Four Atypical Things to Do Before Buying a House

Most articles focus on the financial nuts and bolts of the things you should have in order before you consider buying a home. You’ve got to have good credit. You’ve got to have a down payment. You’ve got to know the housing market. And so on.

Yet those aren’t the only important things to be thinking about. Here are four somewhat unorthodox things I would strongly suggest any prospective homeowner seriously tackle before buying a home.

Save a significant amount each month like clockwork for at least two years.

A mortgage payment requires financial discipline as well as enough money, period. Can you cover the mortgage? The insurance? The taxes? The constant expenses that go with homeownership?

Use a mortgage calculator to figure up what your monthly mortgage payment will be. Tack 50% on top of that for insurance, taxes, and other expenses. Subtract your current monthly rent payment from that.

If you can’t save that amount each month, then you’re not ready to buy a house of that size.

People will give all sorts of reasons why such a statement isn’t true.

“You really don’t need that much money each month.” Let’s hear that refrain again when your hot water heater fails at the same time as you need a new lawnmower and your lawn needs re-seeding.

“Our lifestyle will be different when we own a house.” In what way? The only major change will be that you have less spending money and, most likely, more room to store stuff.

Such statements are merely ways to pass the buck on to your future self, the responsible one who owns a house and makes more money and makes all of the payments. If that person doesn’t exist now, merely owning a house won’t make that person exist in the future. Don’t ever base your plans on what you hope might happen someday.

Take responsiblity now. See whether or not you actually can make it work in terms of your month-over-month finances. If you can’t do it now, then you won’t be able to do it then.

Sell off all of your stuff that you don’t use.

The less stuff you have, the less space you need. The less space you need, the smaller house you need. The smaller house you need, the more likely it is that you’ll be able to afford that house.

Go through your closest. Pare down. Get rid of stuff that you don’t use.

If you sell off a lot of your stuff that you don’t use, you’ll not only realize you don’t need as much space as you thought you did, but you’ll also find that you suddenly have some cash in hand that can help you move towards actually owning a house.

Even better: the less stuff you have, the easier (and less costly) it is to move.

I’m not arguing on behalf of selling off stuff that has value to you. I only suggest that you go through your closets and cupboards and get rid of the stuff that you don’t use. It’s just sitting there taking up space, convincing you that you need more living space, when in fact it could be money in your pocket and freedom in your life.

Fix some stuff.

If you’re a renter or you live at home, it’s easy enough to call a landlord or a parent when there’s a problem. “The toilet seems to be broken.” “There’s no hot water.” “Why won’t the dryer dry my clothes?” “There’s water flooding the basement.”

Here’s the catch: when those things happen in a house of your own, it’s up to you to fix it. If you can’t, you’re going to be shelling out fistfuls of cash to pay someone to do it.

When you’re living in such an environment, you’ve got a perfect opportunity to learn how to do such things with something of a safety net. When the toilet breaks, try to fix it yourself. Watch some YouTube videos on toilet repair. Identify what parts you need, find a good hardware store, and pick them up. Give the repair a serious attempt all by yourself.

If you can’t do it, then report the problem. Don’t just walk away, though – watch and learn from someone who can do it. Watch your landlord or the repairman. Try to figure out where you went wrong and how you can avoid it next time.

Even if you fail, you’ve learned some things. You’ve learned how to use tools. You’ve learned how to identify problems. You’ve learned what the equipment looks like. This will make solving future problems much simpler and much more cost-effective, especially when you’re living in your home and something goes wrong for the first time.

Figure out why you’re buying a home – there are lots of bad reasons and non-reasons to buy.

Don’t buy a home because that’s what you’ve been told you’re “supposed” to do.
Don’t buy a home because that’s what you think you’re “supposed” to do.
Don’t buy a home because it’s a good investment for the future. It’s really not all that great of an investment.
Don’t buy a home because you might get married and have kids someday and you need the space for this hypothetical future.
Don’t buy a home because you think it will lead you to some sort of idealized suburban life. A home won’t change who you are.
Don’t buy a home because you’re trying to “keep up” with someone in your life. It’ll make you fall further behind in the long run.

Buy a home because you it truly makes sense financially and you’re ready (and excited) to deal with the challenges of homeownership. Buy a home because it’s better for your housing dollar than the other options available to you.

Buy a home because it’s what you want and it’s what you can handle, not because it’s what others want.

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  1. Mike C says:

    Great post. I agree on each of the four points.
    Also… Don’t buy a house just because the market is down now and it is a good time to buy. Take time to make sure you make the right decision.

    And don’t buy a house if you do not see yourself living in it five years from now.

  2. This is a good exercise to go through. Unfortunately, the emotions involved in buying a house are some of the strongest one can encounter next to love or grief. And, like other advice we know we should follow, sometimes our emotions trump our logic.
    Unfortunate, to be sure.

  3. Johanna says:

    The second-to-last paragraph got a bit muddled (“because you it truly makes sense”?) so I’m not sure if we agree or disagree, but I’ll add:

    Don’t buy a home because you assume that it’s the best choice financially (e.g., because you’re “tired of throwing money away on rent”). Buy a home because you’ve run the numbers for your particular situation and you’ve found (if in fact you’ve found) that it’s the best choice financially *for you*.

    Or buy a home because, although you’ve found that it’s *not* the best choice financially for you, you can afford it and you want to live in that particular home badly enough that you’re willing to commit with your eyes open to a choice that’s not financially the best.

  4. Nicole says:

    Good article! I also agree with Johanna’s additions.

  5. chacha1 says:

    The only house I’d be willing to buy has so many conditions attached (location, lot size, & zoning being prime), I doubt I’ll ever find it. But if I do, I plan to be financially ready for it.

    In the meantime, I’m much better off renting my 1500 sf of prime real estate … at approximately 30% the cost of buying.

  6. Todd says:

    Excellent guidelines. I’d add: Don’t buy an older house for the “character” or charm unless you can afford to spend a small fortune on upkeep.

  7. Kai says:

    I agree with your general points, and I think the first paragraph is excellent, for the discipline. I’m working up to the same thing right now, but for a car – I put money in the car account regularly, and when I find myself able to steadily contribute enough money for insurance, gas, and repairs each month (I have a figure allotted for this), then I will know I am in an appropriate state to own a car, and the money from the car account can be used to purchase one.

    I must quibble about your example though. When would your lawn ever actually really *need* reseeding. That could certainly be nice, and all, but it’s hardly illegal or strongly life-impacting to leave a lawn scruffy for a while…

  8. J says:

    This article seems pretty darn angry. Somehow I just envision it being read to me by an angry old man sitting next to me on a cross-country flight.

  9. rosa rugosa says:

    Before we bought our house, I asked my mom if I could see her records of utility bills and property taxes, which she was willing to do. So I was able to make a realistic projection of what our non-mortgage expenses would be. We bought a smaller house in the same town, and our expenses were actually less, which of course was not a problem. I wish I could say we banked the savings, but alas, we frittered it all away. But that’s another story, and the point is that we bought a house we could afford, and it has only gotten more affordable over the years. We love our little house, and it has served us very well.

  10. Nicole says:

    #7 Unless you live in a HOA and they threaten to use their legitimate powers of foreclosure on you if you don’t fix the weed problem (that you’d already spent $300 on, but apparently when they said “weeds in the flowerbeds” they didn’t actually mean “weeds in the flowerbeds” but “get rid of the wilderness area that has been there for 15 years, long before you bought the house”).

    (sorry… projecting)

  11. J says:

    HOA’s are a prime example of the road to hell being paved with good intentions.

  12. Adrienne says:

    Kai (#7): Even if you’re not in an HOA, some cities require that you keep your yard kept up to a certain degree (totally up to the individual inspector). You can also be cited for having chipped paint, a dilapidated fence, etc..

    I live in a suburb of Los Angeles. My house is 60 years old (no HOA, no CC&Rs), and I was cited by “Neighborhood Services” after an anonymous complaint from one of my neighbors. Our house was a rundown rental for 12 years when we bought it, and we’ve improved it substantially. The city still forced us to patch stucco, paint the exterior, and “make the yard green” (so much wasted water!).

    So, unfortunately, depending on where you live, sometimes cosmetic fixes are mandatory, and it’s good to budget for them.

  13. Roscoe Casita says:

    #1 Try the water, you will drink it every day.

    #2 If you live in the house until the day you die, will you be happy? – Hesitation? then its not the house.

    #3 Go there at 6 am, 12 noon, 6 pm, 12 midnight. See how the noise and smells are.

  14. lmoot says:

    at Roscoe: 1 & 3 are good points, but I’m too young to be happy at being anywhere until the day I die. I bought a one-bedroom bungalow with an in-law suite, fully aware that this arrangement will no longer work the day I start a family. I think 5-7 years is a good minimum for staying in a house.

  15. Evangeline says:

    Your home is your haven. It will never feel that way if you are always scared you cannot afford it.

  16. moom says:

    This is some of the best advice you have given.

  17. David says:

    And I quote:

    “Go through your closest. Pare down.”

    Followed this advice to the letter. Decided that I could not afford both the wife and the house, but now that I’ve moved in, I miss her.

  18. lmoot says:

    Wanted to add that this was a great post. Things I wouldn’t have thought of.

  19. kristine says:

    David- hilarious!

    Great post.

  20. LC says:

    Drive your car into the garage (and both cars if it is a 2 car garage) to see if they fit BEFORE signing the papers. Unfortunately speaking from experience.

  21. Michele says:

    Great post!
    By the way, we also got issued a ‘citation’ by City Service with a potential fine (and a nastygram from the HOA) because in wintertime in So Cal our house looked like it was ‘abandoned’ because we planted bermuda grass, which, of course, goes DORMANT in the winter, and had a gorgeous grape vine wrapped around the column and front windows of the house- which also are bare brown vines in the winter but gave us delicious Thompson seedless grapes for years. We had to prove with a bill of sale that it was a true grass that went dormant- nevermind that it was the best looking lawn all spring, summer and fall because we took amazing care of it.

  22. Brittany says:

    @ Kai My family had to reseed their lawn this spring (after the expense of having a septic tank replaced). The lawn was very torn up, and several weeks of rain destroyed it. It was basically an acre of mud, which did have a big impact on my siblings’ quality of life. They’re very active kids who play a lot of sports (one poised to get good sport scholarships in a couple years if she keeps working hard); with a yard of mud, they were stuck inside every day after school, unable to be active (negative effect on their health and their emotions), and unable to practice (negative effect on performance).

    So I quibble with your quibble that lawn reseeding is merely cosmetic; however, I would also quibble with the original example for another reason–if you needed to reseed your lawn, why would it matter if your lawn mower was broken?

  23. SZCZEBRZESZYN says:

    Whatever house you buy will be very important to your kids. The younger they start out there the more important it will be. Thus, they will be unwilling to consider moving later. So, you should be prepared to stay for a while if there are some juniors in your family.

  24. NZ Chick says:

    Also don’t buy too much land unless you are going to use it. Our section is 1000sqm which is great and we use it by having a big area for the kids to run around. We also purchased a secondhand greenhouse which has been fully utilised and is still growing veges heading into winter. So saving money there.

    Great satisfaction for the both of us to be able to do what we want to the property and have enough space to do it. A sound house means no inside improvements need to be done so we can concentrate on important things like growing our own veges, composting, playhuts etc.

    We were definately too restricted when we were renting!

  25. roscoe casita says:

    @lmoot

    When we bought our house, we looked at countless listings, pre-screened 150+ houses, and went into 50-75+ houses (and canceled one offer/deal because of inspection) our Realtor was frustrated, but we want to own it outright.

    But we knew that this will ‘probably and hopefully’ be the only house we ever buy. I’ll go back to renting before buying another house! (but i’d never trade our home to go back to renting)

  26. These don’t sound atypical at all.

    Sounds like good comon sense advice.
    Especially all the reasons “not” to buy.

    I wish I had those tidbits before I bought mine.

    No regrets–I just would have held off a little longer and chosen a different house to live in.

  27. triLcat says:

    Definitely remember that more house/more property = more upkeep.

  28. Steffie says:

    I totally agree with the person who wrote to go to the house at all hours of the day. Sunday Open House is not a good representation of what goes on in the neighborhood on a Saturday night, especially in the summertime ! And even after you’ve bought the house with your giant downpayment, try to keep saving some of the money you were saving as you will want to paint at least one of the rooms at some time in the future. That’s how I keep that ‘new house’ feeling. I look at the “Oops Paint”, some of the colors are pretty wild but at 5 bucks you really can’t go wrong. But even painting a small hallway or the basement walls will make a difference. Of course there is your time etc which I’m sure is very valuable, just like mine.

  29. Sandy L says:

    Another suggestion.

    If you really like a place, go for a walk in the neighborhood. I would also talk to the neighbors if they happen to be outside to gauge who you’re going to be living next to.

    You pick up more of a vibe from the place when you’re on foot vs doing a drive by.

  30. zoranian says:

    I’m completely torn on what to do. We have been living in a one bedroom apartment in a nice complex for 3 years and saving for a down payment (almost $15,000 so far). However, since I’m not planning on working when the baby comes (august or september of this year) our monthly limit on rent would be about $750 to be able to continue to save for a down payment. I would love to live in a house so I can have a yard, but we aren’t sure we’ll be here for 5 years.

    If we put $15,000 down we can afford a house in a *decent* area of town at a monthly of cost of LESS than renting (about $700 to rent a house in a neighborhood with purchase prices of $80k-$100k). Does it make sense to take the equity risk on the $15,000 we’re putting down if we’re not planning on being here for 5 years? And yes, I have planned for insurance, repairs, taxes, and more into those monthly figures. If worst came to worse and we couldn’t sell the house for what we paid, we could rent it for more than our expenses (probably about a wash after figuring additional repairs and vacancies and management fees). Am I wrong in thinking this? Being a first time homeowner and first time parent would be a big bite to chew off, but I also hate to pay more to rent a place than I would to buy it. The majority of our down payment right now is earning 1.1%, so I’m not worried about the “opportunity cost”.

  31. James says:

    I can’t wait until I’m in position to purchase my first home.

  32. wanzman says:

    I bought my first house at age 23, and while it was a bit of a stretch, I absolutely do not regret it. I put 10% down, and have recently paid off the 10% 2nd mortgage (I am now 25).

    It was wonderful one I got married about 2 years ago to be able to bring my wife back to our home. We also love to work outside in the flower beds and take care of the lawn.

    Ours is an older home (built in 1940), and all the comments about spending a fortune maintaining homes are complete fear mongoring. Sure, if you by an old home that is already a piece of junk it will be expensive to fix. That goes without saying for all homes.

    My advice would be to purchase the best home you can the first time around (as in, buy a home that has been taken care of).

    As far as waiting until every last star aligns before you purchase a home, I disagree. I wanted a home as long as I could remember, and as soon as I possibly could, I bought one. The stars weren’t even close to aligned. But it has been awesome, and I great feeling to feel like an adult.

    You must keep in mind that Trent’s blog assumes you can just plan out every last step of your life, and obsess over everything (who takes 2 years planning a car purchase?).

    I say forget about 95% of his advice, and just live life already. Things rarely work out the way you plan, and if you plan obsessively, you are going to be upset when things don’t work out.

    Have a decent plan, and go for it. Don’t paralyze yourself with fear and overplanning.

  33. asithi says:

    @wanzman – actually my husband takes about 1-1.5 years to plan a car purchase. He is like Trent, researching, visiting car forums to see if there is any known problems, etc. Unfortunately, I did not take his advice the last time I replaced my car and am now regreting the purchase. Next time around, I am just going to ask him to let me pick from two choices that he has researched and the color.

    I agree that sometimes you just need to dive in and just have faith that things will work out. But the problem is – if you don’t have some kind of safety net (be it a stable job or an emergency fund), it is too risky to stretch yourself too thin for a house, especially when you have a family.

    A friend of mine really wants to purchase her first home in this down market (she is in her 40s). She is afraid that if she does not buy a home now, then she might never be able to buy one in the future. On paper, they make good money. The problem is they spend it all every month, hence they cannot even come up with a 3% down payment. I tried hinting that owning a home is not just about making the mortage payment. I’m with Trent, owning a home does not change who you are. I don’t think owning a home will change the fact that they spend all their money every month. But with a home, they are taking on more financial risk than they can handle at the moment.

  34. Amateur says:

    Saving for a sizable downpayment takes some serious discipline and then saving some additions for a few mortgage payments to be safe takes even more discipline. If those 2 objectives are aligned, I don’t see how much more there is to think about it, people with such discipline for handling time and money probably would make reasonable choices on where and what to buy.

    On the other hand, the people who struggle to get those 2 parts worked out, it may be better for them to wait for more favorable conditions. I don’t see the rush to buy immediately since the future does change its shape whether we like it or not. By renting there is an option of just moving to a place for lower rent, but mortgages are usually fixed, there is no lower mortgage option unless the home is sold or rented out (but still need to find a place to live).

  35. dave says:

    I agree overall with these suggestions, i bought a house last fall and despite my pretty exacting calculations of what i could afford, the ongoing costs are still more than expected. if you plan just having to pay the mortgage plus the current costs of your apartment, you’re going to be way short.

    @wanzman – yeah i agree trent overplans everything, i’ve been a regular reader for at least 3 years, and i’m glad i can finally stop hearing about the rusty bumper. but, this is the point of the blog. he writes about (broadly) planning your finances and your life, and you can’t say he didn’t plan the (*&# out of that purchase. you can take the ideas here (carefully plan major purchases and investigate first) and apply some serious grains of salt to buy a car in a couple months.

  36. mrsmonkey says:

    oh and take it from me….if you don’t know the area, TALK TO PEOPLE IN THE AREA. Find out the best locations in the area. DO NOT TRUST real estate people to tell you. First of all, they really can’t “steer” you. They’ll show you whatever is available in an area within your price range. If you have to, knock on doors and ask. I’m VERY serious about this.

    Once you have a target, DO NOT LOSE SIGHT OF IT. wait until a property comes available. then jump.

    I wish I had had this advice when we bought. we didn’t do too badly, but we could have done MUCH better.

  37. Diane says:

    Yup…did all those things.

    And I bought a very old house. While it may have a bit more mainteance, I love it and would never buy a new one. Construction and detailing on the old ones is just way more interesting.

  38. Matt says:

    @zoranian
    First off, have you considered closing costs? These fee’s will eat significantly into your bottom line / equity. I recently looked into the costs for a loan of 180,000 that had closing costs in the neighborhood of 5,000. Since you may not be in the area within 5 years you have to decide if the value of the house will increase enough to cover these costs. Also, look at an amoritization calculator bankrate.com. This will indicate how much equity you will have put into the house over the course of 5 years (All your payments will pretty much go to interest not equity assuming a 30 year fixed).

    Finally, consider why you want to buy the house. Two reasons I can think of from your post would be additional space for your child (separate bedroom is a life save!) and an outdoor space for your child. Is a house the best option to fulfill both of these things?

    Personally, I would look into renting a larger apartment close to a park / school / outside play area. At the same time I would reduce my per month saving’s for the down payment to afford this larger place. Put what you can towards it, but remember over the course of 5 years interest will be working for you, not against. Good luck with the little one! Ours will be 1 year in May.

  39. Scott says:

    These are some pretty good tips, and definitely not what is typically going through people’s minds when considering a new home.

    However, I’m a little bothered by the tone of the “fix some stuff” suggestions. Are you really saying “go ahead and try to fix your landlord’s property…if you screw it up royally, it’s their problem”?

    I realize I’m over-reacting somewhat, but I do know a lot of people that have that mentality when renting. Other people’s property is not your playground, even if they are allowing you to live there, if even for a fee.

    But if that is not the attitude going into it, then yes it’s a good way to get your feet wet – hopefully not literally – in basic home DIY repairs.

  40. wanzman says:

    @ Dave:

    I wholeheartedly agree, that is the point of the blog, and since this is the USA, Trent is free to do with the blog what he sees fit.

    Sometimes I catch a lot of flack on this site because I do not immediately post comments such as:

    “Great post. I agree with everything you said”

    If the point of the blog is to educate folks, then a multitude of people chiming in with praise after every sentence really adds nothing.

    I would venture to say that the reason I read this blog is because I disagree with a lot of the things that Trent says, and I disagree with a lot of the things he describes. People need to know there are 2 sides to every coin.

    Whenever I find that I agree with everything a certain writer is saying, I usally stop reading, becuase a that point I am not gaining any value, and my way of thinking is not growing.

    I’ll be here at this blog for awhile, because there are so many discussions I can actively participate in due to my conflicting viewpoints.

  41. J says:

    I’m erring on the side of wanzman here, too. It’s one thing to rush in and buy a house foolishly. Actually, nowadays, with banks being considerably tighter with their money, this is probably harder than ever, anyway. As another poster mentioned, having the discipline to save up 20% of a down payment on a home can be a considerable hurdle and can serve to build discipline.

    There is some value in looking before you leap, too — but making a SWAG regarding 150% of the mortgage is basing your future on a guess, which is equally silly. A few phone calls to insurance companies, mortgage brokers, utility companies, town/county, etc can give you some estimates of what things cost. Also, spend some time understanding the income tax deduction to know if you will qualify or not, since for many people, the answer is “not”.

    As for major repairs, call around and ask for ballparks on what a roof costs, what a furnace costs, paint job, etc. You might also want to look into what furnishings cost or determine that you are going to leave things unfurnished — if you have a S.O., get them to agree on what you are doing prior to closing.

    Also, keep in mind other expenses that you’ll likely encounter along the way, too. Replacing a car, travel, etc.

    I guess what I’m getting at is that you should come up with a plan and fill in the blanks where appropriate. Adding up the numbers if you are on a wafer-thin budget just to meet the above numbers, then you need to get to a better place, since yes, things do come up that are expensive. There’s no denying that.

    Also, this plan may not work out with your life, either. You may have to leave a rental sooner than anticipated or something else could come up that would make you do the rent/buy decision sooner rather than later, as well. You never know.

    The advice from Trent just sounds like trying to plan based on anecdotal evidence. If you are going to seriously plan your home purchase, it likely is better to get some better numbers based on information that’s fairly easily found out and/or on public records.

    And as for the water heater, lawnmower and lawn question, only the water heater needs to be dealt with, and that’s probably going to set you back $700-1000 installed (less if you are handy!). If you can’t afford that, then, yeah, homeownership is not for you. But the lawn mower can be borrowed and/or bought used and second, if your lawn needs re-seeding, doesn’t that imply that the lawn mower is a thing that you don’t exactly need right now? :)

  42. Steve says:

    The last bullet point really needs “Don’t buy because rent is ‘throwing your money away’”

    Maybe it’s implied but you could read the sentence “because it makes sense financially” and mistakenly assume that it always makes sense financially. Which is most certainly does not.

    I wonder what are some reasons to stop avoiding buying a house? Like “fear of commitment”

  43. mrsmonkey says:

    I’ve been contributing here off and on for a couple of years…and I can’t believe it’s taking a day to clear one of my posts. So I’m excluded from the conversation. thanks

  44. christine a says:

    #43 I’m with Mrs Monkey that it can take a long time for posts to appear (and sometimes they don’t appear at all even tho’ nothing I say is controversial!) but you could be ignored in a face-to-face conversation so hey, to the matter in hand. Thanks Trent for a bracing antidote to the received wisdom that it’s always best to buy. Sometime it is, sometimes it isn’t tho’ I share Scott’s concerns (#39) that you shouldn’t practise fixing stuff on your landlord’s property!

  45. Little House says:

    What great tips! I especially like the Don’t buy a house if…. ideas. In my case, I feel like it’s “time” to buy a house. However, I’m still not ready so I won’t be buying one until I am. My current motivation to purchase a house is for the amount of rent I am paying, it would cover a mortgage payment on a $275K home!

  46. Lynette says:

    I’ve heard of a friend of a friend whose elderley parents can’t afford the costs of moving into aged care because they never bought a house. (Most people where I live sell their houses and pay their own costs of moving into a private aged care facility.) I wonder if this is another angle to consider about home ownership, for those who don’t maintain other investments?

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