Friday, March 18, 2016

The Frugal Planner's Weekly Dispatch: Adventures in Homebuying

From: Chuck Donalies, CFP® [] On Behalf Of Chuck Donalies, CFP®
Sent: Friday, March 18, 2016 9:01 AM
Subject: The Frugal Planner's Weekly Dispatch: Adventures in Homebuying

The Frugal Planner's Weekly Dispatch

Volume 2, Issue 12
March 18, 2016

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Adventures in Homebuying

The opening credits for House of Cards features our street in the Bloomingdale neighborhood of Washington, D.C.

Sadly, Kevin Spacey AKA Frank Underwood is not running for president.

An Eye-Opening Experience

My wife and I have lived in the wonderful Bloomingdale neighborhood of Washington, D.C. for 12 years. While we love our house and the neighborhood, we recently embarked on a search for another house. Our two bedroom row house is cramped for two adults and two growing children.

It was exciting to start our search. We made a checklist of all the must-have features the next house should have. Then we added some nice-to-have features to our list. Finally, we agreed on a price range for the search. My wife was happy, the children were happy, and all was well.

Then our real estate agent started sending us listings and showing us houses. It quickly became clear the D.C. real estate market is insane. D.C. isn't the only city dealing with a tough spring market; a
recent article in Bloomberg Business suggests a nationwide problem.

After losing two houses to other buyers and still searching, I've learned a few things that I'd like to share with you.

Tips For Your Home Search

We've seen quite a bit of shoddy construction during our search. I'm pretty sure we saw a load-bearing poster in one of the gems we saw.

1. Figure Out What You Want

Make a list of the must-have and nice-to-have features you want in a home. You might even consider prioritizing the features just in case you are forced to make some tough decisions before buying.

2. Location, Location, Location

You need to decide where you want to live. Remember, you can change the house but you can't change its location.

3. Tour Multiple Properties
I found this tip particularly helpful when starting our search. Initially, our agent took us on a quick tour of several properties of differing conditions in the neighborhoods we expressed interest in. The cross-section of properties helped narrow our search.

Shout out to
Chris Chambers of A-K Real Estate. Thanks for being awesome!

4. Speak With a Lender

Submit a loan application to a lender before going to look at houses. You'll want to know how much house you can afford so you don't waste your time or your agent's.

5. Seek Advice From a Professional

Find a house you really like? Great! In a hot market, it's helpful to have a contractor do a walkthrough of the house. A pre-inspection may help you pinpoint problems with the house or confirm that you're making an offer on a good property.

In addition, I suggest checking whether or not the developer obtained the necessary permits to renovate a house. There have been
horror stories about shady developers in the D.C. region. If you're buying in DC, you can check permits using this link to the D.C. Department of Consumer and Regulatory Affairs.

6. Set Your Price - And Stick To It!

You're probably going to be excited by the time you're ready to make an offer. It's easy to get carried away when you're bidding in a competitive market. Set your maximum price, make your best offer, and let it go.

7. Be Patient

Okay, even I have a difficult time with this step. Buying a home in a hot real estate market isn't always easy. You might not be successful the first time (or two!) you make an offer. Be patient and will eventually find success.

Switching Topics...

Recently, I was interviewed for the Bloomingdale Buzz section of Capital Community News. Here's a link to the article!

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