As a first time home buyer, here’s what I learned buying my house

Stressful? Yes.

But it was also a fun and exciting process.

I’d never given much thought to buying a house. I saw renting as a long-term thing and believed I wouldn’t buy a house until “later,” whenever that was.

But then I was out with some friends one night driving around town, and we saw a house for sale. They told me I should buy it. I, of course, said no way. I’m not adult enough nor financially prepared for something like that. Fast forward to the following week and I’m hardcore looking at houses.

Entering the real estate world, I knew absolutely nothing other than I’m supposed to have a down payment. What’s PMI, you ask? Never heard of it. Escrow? Due diligence? I’m lost!

I felt dumb not knowing any of this — but by the time I closed on the house, I felt like I could go into real estate.

Here’s what I learned.

The initial search is the fun part.

So, first things first, I found a real estate agent who goes to my church to help me. Second, I filled out a mortgage application with my credit union. I find out I’m qualified for up to $200,000. Sounds great!

I initially start looking on the East Side-ish (Plaza Midwood, Cotswold, NoDa, Windsor Park, etc.) but I discover that there are very few houses in that price range. The ones that are, aren’t in great condition.

I quickly find a few that I like, however, including one in Cotswold that I considered putting an offer on. Problem is, with homes in that price range, they get multiple offers pretty much the day they go on the market. Come to find out that house in Cotswold already had like 5 offers. Bummer.

At the encouragement of those same friends and my realtor, I start looking at the west side.

As someone who had lived in the Commonwealth area for three years, I honestly didn’t know too much about the west side other than Pinky’s and Picante. I found a couple of houses I like and my realtor and I check them out.

One was beautiful and just the right size with a great new fence, but it was in a flood plain. Another was bigger and I thought it was great — but my realtor pointed out that the renovations weren’t quality and the floor dipped in certain places. I would never have noticed that!

So, I find a house in the Revolution Park neighborhood that looks beautiful and was going on the market later that week. We got an appointment first thing the day it opened, and I loved it.

Perfect size, built in the 40’s, beautifully renovated and 10 minutes from Uptown. Now knowing that you have to act fast, my realtor put together the paperwork and I offer the asking price. She sends it and we wait and pray. I find out the next day that after multiple offers were submitted, mine was accepted.

Celebrations! Now what?

Inspections and appraisal — the not so fun part.

The next 45 days are a bit of a rollercoaster.

I let my bank know the offer was accepted and they start getting things together on their end. The offer I put in included $500 in earnest money and $1,500 in due diligence money. I write those checks and give to my realtor.

Earnest money is a deposit made to the home-seller showing that you’re serious about buying it. Due diligence money. It compensates the seller if you flake out. Due diligence money compensates the seller for taking the home off the market while you get it all inspected. Both generally get credited as part of the purchase price.

The house has to be inspected, appraised and the land has to be surveyed.

Inspection is first and most things are good. The crawlspace needs some work and the roof needs ventilation. The seller agrees to make the repairs.

But then the appraisal comes back and it’s $30,000 lower than asking price. DOOM. I freak out on the inside but try to appear calm and composed. Banks generally won’t lend money on a house that’s underwater.

Realtor to the rescue. My realtor worked with the bank to get a second opinion and another appraisal is ordered. It comes back at the asking price. Celebrations again!

Closing day is the big one.

My realtor and I meet with the lawyer and I sign my name what felt like 100 times. Next day I get the keys and move in that weekend. Hooray!

Here were my total up-front costs on my $163,000 home purchase

I ended up going with a 7/1 ARM Loan — which means after 7 years the rate could adjust up or down at that point. My mortgage payments complete with the taxes, insurance and PMI included is $905 per month.

So far, with utilities included that comes to about $1,080 per month.

Katie wrote an article back in December titled “Rent or buy in Charlotte? I choose rent.” While I completely understand where she’s coming from, I found that I could have a 1,000-plus-square-foot house with a good-sized yard, be close to Uptown and pay half as much as South Enders who live a mile away and rent. I’m also building equity and I foresee the value of my home to definitely go up in the coming years.

I chose “buy,” and two months in, I can say that I’m very happy I did.