What's it like to buy a house in 2023?
I moved out from my parents' house in October 2021. I remember renting a U-Haul truck, loading it up with the few pieces of furniture I had left over from college or taken from my grandpa's old house, and setting off for Tinton Falls. I found a nice, albeit small, apartment with a buddy I worked with and was ready to move out from home and spread my adult wings.
That apartment was good to me for basically two years. It was close to the beach, the rent was cheap, and it allowed me to grow on my own.
Recently, however, I realized I was ready for the next steps. I just got a new job that was fully remote, so I had no ties to a specific location. I was tired of losing money to rent every month and wanted to move somewhere closer to my girlfriend near the city, my family, and my friends. But on top of that, I wanted to live somewhere fun.
Over a few weeks, I started putting together my house list:
- Central location. I wanted to remain in Central NJ and be able to travel to NYC and the beach within 45 minutes max. I also wanted to remain close to my family and friends, so I didn't want to go too far north. I generally looked as south as Edison and as far north as Cranford.
- A backyard. I didn't need anything too big, especially because it would just be me living there for now. But I like to be outdoors when I can, considering I sit and stare at a computer screen for 8+ hours a day.
- Move-in ready. I'm not handy at all, so anything outside of the most minor of improvements is outside my ability.
- Something within my budget.
Just a quick disclaimer here - money/budget is obviously a pretty important part of the home-buying process. I don't want to dive too deep into the money aspect of things because it's a difficult conversation to have, and I realize I am incredibly fortunate to be in the position that I am to buy a house at 26. However, because financials are an important part of the story, I will tell it in the beginning to get it out of the way.
My max budget was $500K and my original down payment was $50K. After losing a few bids with similar offers but a lower down payment, I realized I needed to increase the down payment to $100K. I will go into in more detail later, but I got it at $430K with $100K down with just under 7% interest rate (which is incredibly high, and it's gotten higher since).
House Hunting
The most fun, and maybe the most stressful, part of buying a house is finding it. I knew my budget, the area I wanted to look, and exactly what I was looking for. I just needed to find a realtor.
This happened to be the easiest part, and the best decision I could have made.
Eileen Dick was a recommendation from my aunt and she was the best realtor I could have asked for. She lived in Metuchen so she really knew the area and had a lot of connections, and she was so vital for all of my many questions and requests. If you are looking to buy in central NJ, I can't recommend her enough.
After I gave her a call and talked through what I was looking for, we scheduled some time to tour Metuchen houses that week.
I'll never forget the first house I saw. It was disgusting.
You could tell the house was lived in by a hoarder. There was crap EVERYWHERE, to the point where you could barely see the walls. There were so many dishes in the sink they looked like they could topple at any moment. I went out of my way not to take any pictures of it (which I completely regret in hindsight).
I'm not going to list every single one of the ~30 houses I've toured, but I'll highlight the more memorable ones and the offers I've placed:
The first offer(s) I placed, after a few weeks of searching, were two of these townhouses in Metuchen. They were both way below budget with hardwood floors & a basement, and had a little outdoor space to go with it. I ended up placing offers a little over asking price, but lost out on both.
After the two townhouses, I came back to the second house I ever toured: this fixer-upper outside of downtown Metuchen. It was a good size, had a beautiful screened-in porch, and was in a really great location. I looked past it the first time because it required a TON of work, but they dropped the price significantly after the sellers received no offers. I was thinking that if I could get it WAY below asking, I can put the money I saved towards some serious renovations.
Unfortunately, there happened to be another offer that came in slightly above mine around the same time. I could have gone higher but it would significantly bite into my budget for a place I wasn't crazy about.
After searching for almost a month, I came across this this recently renovated house in Edison.. It was GORGEOUS. The kitchen, bathroom, and living room were all brand new, there was a big backyard, AND there was a basketball court across the street! This was perfect for me!
I placed an offer after touring and was really hopeful. It was a little more expensive than I'd like, but it hit a lot of things on my wish list. Unfortunately, I lost another bidding war, and someone else got to watch basketball games from their front window.
After losing a few offers, I was really head over heels for this house in Edison. It was well-decorated, it was a good size and a great price, and it had a pool!
I offered WAY over asking for this one. I really wanted it. It wasn't super close to Metuchen, but it was just an awesome house. I think there was some politics with this one, as the listing agent wasn't very communicative about the whole process. My read is that there was a buyer pre-chosen and the whole process was a formality, but I can never know for sure.
I was starting to lose hope.
After over two months of searching, 26 houses toured, and 5 offers sent, I had NOTHING. No prospects, no potential houses. I even started looking at rentals in Metuchen, Hoboken, Red Bank, anywhere. I was losing faith.
And then I found it.
Zillow notifications went off and found a beautiful duplex unit right across the street from the award-winning Metuchen Main Street. It was in a beautiful location, with a beautiful kitchen, a screened-in porch, a big basement, hardwood floors... it hit every single item on my list.
I had to have it.
I called Eileen and booked a tour immediately. We were the first people to tour it and it was exactly as advertised. I told Eileen that this was exactly what I was looking for and that I wanted to place an offer that night.
The house was on the market for just under $410K, and I really wanted to blow them away with a competitive offer. I ended up settling with an offer for $425K with an escalation clause up to $450K, which just means that my offer automatically goes $1K higher than whatever the top offer is. Also, to speed up the closing process and make my offer even more appealing, I waived cancelling the contract over any issues that came up during the subsequent home inspection except for major structural or mechanical issues. Basically, if I got the house, I wouldn't make a big deal out of minor issues that came up. Finally, I wrote a much-maligned "love letter" to really show my seriousness.
The sellers liked my offer, but they wanted to wait a full week to see if there were any offers that came about during that weekend's Open House.
After worrying all week, I heard back.
My escalation clause won out.
I got my house.
Closing
Just because I got my house, the process doesn't end there. I had to go through home inspection, get approved for a mortgage loan, sign up for home and auto insurance, and sign my life away on countless contracts and addendums. Each day I had to get on the phone with someone or sign some contract to move the closing process forward.
First, we had home inspection. This is standard process to make sure the house is not falling apart and to be aware of all the major and minor issues. My home inspector, was great, and he wrote a detailed report of all of the potential issues to bring up to other inspectors. Most were minor, like the shower head and garbage disposal not working, but there were 2 more major issues.
- The rust in the HVAC unit looked "worse than expected." He recommended a specific HVAC contractor should take a further look to confirm there is no long-term damage.
- There were some pretty bad cracks on the side of the house near the windows. The stucco facade was showing real wear-and-tear, and again he recommended a structural engineer contractor to confirm if it was ONLY on the exterior, or if there was some damage to the underlying steel beams that support the foundation of the house.
From that call, I scheduled two additional contractors and kicked off the additional contracts needed. The HVAC contractor said everything was fine, but the structural engineer... did not.
The structural engineer said there was "widespread rust damage" that could result in "serious catastrophic failure."
I was floored. The perfect house requires $40K in necessary structural repairs to fix "serious catastrophic failure"?!?!?! This could actually break the contract.
Apparently, while this is not a common occurence, it does happen. Eileen said that there is a chance the sellers could give a percentage "credit" towards the repairs, but I didn't think it was likely.
And it wasn't. The sellers, when told of the structural repairs needed, apparently considered cancelling the contract on their end and renting out the unit for the forseeable future.
Everything was in jeopardy.
Luckily, the sellers came to their senses and realized cancelling the deal would be a lot of work and still wouldn't address the structural issues of the house. They very kindly agreed to credit $10K towards the structural repairs and the deal was kept on. Crisis averted.
The next mini crisis that closing brought was the money. I originally opted for a $100K down payment, which ended up near $105K with additional closing costs and various credits. I had money in a few different places, so I had to initiate all of those transactions before the big day. Unfortunately, some of the transactions didn't complete by the morning. I was panicking to come up with the money because no money means no house.
To make a long story short, my family helped in the short term, and the whole wire transfer concerns I had were quashed by extremely helpful tellers at Santander bank. While we had to jump through a few hoops, the full down payment was transferred right before the time of closing.
After signing what felt like hundreds of different contracts that I didn't understand, I had the keys in my hand.
I was a home owner.
Final Thoughts
- Even though buying may be a better financial options longterm, buying a house is a TON of time, energy, and financial commitment.
- Speaking of the time, the closing process took just under a month in total. Each day, I had to answer some emails, jump on a call with an associate, or get to the house to let in a contractor. This was arguably more exhausting than the house hunt.
- Do your research. Know what you're looking for, where you're looking, expected price ranges, etc. The more places you tour, the more of an idea you get as to what you're looking for, and the better chance you have at finding your dream home.
- The most important research you can do, however, is your realtor. As my mom reminded me via an Instagram post, your realtor is your tour guide, consultant, advisor, therapist, & best friend for 3 months. Make sure you make the right decision for your location and budget.
- The process isn't easy, but it's worth it in the end. Stay the course and don't get discouraged if your dream home doesn't materialize immediately. Right after I lost hope is when I found exactly what I was looking for.
Overall, this was roughly a 3 month process: 2 months of searching and just under 4 weeks of closing. I ended up seeing 26 houses and placing 5 offers before I found my home.
But, ultimately, I found my dream home. I found the place where I want to create a future.
And I couldn't be happier.