On this blog, and in real life too, I’m pretty open about the fact that I’m a single girl buying houses…and flipping them. If you aren’t a single girl, the weight of that sentence means absolutely nothing to you. But if you are, you understand none of that is easy. Whether it’s the emotional side or financial side, it can be a daunting and overwhelming task to pull the trigger on buying real estate with only one income.
Regardless if it’s daunting and overwhelming, it can be liberating and fruitful to own real estate. Of course, this isn’t a guarantee. You may not want the journey I’m on…I know a lot of people who don’t. Maybe you’re not looking to move every two years. Maybe you aren’t looking to do total gut jobs. Maybe you aren’t looking to supervise and/or fire contractors. I get it. It’s not for everyone.
But owning a home doesn’t necessarily have to entail all of that (although I’ve preached the benefits of all of that before).
Whether you’re fresh out of college or thinking about retirement and you find yourself as a single gal thinking about buying a house, here are a few pointers to help you in the journey.
- MEET WITH A BANKER BEFORE YOU FIND THE HOUSE.
Buying a house relies solely on your finances, and while you may think you have your finances in order, a banker/loan officer will give you a very realistic analysis of your current financial situation. Sometimes that analysis is that it’s not the right time to buy a house until you clean up your credit or pay off bills. Other times that analysis may be that you can buy a house but you have to stay under a certain limit.
- MAKE A LIST OF NON-NEGOTIABLES AND MAKE A SEPARATE LIST OF NEGOTIABLES IN A HOUSE.
Your non-negotaible list shouldn’t include stone harvested from Italy or some other ridiculous desire. My advice when you’re making these two separate lists is that your negotiable list should be much longer than your non-negotiable list. Non-negotiables should be something like at least 2 bedrooms, not in a flood zone, etc. Negotiables could be something like fenced yard, walking distance to trails, etc.
- AVOID HAVING FRIENDS OR FAMILY CO-SIGN
Maybe after meeting with your banker, the analysis you received wasn’t the one you were hoping to get. They may have even suggested that if Dad co-signs, then you could get approved or you could get approved for more money. Sounds so tempting, right? I’ve been fortunate, my credit has gotten me as far as it has gotten me on my own. But, as a Realtor, I’ve seen the co-sign thing backfire time and time again. I view it as strings attached…and anytime business is mixed with family [or friends] it rarely proves to be a good thing. If things go badly, you lose your job, etc. and you can no longer make your payments, guess who takes the hit? The person that co-signed. So making a difficult situation even worse. If you can’t swing it on your own, YOU CAN’T SWING IT. Period.
- UNDERSTAND REALITY AND BE PREPARED TO COMPROMISE
Unless you have some amazing six figure job with no student loan debt, be prepared that as a single person with only one income, your pre-approval amount is probably not going to get you a house on the Parade of Homes tour. That can mean one of several things- you may have to buy a fixer upper, you may have to compromise even on your non-negotiables list, or you may have a much smaller house (or even settle for a town home or condo). Rarely do I see first time home buyers that are single walk in and buy their dream home. If you aren’t ready to settle, you probably aren’t ready to buy.
- MEET YOUR NEW LANDLORD: YOU.
As a Realtor, our firm manages several rentals. When the hot water tank leaks at 11pm on Sunday night or the AC goes out Saturday morning, guess who they call? Us- the landlords. And that is one of the benefits of renting- avoiding a lot of the maintenance responsibility. You lose that luxury once you decide to own a home. You will have to handle keeping your termite contract up to date, you will have to determine if you should replace your 15 year old AC unit, or what type of roof to install after you had to file an insurance claim. I frequently joke to clients: Welcome to the joys of home ownership. Those “joys” can suck a lot. If you have Dad around or friends, obviously you can utilize that assistance. Just remember, YOU are on the financial hook now for all of the maintenance.
- WORK WITH A REALTOR
If you’re just starting out and getting your feet wet in this real estate world, accept that you don’t know everything. And those things you don’t know can screw you. Working with a Realtor to buy a home is free to you– at least with my firm. You get the professional benefits of negotiating, legality, and assistance without having to pay for it. A Realtor worth his or her salt will be monumentally beneficial to you in this process. A good Realtor will see to it that you aren’t paying too much for a home, he or she will point out upcoming maintenance items that would need to be addressed in a home, and will handle the transaction and escrow period, not to mention negotiating on your behalf. Find a Realtor that isn’t viewing you as another paycheck or #, but a Realtor that makes you feel like you are the most important client they have–even if you’re only approved for $100,000.
- BRING A FRIEND
When working with single clients, they quite frequently bring their best friend, their Dad, or a coworker. I welcome that, and I think it’s a great idea to have as many eyes on a property before you sign on the dotted line. While it may be tempting to fall head over heels in love with a house because it has a farm house sink and shiplap, you want that friend or relative that you bring to clip your wings if needed. Yes, the house has shiplap, but it also has sagging ceilings. Yes, it has a farmhouse sink but it also has a family of termites. You want a friend/relative that will encourage you in the process but WON’T tell you everything you want to hear….they will give you a good dose of reality.
- DON’T BUY A HOUSE WITH YOUR BOYFRIEND.
I could write a novel on this one. I know, your boyfriend is wonderful…honestly, the greatest thing since sliced bread. You’re in heaven. He’s perfect. You’re going to marry him. I know, I know. There’s a snowball’s chance in hell you guys will break up, so it must be okay to buy a house with him. WRONG. This isn’t a morality lecture. Honestly, my objections do not lie with whether someone thinks it’s morally wrong or not. My objections lie with protecting your investment and your finances. While Mr. Wonderful might be wonderful, he is NOT legally committed to you. If someone is not legally committed to you, why have them financially committed to you? If (and my skeptical side says WHEN) Mr. Wonderful becomes Mr. NOT Wonderful, who gets the house? Who pays the mortgage? Courts are designed to handle this for legally bound couples….it’s called divorce court. Courts aren’t set up to handle when a boyfriend and girlfriend decide to play house and committed their finances to each other before they committed their lives. Plus, maybe it’s just me, it feels so much damn better to say “I own that…all by myself!”
- BE REALISTIC. BE FLEXIBLE
Nationwide, we’re in a seller’s market. That means, you’re probably going to pay more because there aren’t enough houses on the market to meet the intense demand. So if you give a low ball offer, be realistic in your expectations: it’s probably going to get rejected. If your Realtor wants to show you a great house 3 miles from your desired area, be realistic- your desired area may be too expensive or might not having any houses for sale. The process of buying a first home can be stressful, but the more unrealistic you are, the more unbearable the process becomes….for you, your Realtor, and the seller.
- DO YOUR MATH
To me, this part is not fun, but it’s the most important. Whether you’re offering full price or below, before you sign that offer, you & your Realtor should sit down and you should know a ballpark figure of what your house payment will be. In that same discussion, you should know, down to the penny, how much you’re putting down and where it’s coming from. The day you write the offer, call your loan officer and find out what the day’s interest rate is…make sure you ask if it’s fixed or adjustable. Other sneaky costs: down payments. While you can ask for a seller to pay for them, in this market, it’s not a guarantee. Your Realtor can give you a good idea of closing costs to buy a house. Be prepared financially to pay that. In all of your math, you should have enough money on hand to pay closing costs, down payment, and even moving costs. It’s essential that you have a realistic ballpark figure for all of those BEFORE you submit the offer!
I think it’s awesome and totally girl-boss to branch out into home ownership on your own! It really is such a sense of pride and accomplishment to do it on your own. Just make sure you’re doing it on your own in a smart way!
If you’re a single gal about to branch out and buy your first house, be sure you tell me about it! I love hearing other’s experiences!