How To Buy A Home In 2022*
*When You're Halfway Down The Food Chain
On one particularly bleak afternoon this past spring, I found myself scrolling through the /r/FirstTimeHomeBuyer subreddit. I’d had yet another offer on a condo promptly rejected and my flower of hope was a-wiltin’.
My realtor told to me the winning offer covered an unlimited appraisal gap. That comes down to how much cash you have on hand, and I could not compete with that.
I was having flashbacks to the days right after college when I’d spend hours at the coffeeshop, crafting cover letters and applying to jobs, only to not even get a call back. Just as it was back then, it felt the people I was losing to were playing a different game than I was.
I searched “giving up” on the subreddit, which brought back a shocking amount of results. Reading others’ anguished stories offered some solace, and I was preparing to join them.
“I don’t need that poison in my life,” is what I said for years to explain why I didn’t want to try to buy a place. It started as an excuse, but there wound up being truth in it. To have your financial shortcomings thrown back in your face repeatedly makes you wretch.
If you are currently suffering this astonishingly busted housing market, I feel for you. It is super mega ass and all your frustrations are valid. If you’ve tried and given up, honestly, good for you. You don’t need this poison in your life, and there’s still a ton to love about renting.
I’ve long been repulsed by the idea of homeownership. It probably started when I was a teenager and it seemed like all my parents, and my friends’ parents, did on weekends was yard work. That has stuck with me, and I remain committed to never mowing another lawn for the rest of my days.
But when rent in Richmond started going through the roof, I figured it was worth my while to see if there were condos out there. All I’ve ever wanted is an apartment where I don’t have to worry about having rent go up 50 percent at random, and condos more or less offer that.
I closed out the threads and decided I had a few more rounds in me. I kept looking.
And against all odds, I did it. I bought a condo. It was, amazingly, only the second-luckiest thing to happen to me this year:
The good: I was able to get a place at asking price a week before interest rates jumped by nearly one point, and my place appraised high.
The bad: It is snug, if not small, I had to waive the inspection, and the condo fees are a bit high for my liking.
Mine is a story about dumb luck more than it is perseverance. This is not a one-size-fits-all guide. It is just what I did to get across the finish line. Here’s my probably already-outdated advice.
1. Don’t try to buy a house.
This might be region-specific, but the condo market in Richmond is quite a few Scoville units less spicy than the single-family market.
Shopping for a condo is still brutal, but it’s the difference between having to eat a ghost pepper versus taking it as a suppository. You’re not going to have fun either way, but there’s clearly an easier option.
If you’re not married to the idea of a single-family house, condo life is (so far!) pretty damn great. Also, with condos, making concessions vis-a-vis the inspection are easier to stomach since you’re not on the hook for any big problems that might come up.
2. Talk to a lender, then a realtor.
The first thing I did back in the winter was hit up a friend who works as a mortgage broker to get a feel for what my budget was.
Find out your absolute max budget is before you start seeing listings that get you excited but are — surprise! — going to be bid up to hell by the Charles Montgomery Burnses of your city.
3. Live with roommates until you’re 30.
This is not a joke. My down payment was pretty much entirely the money I’d saved all these years by shacking up with friends.
4. Call upon your emotional detachment at ALL TIMES.
In our initial meetings, I asked both my realtor and lender what the biggest, most common mistakes they see would-be buyers make, and got effectively the same answer.
People fall in love with places and decide they simply must have them. They get tunnel vision, make offers way outside their means and then live to regret it.
And I can’t blame them! It is so easy to fall prey to this type of thinking. I tried mightily to never let myself get too excited about a place, but damn is it hard. Try to develop a self-imposed shock collar for when you walk into a place that makes your heart sing.
5. Focus on timing and speed.
By the end, I learned the time is of the essence. The hard part is getting comfortable enough to: 1) learn of a place, 2) see it, then 3) decide to theoretically commit the most money you’ll ever spend on it, and 4) do all of the above over the course of a few hours.
I was the first showing and made the first offer on the unit that became mine.
I didn’t know if or when the sellers had other showings, but my offer was made to only be valid for about 18 hours. I wanted to show that I was ready to offer their asking price with favorable terms, but also instill in them some urgency. “A bird in the hand is worth two in the bush,” or something like that.
Maybe it’d have worked out even if I didn’t move with obnoxious alacrity. But I think it helped.
6. Find and embrace the runt of the litter.
Speaking of timing, the week my place hit the market, about five other, nicer, larger places also went up for sale.
I saw one of them, loved it, but I activated my emotional shock collar as mentioned in item #4. I knew it’d be too competitive. So I zeroed in on the smallest unit of the crop.
Don’t get me wrong, I am thrilled with my place and intend to live here for a long while. But it doesn’t have a top floor screened-in porch or a front patio view of Swan Lake, as some of the other places did.
After seeing what the places that did have those things sold for, I’m glad I focused my energy on the place that I had the highest likelihood of winning.
7. Roll the dice and cross your fingers.
Because unless you’re the owner of Springfield’s Nuclear Power Plant, you’re going to need to get lucky.
Great piece Mike. Enjoyed it