Well we did it - I've been running around like a chicken with her neck cut off for the last couple of months, but I'm back and ready to share the story on how we landed this midcentury modern pad in the Marin Headlands. Stay tune, epic tale awaits!
1. Bid High, Bid Low: The first week on the Market we won two bids. We ended up having to walk away from the one we really wanted due to the intricacy of Jumbo Loans (high bid). The second bid would of require us to completely gut a house down (low bid). We agreed it probably be the end of our family - tackling such a big project with full-time jobs and a toddler, seemed a tad stressful. So we walked away from the deal.
2.Jumbo Loans: Is a Loan above 625Kish (it depends on your area). Having a Jumbo Loan requires you to have liquid assets that are not part of your down payment etc. This money would just be sitting in your bank account, as proof of your financial solvency. Most people don't have buckets full of cash sitting pretty in their bank accounts. So Jumbo Loans weed out a large percentage of potential homeowners.
3.Don't listen to what the realtor tells you a property is worth: Both Bids were won by not listening to the realtor's advice. Do your own Market research and homework. It doesn't hurt to have friends in related industries that can point you to potential conflicts that devaluate or appraise a property. In our case, I'm in the building industry, so I was able to access my personal network including my own professional knowledge. As far as Market research, sites such as Redfin and Zillow can tell you what houses in a particular area were sold for in the last 3 months. This is a good starting point to understand the current market.
4.House Hunting has now become your part time job: All other priorities have been superseded, your brain has been possessed with house hunting strategies. You are now addicted and this can only end two ways. You will be a homeowner soon, or you will move back to the Ozark's and go hide under the Titanic exhibit in Branson, MO.
5.Agents in the Bay Area have bigger fish to fry than you, so don't expect to be catered to: Agents in the bay are like servers in a high-end restaurant, they will be very professional and take down your orders. But don't expect them to cater to your needy self, especially since they saw you roll up in a Corolla while the table next to them rolled up in a Tesla. They are not expecting you to leave them a big tip. I don't blame them. Especially if you are a first time owner in the SF Market. It's a Jungle out there and only the Grittiest survive. For all we know they're probably just calling each other saying "hey man I'm sorry, I have to place this ridiculous low bid for this poor schmuck, bare with me".
6. You will be doing tons of math and excel modules: This will become a regular repertoire after work and topic during dinner conversations. How much house can we afford? When will your rent supersede a house mortgage? What if we stayed in our apartment longer and saved more for a down payment? How will that play out with increasing interest rates? How much are we losing in potential tax breaks? What are all the hidden fees associated with closing on a house in addition to your down payment? Etc Etc Etc $$$$$$$$
7. You will now worry about the BIG ONE: You will now research Earthquake insurance (the deductible is 15% of the value of your home). What that means is, if your home is worth 1 million and the Big One hits, you will have to come up with approx. $150,000 in order to rebuild your home. Which will now lead you to google " where are the safest places to live within the Bay Area, find me some Bedrock".
8. School Districts Matter: Do you have kids? Or plan to have kids? You will now worry about School Districts and how to work your way into a good one. Or maybe you will google map how far from this property to the Kahn Lab? Note that there are ways to get your kid into a good school if you are not in a unified school district- it might be through employment location...hint hint.. "what are other ways my kid can get into a 10 school if I don't live in that district".
9. The first week is stressful: During the first week of house hunting I lost 3 pounds and gained fat percentage. By the second week, I gained more clarity on what we wanted and where we wanted to be. By our third week, house hunting became a fun sadistic game.
10. You are not alone: So many people have been exactly in your shoes. They played the real-estate game in the Bay Area and just when they lost all hope, they landed a home. Our peers have stated that it took them 6-9 months to find their houses. So maybe you thought it be 10k run but it could potentially turn into a marathon.
So there you have it, 10 things learned during our first week of house hunting. I know this might sound very crazy from an outsiders point of view. Why wouldn't you just move out of the Bay Area and seek a simpler life? Why would you pay those outrages property values? Why don't you just move back to the Midwest and chill out? Why? Why?
If you are in this position take solace in knowing, I get you. I know you still have the fire within you. I know you love your city and have made strong connections through work and your SF Bay community. This is your town and you will not be priced out. You are going to win this battle!