Buying a Home

Interested in jumping into one of the biggest roller coasters of your life? No, I’m not talking about a relationship, marriage, buying a car, or having a child. I’m talking about buying a home. Something that I’ve dreamed of doing ever since I was a young boy playing in friends tree houses.

The first adventure was finding the location. As my father always said to me growing up “The 3 most important things to look for when you buy a home is… location, location, location.”. It makes sense as you can change just about anything about your property / home other than the amount of land or where you are located.

Location List

  • Distance to grocery stores
  • Distance to train (Does it run daily, hourly, on weekends?)
  • Distance to family
  • Distance to schools
  • Quality of school district
  • Crime? If so what types? Would you feel save with your kids riding their bike down the street?
  • On a dead end or main road?
  • What is behind / to the sides of the property?

I grew up in Scotch Plains, NJ which is where my parents still live.  I wanted to be close to the area to help out when they needed it so Amber and I started the search nearby Scotch Plains. Once we started to see what was in the area, we quickly decided to compile the list of our needs for a home. Keep in mind this was our list so I expect your list to be different.

List of Wants / Needs

  • 1+ Acre of Land (Ability to put swimming pool and Tennis Court on Land)
  • Great Schools
  • 3+ Bedrooms
  • 2+ Bathroom
  • Big Rooms (Kitchen / Living Room)
  • Big Basement
  • 20 – 40 min max from Parents
  • No Septic or Well Water
  • Large Master Bath
  • 2000 sq ft+ House
  • Not on a main street
  • Not in flood zone
  • Central AC / Heating
  • Pool

After figuring out our list, the next step was figuring out how much we could afford. There are many aspects of your life that determine the amount you can afford according to Mortgage Lenders.

Factors for Maximum Home Loan

  • Take home income
  • Minimum Payments for Credit Cards
  • Total Amount of Credit Card Debit
  • Total Amount of College Loans
  • Credit Score
  • Current Occupation
  • Duration at Occupation
  • Amount of money you hold in the Bank

When I started to look for a home, I quickly found out that mortgage lenders make it extremely hard for freelancers to purchase homes. You have to have made X amount of money for 2+years to show that you have a proven record of making money via freelance. If you have a w2 / full-time position it’s not as much of a concern for them as they know a paycheck is coming every two weeks. My options were wait longer to buy a home or get a W2 position.

I was contacted by a CEO of a company who was interested in bringing me in to run his development team. It worked out perfectly where I started with the team as a W2 employee which was what the mortgage lenders needed to see for us to qualify for a loan. Since the process of buying a home takes months, I was able to start looking based on the start of the position and proving I would make X amount every two weeks. This gave me the pre-qualification I needed.

One of my brother’s friends Andrew Timoni was a Realtor so I was in touch with him during the pre-qualification process. Once I was able to send him the pre-qualification, we were able to start going to homes to actively start the process of buying a home. First we started sending links back and forth via Facebook messenger and email, but then I changed up the process to a perfect workflow that proved to be extremely efficient for Amber, Andrew, and I.

I created a Google Spreadsheet with these columns
Final Order  – Address  –  Price  –  Taxes  –  Sqr Ft  –  Acres  –  Link  –  Distance to Mom  –  Wes Work  –   Likes  – Dislikes  –  Andrew Update  –  Notes

Amber and I organized the list into a final order. We put the address and information relating to each house in. After Andrew reached out to the realtor of the house, he would update “Andrew Update” column along with notes to let us know when we would be seeing the house or anything he found wrong with the house. As we knocked places off the list, we moved it to another spreadsheet of rejected houses.

We found houses on multiple sites along with Andrew sending us internal results.

Websites to Search for Homes

We put an offer on our first home thinking it was a perfect home for us to fix up and make our own. It was on the side of a cliff which had a wonderful view, but it didn’t have much of a basement or property in the back. Still after seeing a bunch of homes we loved it and wanted it. After getting our bid in we found out the Realtor used our bid to push another bid through and didn’t give us a chance to counter. It was quite frustrating as we were basically used to “speed up” another deal.

The second home we put an offer on and it sounded like a done deal with the homeowners. Then another bid came in from a couple who brought their kids to the house to meet the homeowners. The homeowners “loved the family” and wanted to give it to them vs us. Another tough blow to us as each time you put an offer on a house you instantly start to research the area and envision your life in that home.

The third home we put an offer on was the last house on our list before heading home. I was already spent for the day of looking at homes, but Amber insisted on this one as she found it and it has her “rustic” appeal. The neighborhood reminded us of “Stepford Wives” where we figured kids would run around the neighborhood and parents would be coming out of their house to say hello to their neighbors. A complete 180 from our Brooklyn neighborhood.

As we opened the door to the home all we saw was “rustic” wooden floors. The ceiling was high and I saw Amber get excited. We walked into the kitchen which was underwhelming, but I quickly peered out into the backyard. It was a decent size that was backed by woods. I found out that the train was behind the woods so I knew people couldn’t build directly behind this home. I saw the door to downstairs and quickly headed down into what the verdict was on the basement. Would this be my mancave for the rest of my life or a sad small space? Thankfully it was a large finished basement with an office, wet bar, bathroom with shower. I was pleased and could see myself creating the perfect space for me.

We headed into the bedrooms upstairs. There were 3 Bedrooms for the children we plan to have as well as the master bedroom. That was the moment this house was sold for Amber. As soon as we opened the doors to the master bedroom Amber gasped and it was over. A huge bedroom, another room / lounge area off of the bedroom, walk in closet, and a huge master bathroom. Amber was in love.

Since the homeowners were selling the house themselves, we asked to immediately see the homeowners and sign a bid with them. The husband was in IT like myself and the wife was in Teaching like Amber. We quickly hit it off with the couple and it appeared as if we got the house!

Once we were ‘under contract’ with the homeowners it was one step closer to this home being ours! We needed to send out a home inspector to evaluate what was wrong with the home. My sister just used a home inspector weeks before so I used him as well since he was incredibly thorough. He emailed me a giant PDF of all of the things he found wrong with the house and left it up to me to negotiate with the homeowners on fixing any of the issues before purchasing the home. I would highly recommend Robert Fico to anyone.

The two concerns were the Carpenter bees eating the Wooden deck and the high level of Radon in the basement. The radon was over the legal limit which they were required to resolve. They had someone come out and install fans to circulate the air and bring down the level. After the level was brought down another reading was done and it was well below the legal limit. The homeowners also resolved the Carpenter bees issue by hiring a professional. This put our minds at ease and we continued with the home purchasing process.

Now came the worst of the entire process. The Mortgage Approval. These people pry into every part of your life financially to determine if you can be approved. I had people calling me asking why I was transferred X amount of money from person Y. I had to have person Y write a letter to the Mortgage company explaining it was a ‘gift’. All of my freelance jobs had to be backed by their 1099’s, W2’s, Checks, etc. I had to send documents multiple times to different people to get approved. Since this process what a nightmare for me I figured I’d give you an easy checklist to follow so you don’t have as much hell as I had.

Mortgage Checklist

  • Has anyone transferred you money since you started the process? You will need to reach out to them again to confirm the money was for a gift by having them fill out a form.
  • Do you transfer money between your business account and personal account? You will need your accountant to write a letter proving this doesn’t effect day to day business. They need to know the business doesn’t rely on this money to continue. Since I do Web / Mobile development operating costs are much different than opening a store.
  • Have you lived at multiple addresses / does your credit report show multiple addresses? They will ask you to explain what is the reason for these addresses. (Parents house, college dorm, etc)
  • Have you had an inquiry on your credit recently?  (Trying to take out a loan, new credit card, etc) They will ask for the explanation of the inquiry and if new credit was opened.
  • Have you had late payments or collection services reported on your credit report? They will ask for the explanation and what the outcome was.
  • Do you have enough money for the estimated mortgage payment coming in monthly? Combined for both you and the other person buying the home.
  • Do  you have enough money for closing costs? Mortgage lenders sometimes require two months of mortgage held in escrow along with taxes for X amount of months. This money is determined by the mortgage lender and should be discussed early on with you. Some lenders will pay some closing costs and raise your monthly mortgage by $50 / $100.
  • Do you have enough money for your attorney? This money is sometimes included in the closing cost but you should make sure the fee is agreed early on with the attorney. It could be roughly $1,000.
  • Make sure to find a great Home Insurance provider. I found out the one I went with (Geico / Libery Mutual) is horrendous and should be avoided. I will be switching over to a different one ASAP.
  • Make sure all paperwork for your home is correctly written and consistent. I had my home insurance stating the home was in a different township then other documents which needed to all be consistent. Triple check what is your exact township and what should be on all documents. Insurance agencies will put whatever they have on file which isn’t always correct.

If all goes well and you get approved you will find out your closing date. As much as you’d like to schedule moving into your new home for the day of signing, I’d wait as close to signing if not directly after to get all the wheels turning for that. The reason is mortgage lenders are notorious for delaying closing dates for the littlest reasons.

Once you have your closing date (Hooray!) you can start to get everything else in motion.

Closing Checklist

  • Do not take out any loans / credit cards / leases on cars! All of those requests are checked right before signing and could block you from getting your dream home. After you have the keys to your home and have been there for at least a few days then you can go crazy.
  • Make sure to forward your mail over to the new address. This could take a few days to go into effect so get started as soon as you can. You can do it online here. 
  • Get the contact information (email / phone number) of the new owners of the place you’re moving out of as well as the homeowners you’re buying the home from. You will want to be able to contact both for any questions you may have and to alert them of any mail that may need to be manually forwarded or collected.
  • Update all credit cards / banks / loans / monthly delivery services to new address. The last thing you want is a delivery or important documents you forgot about going to your old address.
  • Set the disconnect date of your old TV / Internet provider and connect date of new provider. Most cases you can drop off the old box and then determine which day you want them to come out and hook it all up. I timed it for the day I was moving in since I rely on the internet for my work. I would advise you to do this as soon as you know your closing date if it’s as important to you as it is for me.
  • Set the disconnect date of your Gas / Electric / Water / Trash providers and connect date for your new providers. Make sure the dates for these are aligned with the homeowners you purchased it from. They will need to indicate to the providers their disconnect date for you to be able to enable yours.
  • Alert your Landlord when you will be officially out of the place you’re moving out of. The sooner the better for both of you. The more time you give them to find someone the better off you both are.
  • Make sure to clean / repair / paint back your old place. You don’t want to have your security deposit taken away from you. The money is extremely helpful when you need it for other parts of the process.
  • Call movers to schedule your move. You will want to lock these people down ASAP as they can book up quickly. Make sure they understand how much stuff they are moving as sometimes they underestimate and send the wrong amount of people to help out. Keep in mind how many floors they have to walk up and down from your original place to the new place.
  • Update your drivers license. Amber’s license was from CT mine was from a different address. Do yourself a favor and update both of them. If you’re out of state and get pulled over they can give you a problem for not updating it 30 days after moving.
  • Update car registration to new address. 

Once you open the door to your new home, give your significant other / friend who you purchased the home with a big hug. It’s been an incredibly draining process and hopefully you will have many years of happiness at your new home.

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