first time buyers will do is rush into things when they see a house they like in their price range. It pays to think like an experienced buyer.
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