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3 Secrets of Buying a House

These are the Things They Don’t Tell You About the Process

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Buying a house for the first time is one of the most exciting experiences someone can go through. It’s also one of the scariest.

It’s an experience filled with plenty of uncertainty, and many, many unknowns.

Truthfully, there’s just such a learning curve that it’s really amazing I was ever even able to close on my first house at all.

There were so many hiccups along the way and things that I’d wished I’d been told about before I had started the process.

So today I wanted to share a few of those with you. Here are 3 things that people just don’t tell you about when you’re trying to buy a house.

Closing Costs

Usually when you are getting ready to buy a house, you are told that you need to save enough money for a down payment — and that’s true.

Though, it’s also true that there are extra costs that you might incur along the way. These costs might include inspection fees and closing costs.

Closing costs are fees that need to be paid to all third parties once the escrow period closes and the deal is done. Some of these fees may go towards paying title and insurance companies, excise taxes, and other miscellaneous fees.

In the past, it was often traditional for the seller to pay all of the closing costs for the sale of a home. Today, that’s not always the case.

Since closing costs can range in cost from 2% to 6% of the total sale price of the home, sellers will sometimes try to push this responsibility off onto buyers.

I know that doesn’t sound too encouraging, but the good news is that you can try to negotiate a better deal.

When you’re making your offer, you can always ask the seller to pay for all of the closing costs — or even ask to split them 50/50.

Likewise, the seller can always accept, reject, or counter your offer.

Of course, depending on if you are in a buyer’s market or a seller’s market, a seller may or may not be willing to compromise on this with you.

So, it’s always a good idea to save for more than just a down payment. It’s a very good idea to save for closing costs too — just in case.

Mortgage Payment

Once you buy your house the bills are pretty straightforward, right?

Wrong.

A lot of buyers are under the impression that their mortgage payment will stay the same over the course of 30-years. (*Assuming a purchase made with a 30-year fixed rate mortgage)

After all, your lender probably provided you with an amortized payment schedule at closing, which broke your payments down in exactly that way.

But the thing is, those “payments” on that schedule only account for your actual loan payments — the principle and interest.

They don’t account for property taxes, home insurance, or personal mortgage insurance.

Which is important because that bill from your lender that you receive each month will include those things in your monthly mortgage payment.

(Mortgage payments are made up of a few different elements: Principal, Interest, Taxes, and Insurance. These are commonly referred to as PITI.)

It’s important to know that unlike the principle and interest, these other charges are not fixed, they can go up or down at any given time.

Though, usually they will change either annually or bi-annually.

For example, your property taxes (and your mortgage payment) may increase if a new voter approved levy was passed by your community. Levies like these are often taxes used for public education or other community resources, like the fire department.

Sometimes a levy might expire without a replacement. This action would actually lower your property taxes, which would lower your monthly mortgage bill.

So just remember, your monthly payment will NOT stay the same. Be prepared for changes in the future — for better or for worse.

Negotiations

In our day to day lives we are so used to accepting things as they are.

Think about it, when we shop in stores the items are on the shelf with the price as listed. There is no bargaining, it just is what it is.

But not everything is this way in life.

Take it from Princess Leia herself —

“Everything is negotiable. Whether or not the negotiation is easy is another thing.”
— Carrie Fisher (Esquire Magazine, January 2002)

— and real estate is no exception.

Everything is negotiable in a real estate transaction. I mean everything.

Want the roof replaced? You can negotiate it.

Want the seller’s furniture? You can negotiate it.

Want the seller to pay for part of your down payment? You can negotiate it!

Does this mean that you’ll get what you ask for? Not necessarily.

There are so many different factors that contribute to whether or not you will be able to successfully negotiate a request, but the fact remains: you can always ask.

(For advanced negotiations, it’s a really good idea to make sure that you are working with a very skilled and very experienced real estate agent. You want someone that’s handled these situations before and knows what they are doing!)

Conclusion

As you can see, there’s often a little more than meets the eye to the whole home buying process.

These were just the top three things that I wish I was taught before I started shopping for my first house.

There’s always plenty more to learn though, so stay sharp, keep asking questions, and seek help from professionals when you need to.

This article was originally published on OhHeyItsRay.com

Oh Hey, It’s Ray is a real estate investor, entrepreneur, and former real estate agent. She lives happily with her husband and two children in the Pacific Northwest. See more from Ray at her YouTube channel and on Ohheyitsray.com