Five Things I Wish I Had Known Before I Bought A House

Five Things I Wish I Had Known Before I Bought A House

Like many other homeowners, I researched the heck out of buying my first home: what to look for in a house and location, what kind of mortgage to get, programs for first-time homebuyers, what to ask the sellers and so on. I learned a lot, but mostly it’s the stuff I missed and didn’t expect in the homebuying process that I remember the most. These are the five biggest ones.

1. You Don’t Have to Buy a Home

When I was growing up, homeownership was a given, just like getting a university education, getting married and having kids. I remember helping my father work on houses he rented out as investments and hearing that property was one of the most reliable investments you can make, because it was scarce — after all, you can’t make more land. (At least until we start colonising Mars and the rest of the universe.) After years of writing rent cheques, I agreed. Why give all that money to a landlord when you could instead put it towards your own place?

After the Great Big Housing Debacle, many people are thinking differently and choosing to rent instead of own. Depending on where you live and your lifestyle/plans for the next few years, renting could be better for you. Both renting and homeownership are fine choices if you run the numbers for your particular situation.

I just had always assumed I would buy a house. Given the opportunity to do things over, I’m pretty sure I still would, but I should have taken a deeper dive into the question of whether renting or buying was better. As Trent writes on The Simple Dollar:

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 idealised 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.

In other words, buying a home is a financial decision, not an emotional one (more on that in a bit).

2. If You Do Buy a Home, Plan to Own It for Several Years

Buying a home is the biggest financial undertaking we’ll ever make (aside from the millions or so we need to save for retirement). I knew that and planned from the beginning to stay in my house for many years if not decades. But in the back of my mind, I’d always thought if I ever wanted/needed to, I could easily move. Sell the house, go somewhere else.

Aside from the normal additional effort and time it takes to sell a home versus end a rental agreement, homeowners are really at the mercy of the housing market. One of my friends has been trying to sell his condo for two years.

Owning a home is thinking long-term, rather than short-term (and doing it solely for investment gains isn’t a sure thing either).

3. Buy As Much House As You Might Need — But No More Than That

Five Things I Wish I Had Known Before I Bought A House

You can probably live on less house than you think. The previous homebuying trend was to get a “starter home” — small, affordable houses usually targeted towards first-time homebuyers — and then move on to a bigger house as the family (and income) grew. With the issues above, however, that might not be a wise or surefire strategy anymore.

On one hand, you’ll want a decent-sized place, because you can’t really know how much room you’ll need in a few years — especially if you’re thinking of starting, growing or supporting an existing family. You don’t want to live in a two-bedroom, one-bathroom starter home and then all of a sudden have triplets and your elderly parents living with you.

Buy too much house, on the other hand, and you’ll be spending more money on maintenance, energy and taxes than you should be. Also, as someone who lives in a house that has more rooms than we use daily, I have to confirm that just as water will flow to take up all available space, so too will junk in a larger house.

So if you’re deciding how big of a house you need, know that you would probably be happy with less, especially if there are rooms in the home that could become multi-purpose. An attic could be turned into an office, for example. As Lifehacker reader Dean Udsen was advised by his father: “No matter how big your house is, you can only sit in one chair at a time.” (I do have to say, however, that it’s nice to have at least one bathroom for every adult in the home.)

4. Negotiate As Much As You Can with the Seller

Five Things I Wish I Had Known Before I Bought A House

I wish I had known more about the negotiation process when buying a home — how much you should put down as a deposit, what you can push for and so on. We used a buyer’s agent (someone who represents you and negotiates on your behalf during the homebuying process) to do the negotiating, because back then I knew I sucked at negotiating and would frankly rather live in a cardboard box than haggle my way down to the lowest price.

Looking back, our agent should have pushed for more (and, yes, it was really our fault, because we should have pushed him to push for more, since it was our money on the line, yet we trusted him to do that). Besides just the purchase price, there were things that needed fixing or replacing that cost more than the reduction the seller’s agent negotiated with our agent. In hindsight, we should have gotten actual estimates from repair companies, because the concessions we got were less than the actual repair costs. If you’re in a situation like this in the future, don’t just let the seller do them either, because they’re less likely to choose the best contractors/materials if it’s just for the sale.

Depending on how comfortable you are with the homebuying process, a buyer’s agent can be a great help. Just do your research also so you know how much your agent should be helping, and don’t be afraid to push for more concessions if needed. Even if you enlist professionals to buy (or sell) your home, you still have to make sure they’re doing their job, unfortunately.

5. Don’t Be Afraid to Walk Away

Five Things I Wish I Had Known Before I Bought A House

After months of hopping from suburb to suburb doing open-house tours, my husband and I finally found a place we would both buy. We put in a hefty, earnest deposit, and then launched into an eight-month series of Murphy’s Law problems (issues with former tenants, the village, title company, insurance company and everyone else). But by that time we were so emotionally tied to this one building we already considered it our home.

That happens to be the biggest problem for homebuyers: emotional attachment. New home builders (and home renovators, for that matter) know this, which is why they ask you to customise the cabinet colours, choose what finish you want on the kitchen taps, select grout colour and so on.

The biggest lesson I learned was to not become emotionally attached to a property before all the paperwork was signed. See it as a financial transaction — one of the biggest ones most of us will have! — as well as a lifestyle decision. And then once the papers are signed and the keys handed over, you can think of the place as your home sweet home.

Photos by Capt’ Gorgeous, I See Modern Britain, Images_of_Money .


  • Here’s an idea. Do an article on buying or selling a home that has solar panels. What are the benefits vs disadvantages to buying vs selling a house?

  • One house I looked at in 2009, the Real Estate agent refused to allow myself to organise a building inspection to be done on the property. He said one had been done, and showed me the report. That raised all sorts of flags. An inspection that the seller organises shouldn’t be relied upon. So I walked away.

    • Good on you. I’m pretty sure that’s illegal too (?). You must be able to organize your own independent building analysis because there are so many different detail levels that they can go into.

      • Not illegal, just dumb.

        A buyer making an offer can write whatever conditions they like: “Subject to Inspection,” etc.

        A seller can accept or reject that offer with or without a reason.

        Refusing a B&P inspection is a great way to get a lower offer on your property.

  • Of all the lousy, meaningless advice I see, the worst is: “Do your research”. We ARE researching, Melanie: we’re reading your article!
    Where else should we “research”? Should we go on feedback from others? Is there a forum, or a list of preferred buyer’s agents? Who ranks their performance, and how? Is there a governing body, monitoring performance and deciding who is best?
    Worst of all: where are the LINKS to the places we should research? Buying in Perth is different from Adelaide, Sydney is different to Melbourne.

    • Its from a US based writer – she’s probably not familiar with the market here, which is more buoyant than the US market overall

    • Hey Penguin,

      I do plenty of B&Ps for a buyers agent on the Gold Coast. He is very reputable and gets great results. There is a few bodies that exist that could help you find professionals that you can trust.
      API -Australian Property Institute and REBAA – Real Estates Buyers Agents Australia. Hope that’s some useful info!

  • My partner and I just bought a home (we’ll have been sleeping there 1 week from tomorrow), and I’m glad to see that we did 1,2,3 & 5 in the process.

    We didn’t really need to do 4. Well we had to negotiate in a way but not about the price. The whole process following offer acceptance took a lot longer than it usually does, due to delays with the lenders and paperwork etc., and as a result the sellers were getting nervous and considering backing out and putting the house back on the market. Luckily we had a fantastic broker who was able to reassure them that the delays were unavoidable and that he had no doubt we’d get finance approval. Luckily, they believed him because in the extra weeks it was taking, a few other houses in the area had been sold, almost exactly the same & smaller than ours, for $20-40k more. A few weeks later, after a fast tracked settlement, we were in!

  • a good article, though some counterpoints are worth noting..
    You Don’t Have to Buy a Home
    Perfectly good advice for your 20’s, however do not leave it too late.
    By the time you are getting into your early 40’s, you are starting to look less attractive as a loan prospect to the banks, because you have fewer earning years ahead of you.

    Negotiate As Much As You Can with the Seller
    Remember, the agent is getting a commission, so it’s really not in their interest to drive the price down, unless you have given them some financial incentive to do so. Even then, you’re probably still need a firm hand on the riding crop, as they’ll try and double dip.

    The previous homebuying trend was to get a “starter home”
    If it is a ‘trend’, read: market stimulus. The idea was to get people into the property market with bite-sized mortgages, with houses to match. Like all quick fixes, it only addressed a short term problem.
    If it is something everyone else is doing, then it pays to see who is actually benefiting from the ‘trend’.

  • I also subscribe to Trent from the Simple Dollar and one thing I would point out is that he is basing all his advice on the US and sometimes the advice doesn’t come across – home ownership is one, he can say land isn’t a particularly good investment and you could move to a cheap area and pay less rent than interest over there, but in Australia we don’t really have that luxury, unless you live outside a major capital

    Home ownership in Australia is one of the strongest forms of investment you can make, mainly due to the massive incentives making it the most tax effective form of investment (barring super, which is capped) and the strong market that exists as a result, likewise our population pressure means that it’s extremely unlikely you can pay less in rent than interest – a standard 300k loan at 5% fairly obviously only costs you 15k a year (less than $300 a week) without even factoring in compounding, before the credit crunch in the UK it was fairly common advice to take out a massive interest only mortgage and pay that instead of wasting more on rent (arguably this also partly caused the credit crunch…)

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