Being first time home buyers is exciting, but two things happened to me over the last week that reminded me how Realtors like myself need to remember that there are many unrealistic expectations we face. Last week on Tuned-In Realtor, I was joking about HGTV. Many of their shows take first time home buyers to tour homes. Inevitably, the show will start with the buyers saying "our budget is $250,000." But the end of the show, it's "so we ended up taking the house listed at $462,000 but we negotiated down to $317,000."
What Does HGTV Not Tell You?
First of all, if your budget is $250,000, then there is NO WAY you can afford $317,000. And how did your agent even let you start looking at $462,000?!?!?! But these shows never give the details about stuff like that. It could be they inherited money. Or that their salaries allowed them to have a much higher number but they didn't want to spend that much. But to the first time buyer watching that, a "budget" is nothing more than a random number that can be adjusted by hundreds of thousands of dollars. That's dangerous because it sets an unrealistic goal of what you can actually afford. (Spoiler: most $400,000 homes are nicer than $250,000 homes).Second, if your negotiation took you from $462,000 to $317,000, something MAJOR happened with that property. Foundation issue? Major construction flaw? Those would just be the top of the list. And those shows don't tell you how the buyer spent $150,000 to fix something that the seller had no intention of doing but was willing to massively lower the price to dump the property.It is important to understand those things before you buy. No one budgets or negotiates those kind of numbers without some sort of story. This is why it's so important to not only have an agent on your side, but a competent lender and escrow agent. So that was the first thing. This week, I came across an article about first time buyers in 2021. And this part really hit me:
WAIT BEFORE YOU CELEBRATE
Your offer was accepted? Great! Just remember that the home inspection and lender’s appraisal are coming next, and either of them can knock the deal awry. The more excited you get about the seller giving your offer a thumbs-up, the more disappointed you’ll be if you have to give the deal a thumbs-down after the inspection or appraisal.
This is so key! When the offer is accepted, you just BEGAN the process. Touring homes and finding one you like is the fun part. The hard part of home buying is what comes next. What if the appraisal says the house isn't worth what you offered? Here in Houston, the ground is perfect (in a bad way) for foundations to move around. So the inspection could discover something you don't want to pay for AND the seller isn't willing to budge on price. Until you get those keys, being under contract can be the most stressful time in your life! And there's nothing you can do but be ready for some anxiety. (Don't worry though...most of the time it works out!)
Fortunately, you were smart enough to find a great Realtor to assist you through all this, right??? 😉