Buying House Personal Finance Shopping TIps

My Journey in finding the right home

In my previous article on my journey in buying that first home, I covered the basics you need to get started in your search for that perfect home for you. Quickly recapping, you need to have your finances in order, get your pre-approval (which tells you how much house you can afford) and pick the right realtor to represent and assist you in your search. In this article, I’ll cover useful tools to use in finding the right home for you, inspecting/walk-around and comparing market rates at the time for similar properties.

Use the internet

In this digital age, the best way to find houses is the same way you shop for products – online. In Texas (where I’m buying), I used HAR primarily as it had all the information I needed. Zillow is another good source, but I found it to be not so effective in communicating all the information I needed. Additionally, with HAR, realtor’s have a section which has seller notes – this lets your agent know the status of the house, whether they’re still accepting offers and/or any final deadlines. You as a consumer do not see this particular section.

HAR is pretty easy to use, you can use the filters to exactly search for what you want – like year built, price range, area, bedrooms/bathrooms, etc. It is fairly comprehensive. They have a mobile app as well that does the same thing.

Additionally, if you’re working with a realtor, you can thoroughly discuss your specific needs with them and they can set up auto alerts that will notify you when a property matching your criteria is on the market.

Navigating the Zillow Premier Agent App and Your Leads | Zillow Premier  Agent

In my case, I was primarily after a 3Bedroom house constructed after 2011, with atleast 2 bathrooms and it had to be a single floor layout. Additionally, I wanted a decent enough lot size so that I had a decent sized backyard.

Checking out listings

Once I had everything setup, I personally checked out almost every property in my area of choice to understand how they varied from one another. Additionally since it was my first time looking at houses as opposed to apartments, there were a lot more things to keep in mind.

My agent was very patient in this process and I appreciated his feedback on every property – after a few visits he had a much better and clearer idea of what I was looking for – which constantly changes initially but settles once you’ve seen a few homes.

My initial budget was $300K and honestly, in this market (during COVID-19), I was struggling to find anything remotely close to that but I still kept looking. It is also important to point out here, it doesn’t hurt to check out a property slightly over your budget also to see what you’re potentially missing out on – but that doesn’t mean that is your new budget. It doesn’t matter if you fell in love with a house but it’s monthly costs are over 60% of your take-home pay – that is when you start restricting yourself financially (and not a prudent choice). You want your DTI to be less than 35% including any other debts (like your auto or student loans – if any) otherwise you take on higher risk/burden.

Debt-to-Income Ratio Calculator for Mortgage Approval: DTI Calculator
Image from Mortgage Calculator

Before you go in to visit a home, make sure you fully understand the costs involved if you were to close on that home. This is where you can decide if a 30yr/15yr works better and the closing costs across lenders. I personally would use as their website would automatically provide the estimates based on address and amount.

When you do want to check out a property, make sure you have a good idea about the dimensions of the living space, bedrooms, restrooms, etc… . Take a measuring tape and masking/blue tape with you to mark where potential furniture may go (have the furniture measurements handy – if you have furniture). An empty house always looks bigger than it is and one with furniture looks smaller than it is so best to map everything out.

Living Room Decorating Progress - The Sunny Side Up Blog

Take plenty of pictures at angles (especially for walls/ceilings) because paint differences are more noticeable in pictures than by the naked eye sometimes. Watch out for deformities, variation in paint pattern, bulge spots (for leaks), cracks or chips, etc… . You realtor should definitely point out all these things to you both inside and outside the house. Their experience will help you identify minor and potentially major visible issues. Upon closing on any house, you should always hire an inspector to fully inspect the house as they will find things your realtor and you may not. It is money well spent (~300-1000 depending on size of house).

The Home Inspection: Do's and Don'ts for Home Buyers - NerdWallet

Find out as much info about the house as you can, such as (but not limited to):

  • Warranties on building/foundation/appliances etc…
  • Any major repair work recently performed
  • Any flood/hail/roofing/burst pipe damage
  • Any legal disputes w.r.t the house
  • Condition of fences, irrigation systems if any
  • HVAC systems and leaks
  • Sellers disclosure (this should include all the major things)

When it comes to buying a house, no question is a bad question.

Comparing Market Rates

HAR will provide estimates of houses near the one you’re looking at but those are not set in stone. In a sellers market, property estimates, tax appraised values and actual selling price of homes can drastically vary. In this hyper-inflated market in Houston, TX, I am noticing an average list price of $30k over what the estimate/tax appraisal says and the offers are on average $30K over the list price due to a bidding war on an amazing property. Do note, this may seem exaggerated but that is the situation of the housing market right now and these are on the more conservative side.

Homes selling above asking price in LA dropped 6 percent in 2019

One thing that I have found out that is a good to know is that most new construction houses listed directly by the builder on their websites or any realtor site, are sold on a first come first serve basis – which means no bidding wars. Additionally, many sellers will offer you seller credits if you pick their preferred lender as opposed to use your own. I will get more into the financing side and cost breakdown in my next article, using a tool I created in this house hunting process which helped me decide which way to go when I booked a new construction home for myself.

Yes, after checking out multiple listings of properties built from 2010-2015 under/around $300,000 I grew tired of the bidding war and ended up picking a place in a newly developed area which turned out better for me location wise and from a resell-ability/rentability standpoint.

I will shed more light in my next article on the property I chose, why it made sense to me and all the finance related decision-making that went into it.

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