The first time my husband and I purchased a home, we were naive. We were in our early 20s, less than a year in to our careers, and eager to buy our chunk of the American Dream.
Of course, then the American Dream disintegrated, leaving home owners like us in the midst of a housing nightmare. But I digress…
This month marks exactly six years since we plunked down three percent on what might have been the American Dream, but most certainly was not our dream home. Now, as we prepare to sell this house and buy a new one, I’m reminiscing about the decisions we made, those we regret, and the lessons we’re taking away.
Location, Location, Location
It’s the number one rule of real estate: location sells. But when my husband and I bought this house, we didn’t have a clue where we were. We were relocating to the area from out of state, relying solely on our Realtor’s guidance. Ultimately, we bought a house in a convenient location – giving us each less than a 15 minute commute to work – but not exactly a desirable location.
In retrospect, I wish we’d rented in the area for a few months before purchasing our first home. If we had, we would have realized that while convenient to our jobs, the house at the top of our list wasn’t convenient to shopping, interstates, or parks. We might have also realized that the crime rate was slightly higher in our target neighborhood than we would have liked, and that it was fringed with upstart tract-housing communities that would later impede our ability to resell the house.
Walk The Neighborhood
This lesson kind of goes along with what I learned about location, but it’s more specific than that. When we bought this house, our idea of scoping out the neighborhood was to drive through it once, absentmindedly looking at the houses. We might have seen the structures themselves, but our naive eyes missed more important details that could have told us a lot about the community. We should have noticed the lack of children playing outside, even though it was a sunny Saturday afternoon: a sign the neighborhood wasn’t all that friendly of a place. We should have noticed the un-mowed lawns and overgrown flower beds: a sign some residents weren’t keen on keeping up their property. We should have noticed the lack of sidewalks and street lamps: a sign the neighborhood wasn’t very walkable.
Now that we’re shopping for house number two, we know that when you buy a house, you’re also buying a piece of the neighborhood. One Saturday morning a few weeks ago, we packed our kids and dog into the car and drove over to one of the neighborhoods we’re thinking about moving into once our current home sells. As we slowly walked down the streets, we took note of the well-kept houses, manicured lawns, and friendly neighbors stopping to pet our dog or say hello to our children. As we pulled out of the neighborhood, we felt like we were leaving a place we could already see ourselves living in.
Bigger Is Always Better
When it comes to your down payment, that is. Back in the halcyon days of 2006, when lenders would give a mortgage to anyone with a pulse, we were able to secure a home loan for no money down. We found this to be absolutely ridiculous – who gives you a $150,000 home in exchange for nothing? – so we did what any responsible adults would do: we put down three percent instead.
That down payment is absolutely laughable to us today. At the time, however, it was the norm; so normal, in fact, that we didn’t even have to pay mortgage insurance. Make that same move today, though, and you’d be looking at some serious PMI. The next time around, we’ll be putting down as much as possible in order to avoid mortgage insurance; there’s a local lender in our area that offers home loans without PMI for as little as ten percent down, but we’re prepared to put down twenty percent if necessary as well.
You Can’t Fix Everything
I didn’t cry the first time I put on my wedding dress; I did, however, burst into tears when I pulled into the driveway of our home for the first time. There I was, in our Realtor’s car, bawling my eyes out because I knew that this was the house for us; I could just feel it! It was perfect – well, except for the tacky linoleum floors, the peeling formica countertops, and the painfully small master bathroom. No matter, though; my husband and I were convinced that with some elbow grease – and a couple thousand dollars – we could make it exactly what we wanted.
Here’s the thing: you can’t fix everything. Nor should you! Yes, cosmetic changes like a new coat of paint are easy enough – and cheap enough – but repairing things like a convoluted floor plan or a lack of closets aren’t. As my husband and I shop for a new house, we’re cognizant of this fact. We’re looking for a house that has perfect bones – the right number of bedrooms, the right size rooms, a floor plan that flows – and aren’t worried about if the house has outdated wallpaper.
Don’t Buy The Best House In The Neighborhood
There’s a rule in real estate that you shouldn’t buy the nicest house in the neighborhood, nor should you by the worst. Instead, you should aim to buy a house that’s right in the middle. Why? Because in doing so, you’ll be able to put in a few upgrades without grading yourself right out of the neighborhood in terms of resale value.
We didn’t bother listening to that advice.
Believing that we could indeed fix everything, we not only bought one of the biggest houses in our neighborhood, we then went on a rampant home improvement spree. We ripped up floors and put in upgraded countertops; we retiled the fire place and added on a sunroom. When all was said and done, we’d spent more than $22,000 on our new house – and priced ourselves right out of the neighborhood. Now, as we attempt to sell the property, we’ve already had to accept the fact that we’ll never be able to get out of it what we put into it. In fact, thanks to the market and our ill-advised DIY decisions, we’ll be lucky if we get any of that money back.
Everything Is Negotiable
It was a seller’s market back in 2006, and the previous home owner of our house knew it. Even though his property had been on the market for ten months when we stumbled across it on our whirlwind home buying expedition, he refused to budge on the sale price. We were, however, convinced this property was the first home for us, and gave in to his demands and bought the house at full asking price.
Now that I’m a seller, I completely understand this line of thinking, but it’s a different world now. It’s a buyer’s market, and buyer’s know that. They ask for everything, including the kitchen sink. Some want you to pay for their closing costs; others want a home inspections. Others still want more outlandish concessions from the seller, like selling a home furnished or having the entire house repainted or refloored before move-in.
So this time around, we’ll be digging in our heels when it comes to negotiating on our next home. We know what a home is worth now, we know it’s worth more than the bricks and mortar or lumber and nails, and we’ll be bidding on the entire home – the bones, the finishes, the neighborhood, the lot – and will be more determined to get the best value possible. After all, in this market, there is more than enough inventory that if we don’t get the deal we want on one house, we know we’ll find it on another.

Reader, what lessons have you learned from the purchase of your first home that you’ll apply to the purchase of your second?