Case Studies
Posted by Justin Bernard on October 17, 2018
The house she bought for $275,000 is a resale, ranch style 3 bed, 2 bath 1.5 acres, 1400sqft, deck on back yard, back yard lined by trees, 1 floor, and unfinished basement. She based the affordability on what the monthly payment would be.
She felt the worst part about buying a home was learning what the details of the financing process were and the downpayment (which she was able to borrow some from her grandmother. According to Faith "you don’t realize all the fees, and having to pay PMI if you don’t have 20% down. You have to pay one year's worth of insurance upfront and there's so much paperwork."
At the time of this conversation she have not closed yet, but was still in the process.
In terms of having help while going through The offer was confusing, she had a good realtor who explained everything, and has been reassuring.
Faith thought that the more explanation upfront, the better for first time homebuyers. Just so they know exactly what the steps are and what the requirements are.
2. Katie & Shia (married couple, aged 25,28, she works in marketing he has his own business tinting car windows for dealerships). They purchased a new build.
Young couple, Katie is 25 and her husband is 28. They have a 7-month old. They are a driven couple, Shia has his own business providing window tinting services to dealerships and Katie helps with the marketing for the business.
They were formerly renters of a basement apartment farther outside of town. They didn’t actually believe they would be able to buy a home but were approved for up to 300k purchasing price through State Employees Credit Union (they have a relative that works for the state so were able to become members). They decided to stay under 300k budget because the monthly mortgage payments would be too high. They were able to buy the home with zero down as part of a first time home buyer program and actually received $4 back at the closing.
The couple liked the colors but are repainting the interior to make it more “their own”. They love the light and windows, in particular the kitchen window that is large and lets in all the light. The lofting in the master bedroom is also a feature that was mentioned as being desirable. The pocket doors “save space and keep out the clutter”. They said the place felt much larger than the numbers suggest due to the open floor plan and they really liked that there are two stories.
3. Peter & Jenny (married couple, aged 35 & 34, two younger children 4 and 1 years old, he works as a project manager for robotics programming in laboratories, she works as an admin in Pediatric Genetics). They purchased a resale.
Peter and Jenny are well educated and work in intellectual settings. Labs and academia. They are relatively frugal (Jenny more so than Peter). They did a number of upgrades to their home themselves and plan to sell in the spring of 2019. Based on the growth in home prices for their area, they expect to sell with a decent profit on their home.
They looked online (Redfin and Zillow in tandem) for 3 months before finding the house that they actually went with. Their choices were pretty limited, like maybe 1 a month that came up. $200-230k. first priority was price then location (location being pretty important). No new constructions at their price ranges so didn't even consider. Townhouses and apartments (didn't want that because of HOAs).
Mix between phone and computer while doing the searching. The searching was looked at together. Peter probably did more with the finances, Jenny got the documents together. Bought house in flood zone because mother was egging them on. If they had to do it again they"d probably still buy the house because it's a decent house and their aren't exactly a lot of options.
Most difficult part of the process was the things relating to financing and there was mistake on their HUD statement where flood insurance wasn't included initially and only at the closing did they find out they had to pay for that. Peter thinks it really helps to have a really good realtor otherwise you can make a number of mistakes. Also good financing contact with bank because the process is confusing.
Regarding new construction, Peter said would be less skeptical of a new build. If the price is right and its new construction, then wouldn't have problem because they would make the assumption there aren't going to be a number of issues that could pop-up (ie.foundation, roof, etc).
What makes it easier for a new homebuyer? wouldn't need much hand holding with the new builds because the construction is new.
Would tech gadgets in the home help set the product or make you more interested? Tech wouldn't be a driving factor but if its there and helpful then great, but wouldn't want to pay extra for things like smart phone controlled thermostat "I've adjusted my thermostat once in the last month".