If you have been checking out my comments on some of the personal finance blogs you know that I mentioned that we are currently looking to buy our first home. Since Baby with Cents was born, one of our next goals was to look for home so we can be settle in and have a place for Baby with Cents to grow up and evolve from a baby into adulthood.
Our Current Living Situation
If you have read my expense reports, I mentioned that we are renting an in-law in the Outer Sunset in San Francisco. Luckily we got very low rent for this place around the time we were getting married. The landlord basically told us if we don’t throw any parties (even a small one with up to five people) then he will keep our rent at $1000 a month. We happily agreed to that and been living here ever since. We rarely invite people over and if we do it would only be at the most two other people.
We live in a prime area, a block away from the infamous Golden Gate Park where lots of tourists come to visit and numerous concerts, marathons, and picnics are held. We are also close to the beach as well where a lot of people get their jogging in and can get really crowded on a nice day with numerous beachgoers on top of the runners. But in terms of buying a home in this area, it can get really steep. A typical row home that is over 1000 square foot with 2 bedrooms and 2 baths can go between $800K to $900K. So we already eliminated the idea of trying to buy in our current area for that reason.
Our Down Payment
The low rent has helped us greatly in saving a good amount of funds for the past five years and has geared the both of us in putting a good amount of down payment for home in the Bay Area. We knew that we live in a HCOL(high cost of living) area and that meant taking a while to build that savings so we can be in a position where we can put a pretty good down payment and not to put the minimum down payment and face high monthly mortgage payments.
The House Search
We started to do some casual searching on the usual housing sites: Zillow, RedFin and Truila. We initially targeted a few cities around the SF Bay Area and wanted to find a single home that meets our needs: 2-3 bedroom with 2 baths and between 1K to 1.5K square feet. Our price range is between $500K (which is low in the Bay Area) to $700K but if we really like a particular home we will bid up to $750K.
During the latter part of 2016 we found some homes online that we liked and went to open houses but we both didn’t get that feeling of, “Yeah, I can picture this as our home.” It was more like, “It’s a nice place but there is something wrong with this, didn’t really like that” type of mood. It also didn’t help that the listing prices on some of these homes were really close to our price ceiling. That meant that even if we felt like placing a bid, we would easily get outbid given the high demand on homes in the Bay Area
In the beginning of this year, we started to be more aggressive in our search where we targeted specific cities where we really wanted to buy. Outside of location, we had the usual factors when looking for a home: proximity of good schools where Baby with Cents can attend, length of commute to work, great neighborhood and drive time to get to grocery stores, shopping malls and eatries(In N Out, hehe) .
This past spring, we found an area close to SF where we both loved and decided that we wanted to buy home there. We made an appointment to check out a home that was in the middle of flipping on a Sunday. After checking it out, we didn’t like it but driving through the area made us feel that it was a great place to have a home. The real estate agent that showed us the home lives in the area so that made us more intrigued since we can contact her about the positives and negatives of living over there.
After that visit, we focused our home search to that area. We also went through the pre-approval process to show that were really serious in buying one. We picked our primary bank to mortgage our home because they do have low interest rates and we didn’t feel the need to shop around for other lenders since we researched online and concluded that our bank was the right choice.
The pre-approval procedure is a thorough process but if you can get access to all your accounts pretty easily then the procedure will be simple. When you pick out a lender, they will ask you for everything that relates to your finances and identification. They want a copy of your identification, your last two years of your W-2s, paystub(s) from the last 30 days, and the last two months of all your bank statements and retirement accounts. They do this to verify that you have the financial backing to put at an adequate down payment and project that you can pay back the loan on the term you signed up for.
Nowadays, it’s pretty easy to access these statements since it’s available via pdf so you don’t need a stack full of paperwork to give to your lender.
After getting pre-approved, we searched for homes in the target area aggressively. Unfortunately, there were not a lot of listings in that specific area because for one, it is a small area which means the inventory is low and two, whenever there was a listing, it would be over our price range. Some of these homes were too big in terms of square footage for us and there were others that were in the somewhat in our target but it was more of wanting an extra bedroom, bathroom or more backyard space.
Our real estate agent that lives in the area where we want to buy would send us listings for that location. There was one occasion when she emailed us a home before it was listed but it ended up being too small for us. There’s a period of time where we wouldn’t receive any emails from her because of the lack of inventory
It can get a bit frustrating sometimes because we’re ready to buy we know that if we want to live in this particular area, we have to be patient with the circumstances of trying to buy over there. We think it’s perfect for us, the area has an elementary and middle school for Baby with Cents to attend and has great ratings and it has tight knit community where events are held such as 4th of July celebration, Xmas tree lighting, and BBQs where the whole community is invited. The only downside is that there are no grocery stores; we have to drive 10 minutes outside the area to go grocery shopping. But with all the great positives, we could live that negative.
As of today, we are still looking at that area for a home. Hopefully we can buy one real soon especially with prices possibly going down with winter approaching.
Readers, do you think we are taking the right approach in our home search? What was your experience when searching for a home? Please comment below!