4 New Year’s Resolutions for 2014 Home Buyers
There are tons of different approaches to setting resolutions. A resolution can be a goal - an action or accomplishment you propose to achieve in the year to come. Or a resolution can be a declaration – a commitment you make, a stance you take.
If you’re hoping or planning to buy a home in 2014, there are some action-type resolutions you’ll need to make, whether you call them that or not: getting your credit and money matters in order, linking up with the right real estate and mortgage pros - that sort of thing.
But I propose that there are some declaration-style resolutions you should make as well, to make the very most out of your home buying experience. Here are the top four:
1. Resolve to do your own reading, ‘r’ticulating and ‘rithmetic. If you plan to close escrow on your home in 2014, you’ll have plenty of documents to sign in the year to come. I encourage you to get out in front of all these commitments you make to others with 3 critical commitments to yourself:
- #1: Read everything,
- #2: Speak up for yourself, and
- #3: Do your own math.
Reading. Depending on how many homes you view and how many offers you make before you find “the one,” you could end up being asked to review and acknowledge thousands of pages of disclosures and contracts over the coming months. Do yourself a huge favor that seems obvious but is harder than it sounds: read them. All of them.
Maybe you don’t have to read a completely pre-printed/boilerplate form you’ve signed 5 times before every single time you sign it. But even if you have made offers on 7 homes before, you do need to actually read the 8th home’s offer before you sign it. Same goes for seller’s disclosures, inspection reports, HOA documents and loan closing paperwork.
Ask your agent to help you get documents via email, throughout the process, as early as possible before the deadline for signing them. You can read them at your convenience, without feeling pressured, in the comfort of your own home. This allows you to make a list of your questions and concerns and to send them to the appropriate parties to be addressed while there’s ample time.
‘R’ticulating. Once you read documents, or even while you’re physically in a home or meeting with one of your professionals, make it a practice to speak up for yourself. That could mean simply asking questions, even when you think they should be obvious. It could mean asking the same question you’ve already asked twice, if you don’t understand the answers you were given. It could mean pushing back when you have strong, nagging concerns about moving forward with the deal for any reason - making sure you’re comfortable with the totality of the transaction before you remove contingencies, rendering your deposit non-refundable.
Whatever it looks like, no matter how mellow and non-confrontational your personality normally is, decide that in you’ll be an assertive advocate for your own interests and needs in the context of this transaction.
‘Rithmetic. Figure out your own monthly income and expenses, budget for what you can spend on housing every month without skimping on your savings and investing, and go into this home buying experience telling your professionals what you can afford. Don’t rely on others to do your math for you, no matter how much you hate math. Sit down and just do it. There’s a 90% chance it’ll be less painful and less time-consuming than you think.
2. Resolve to take a long-term view. It’s super tempting, when a market is rising, to try to hurry up and buy out of the fear of being priced out. I’ve begun to hear some buyers take shortcuts in their planning process, counting on the rise in market values to make it easy for them to sell if they need to, in the short term. This is foolhardy – given the costs of simply doing a real estate transaction, in most markets, it’ll be difficult to sell and cover even transaction costs if you are forced to do it in the year or so following your purchase (even longer, in some areas).
Don’t fall prey to this decision trap. Instead, resolve to buy a home based on:
- how much space you’ll need
- what sort of property will work for your family
- where you’ll want to live, location-wise, and
- what you’ll be able to afford for at least the next 5 to 7 years.
If you think any of these things will change significantly in that time frame, and you know how you’ll expect them to change, buy your home for what you’ll need at the end of that period. If you think they’ll change significantly in that time frame and you have no idea how they’ll change, consider whether it’s sensible to buy at all – your agent, mortgage broker and financial planner can help you make a decision based on your market and your personal life.
3. Resolve to respectfully ignore the peanut gallery. On real estate matters, you’ll find that everyone has an opinion. Doesn’t matter if they’ve never owned a home. Doesn’t matter if they live in your town. Doesn’t even matter if you know them or not. Even mention that you’re in the market for a home and you’ll find that even the most milquetoast, quiet folks in your life will chime in and have something to say, regardless of whether you requested their opinion.
You might have certain folks in your life who know you well, who care about your best interests and whose opinions you respect. There’s certainly nothing wrong with that. But here’s the deal – everyone who offers an opinion is not qualified to give it. And many folks will attempt to spread their fear and cause you to second-guess your own plans out of their own personal traumas, dramas and poor past decision-making or – worse yet – out of their own views about you and how you might change if you move forward with becoming a home owner.
My advice is to take in what’s helpful, benefit from others’ mistakes, and then ignore the rest. Take their opinions with a grain of salt. And take great pains to ensure you’re not attempting to escape the scariness of taking personal responsibility for this momentous decision by allowing your personal peanut gallery to pepper you with their opinions. If you already know the nervous Nellie in your life will try to talk you out of even the best-laid, smart home buying plan, protect your dream by not sharing it with them.
4. Resolve to enjoy the ride. So many people brace themselves for tension, drama and upset before they buy a home. And you know what? They find it! It’s wise to expect the unexpected, commit to going with the flow, and build in cushions of time and money to all your estimates and expectations. That flexibility can help you to retain your sanity, and might even make the difference between the ability to close your transaction or not, in extreme cases.
But I’m going to suggest you take it one step further and actually commit, in advance, to enjoying the home buying process. If you look for what you can be thankful for and excited about in every situation, you will encounter dozens, maybe even hundreds of insights and opportunities that you’d otherwise miss. Buying a home presents opportunities to:
- learn a lot about yourself and your family
- explore your town
- grow closer to your spouse or co-buyer
- level-up your financial knowledge and status
- create and put into play a holistic vision and plan for your life.
Buying takes a long time, so deciding to enjoy it is to make a decision not to put your life on hold for months or years on end, but rather to flourish and thrive right where you’re planted, engaging with life and gathering up the multitude of powerful takeaways you can find in the process (on top of the home itself!). I know buyers who took advantage of the home buying experience and leveraged that momentum into changing careers, taking up new hobbies and skills, starting small businesses and rehabilitating longtime, chronically bad financial habits.
So seize the moment (or the year), and make a resolution that if 2014 is going to be The Year of the Home for you, it’s going to be enjoyable, not just at the end – but throughout, come what may.