My other half and I bought a house just over a year ago. I tell people who are thinking about buying a house to learn from our mistakes. If it was going to go wrong, it went wrong for us. We got a lot of bad advice and guidance. I don’t want any of you to go through what we did. So I’ve collected all of our mistakes and am sharing them with all of you!
The market in the Triangle area of North Carolina is cut-throat and it took us over two years to find and close on a house. To make it worse, most houses on the market get 10-15 offers within 24 hours and you are expected to offer above asking. Even the biggest fixer-uppers receive $5000-$15000 over asking! I can’t tell you how many times we were on the way to view a house and we got a call that the owners accepted a bid over their list price.
This type of fast-pace market means there’s less time to focus on the decision making process. The time crunch puts pressure on everyone. Realtors pushed us to decide quick, viewings were cut short, and often bids were made without considering our budget. In a nutshell, the house buying process sucks.
- BE MORE PICKY!
- Don’t listen solely to your realtor or lender
- Don’t skimp on the inspections
- Do your research
- It’s okay to back out
The advice we got from every realtor we met when we were trying to find the right one was, “Pick your top 5 nonnegotiables, you can live with everything else!” WRONG. This is one of the biggest financial decisions you are going to make. You deserve to find the right house. This may mean taking more time, but at the end of the day, you need to be happy with your decision. If you have 15 must-haves, great! Again, it’s your money and your decision. Your realtor and lender shouldn’t pressure you into accepting something you are only mildly interested in.
This was hard for us. We wanted to trust our realtor and lender and felt like we should listen to their advice to “be less picky” and accept sub-par houses. It wasn’t until a friend told us, “Your realtor and lender work for you, and at the end of the day they are making money off of you.” That piece of advice changed my whole perspective. No matter how nice your realtor and lender are or how much they show you they care about you, they don’t make money unless you spend yours.
Now that we have been in our house for over a year, we are realizing how much we were lied to during the process. Here’s a short list of the lies we were told:
- Our New Home is Actually a Boomer: The seller’s realtor lied to us about the actual age of the home. We were told it was a brand new build. Come to find out that the construction company filed a “renovation permit” and not a new construction permit which then meant our “new” house is actually over 80 years old! (Everything but supposedly one wall of the basement was new *eye rolls*)
- The Lie That Cost Us 2k: The seller’s realtor told us our septic and well water system were also brand new. Our realtor said we probably didn’t need an inspection on both since they are brand new, so we skipped them thinking we’d save ourselves $500. One month after moving in we started seeing sediment in our sink. We had a free water test done and found out we needed a whole house water softener, neutralizer and filter put in and that our “new” well was actually original to the property. This mistake costs us $2,000 to get the system installed in our house.
- Tax Fraud, Enough Said: Our lender told us to apply for the North Carolina Home Advantage Tax Credit which would give use $2000 back in taxes each year. In order to do this, our lender said that we should only put one of us on the mortgage and deed and have the other use our parents’ address as our permanent address. This would keep us under the income threshold to be eligible for the credit. Well, we asked what happens if someone finds out we both live in the house and they said, “Well you can get audited and owe all that money back, but you can probably plead negligence.” I can’t make this stuff up. I’m sorry, but we are not about to commit tax fraud!
Moral of the story: Your realtor, the sellers’ realtor and your lender are all in the business of making money off of buyers, take everything they tell you with a grain of salt.
I mentioned our $2000 mistake above, but let’s take a closer look. The water and septic inspection would have cost us around $500 during the Due Diligence period. But we were told both the well and septic system were new. So why would we need an inspection, right? We couldn’t have been more wrong. Our well started pulling in a TON of sediment that clogged our coffee maker, stained our toilets and sinks, and started to erode our fixtures. We then had to find a company to come install a water softener and neutralizer system to avoid further damage.
If we had done the water/septic inspection, then we would have been able to negotiate this $2000 repair into due diligence repair requests. But we didn’t, we listened to others instead of ourselves. Remember folks, do all the inspections you can.
Two weeks after we moved in, we came home to wood stakes in our yard with measurements written on them. We had no idea who put them there, what the measurements were for, or why they were placed where they were. After some research, we found out that the city had plans to expand the road that is about 30 feet from our house to come 15 feet from our front door! The Department of Transportation (DOT) was pulling eminent domain on part of our front yard and there was nothing we could do about it. I sobbed. Our first home was going to have a road coming up so close to our front door.
We later found out that this was something that the sellers should have disclosed during our closing and our realtor should have researched during due diligence. They failed us and we failed us. I should have known better to do my own homework but I didn’t. Well, I took to the internet and searched for some help. I found some great eminent domain lawyers that would not charge any money unless they got us more money than what the DOT offered. Well, I guess the threat of a lawsuit was enough to have the DOT change their plans for the road expansion. They decided to use more of the vacant properties up the road from us, instead of taking land from us and our neighbors. After a year of not knowing what would happen, we got a letter from the lawyers that DOT would not be taking any of our property. I have never been so relieved!
One thing I didn’t mention was that we were actually under contract with another house prior to buying our home. That house was a fixer-upper, but had a lot of potential. It was on 4 acres of land which had a beautiful, large pond in the middle of it. We thought it was perfect. But, that didn’t last long.
Throughout the inspection process we found out the owners were pumping out all of the grey water from the house into the pond and creek, which fed into one of the largest lakes in our area. That meant the owners were contaminating not only their pond but also the nearby lake. The damage to the septic system that was causing the grey water problem would have costs us $50,000 to repair. While we were okay with a little fixer-upper, we weren’t prepared for a massive overhaul of not only the house, but also the property itself.
Due to the contamination and the septic issues, we decided to back out of the contract. We knew we’d lose our money on the inspections but thanks to some diligent research, I leveraged the issues on the sellers’ disclosures as a way to get our earnest money and due diligence money back from the sellers. While I know someone else bought that property, I just hope they take care of the environment and try to remedy all of the issues the sellers caused.
After going through all of this mess, my other half and I aren’t sure that we would have made the decision to buy if we knew everything we know now. We didn’t learn about F.I./R.E. until after we bought our home. I think we would have seriously considered House Hacking or continuing to rent. But hindsight is 20/20, and we can’t go back in time. So we are moving forward and trying to pay more than the minimum on our mortgage and reach financial independence in about 10 years.
My hope is: Learn from our mistakes and make the right decision for you. Home is the place where you build life you want to live. But, you don’t have to follow the crowd and buy the next house on the block. Rent, build a tiny home, buy the house; do what makes you happy and makes you feel more alive!