This means, among other things, that:

• Some of the content is not fleshed out, so you should not read more into things than exactly what is there.
• Some sections might have things marked as “TODOs” (e.g., questions or things that must be done).
• There probably will not be any section that pulls everything together in an easily understandable way.

This does not mean that this page cannot be helpful to you in its present form. If you are aware of the limitations of the current state, you may find this page helpful long before it is officially published.

## Background

After I made the determination that I am content in my place of employment for the long-term (I’ll explain why that is at a later point – why I think my job as a civilian Software Engineer for the Air Force is the right place for me, despite the fact that I keep getting other offers), in mid-April 2021 I set myself to the task of purchasing a house. This page contains a snapshot of my process.

I regularly make decisions in a manner similar to this (I have a great many scattershot Google Docs and the like containing variables, weighting schemes, justification, and research links), but have been deficient in writing them up formally. Hopefully this will be the first of a wider group of such write-ups. Consistency is on my Todo List.

I start this page off by explaining why you might want to purchase a house. Then I move into examining the sort of procedure you might want to follow in purchasing a house. Finally, I use my own decisions to give an example of the procedure in a specific context and set of circumstances.

## Why buy a house (as opposed to some other real estate investment)

Becoming an adult in modern American society proceeds something like the following (at least for many middle-class people):

3. Get a job.
4. Get married or buy a house.
5. The other one from (4) you didn’t do.
6. Have kids.

For many, buying a house is thus an integral part of being an adult. It represents independence – physical and financial. It also so happens that buying a house is an excellent long-term investment, helping one build and maintain wealth.

For all these reasons, I won’t spend a great deal of time belaboring the finer philosophical points of “the why.” In other words, rather than focusing on why you might want to invest in personal real estate of some form, I will instead focus more on which sort of personal real estate investment you should make.

### Why purchase a house instead of renting a house?

The largest reason is financial. When you pay a landlord rent, that money ceases to be under your control; there is no future potential for you to liquidate it and transfer it into other purchases or assets. To put things simply, you do not build equity when you rent, and you thus do not build wealth. In the long-term especially, this will greatly eat into your overall wealth gains.

The chief reason to rent is flexibility. It is less hassle to terminate a lease and move than it is to sell property. That is about the only advantage. From a financial perspective, due to the lack of equity-building, renting is terribly suboptimal.

Because there are costs associated with buying and selling houses (commissions for real estate agents and closing costs), there is a so-called break-even-point. For time-spans shorter than this point, you are probably better off financially renting. For time-spans longer than the break-even-point, purchasing real-estate is superior.

It is difficult to generalize globally, but a good rule of thumb is that if you plan on staying anywhere for longer than several years, you should probably buy property rather than rent.

### Why purchase a house instead of renting an apartment?

Renting an apartment has the same financial disadvantages that renting a house does (namely, not building equity, but instead losing money to the black hole of rent). However, it has some further disadvantages. In no particular order:

• Dollar for dollar (compared per square foot), being in an apartment gives you much less overall space than a house. Usually it is by a lot too.
• Being in an apartment is less likely to give you your own washer and dryer. This is disadvantageous from a convenience perspective.
• Being in a non-first-floor apartment forces you to carry groceries and other purchases up stairs (perhaps even multiple flights of them).
• If you have a bike of any substantial worth (such that you are leery of locking it up in a shared space), you have to carry it up the stairs and into your apartment too. I can say from personal experience that this is not ideal.
• Being in an apartment is less likely to give you your own garage. (And even if you can get one, expect to pay a hefty upcharge per month for it).
• Being in an apartment is less likely to give you your own hose.
• Being in an apartment will not give you your own yard.
• Being in an apartment will likely incur extra fees if you have pets, and you will not be able to have pets (dogs) past a certain size.
• Being in a gated apartment community makes it much more difficult to have people over without hassle. They cannot just park on the street out front, as they would be able to if you had a house.
• This may not be important for some people, but if you ever plan to have any sort of regular events at your house – game nights, Bible studies, football watching parties, you name it – this becomes a big deal.
• Being in an apartment, you may have to deal with irritating noise from neighbors (or their children, pets, etc.).
• On the other hand, being in an apartment also limits the things you can do without annoying neighbors around you with noise. Things of import, in my estimation:
• You may be unable to walk on a treadmill (when working at a standing desk, e.g.) to burn calories basically for free, since it will generate a fairly substantial amount of noise. This is the biggie for me personally.
• You may not be able to jump rope in your apartment. Jumping rope is excellent exercise, and by far the most fun form of cardio that can be done inside, in my opinion.
• You may be unable to ride a bike on an indoor cycling trainer (or rollers). This is an alternative to jumping rope for indoor cardio.
• You may be unable to watch movies or play music using a surround-sound stereo system, particularly late at night.
• You may be unable to have the sort of pet you want, since it might be too noisy (at least in your neighbors’ opinion).
• If you plan to do substantial weight training at home, you may be unable to do it in an apartment: the rental office may have an issue with you having a power rack, barbells, and such in your apartment, or the floor may just not support the weight. (Also see the noise consideration above).
• To be fair, some houses are not constructed in a manner conducive to weight training either. You need a solid foundation to support heavy weights.
• Etc.

Condos are like apartments, but you buy them rather than renting. They are generally popular with older folks because they remove much of the maintenance associated with owning property:

• Compared to houses, condos have less space, so you have to clean and take care of less floor space overall. (If you have less stuff and don’t need more space, why deal with the hassle it brings?)
• Many condo organizations perform general maintenance (from changing light bulbs to dealing with plumbing issues) for you, although you will pay a handsome annual fee for this privilege.
• Almost all condo organizations will do the entirety of the yardwork and maintenance on outside facilities associated with the complex. Yardwork is probably the most difficult type of home maintenance for elderly folks to do on their own.

Given all this, you can see how condos can be a good option for some people. However, condos suffer from most of the same disadvantages that apartments do, as enumerated above. You are still living in a community with others (as opposed to having space that is truly yours and yours alone), with all the attendant disadvantages that brings. With this being said, if you buy into a condo community with very stringent screening (generally on the basis of income), you can usually sidestep any and all neighbor problems. Condos tend to inherently be more choosy than apartments in this regard (likely because there are a disproportionately large number of wealthy elderly folks who don’t want problematic neighbors, and are willing to enforce high overall costs to keep such people out).

One of my biggest beefs with condos is that they are very expensive per square foot. As I will discuss further below, one of the greatest benefits of investing in real-estate (rather than stocks, say) is that it brings you a great deal of practical utility that you would not otherwise have: rather than just being numbers on a screen, you can make good use of your wealth (by letting others stay with you from time to time, e.g.). Puny condos undercut this concept significantly.

This observation is one of the reasons I personally rule out condos as an investment. Here are a few other things that are quite important to my particular situation (although YMMV):

• I wouldn’t probably be able to use my treadmill when I am working on my computer in a condo. This is the biggie.
• Dealing with and storing my large bike would be a pain in a condo.
• In a condo, I probably wouldn’t be able to watch movies and play music as freely as I would otherwise desire to do if I did not have to worry about bothering neighbors.

Finally, condos are still a worse overall financial investment than houses because you pay through the nose for maintenance convenience with condos. Even if you have moderate HOA fees, pay for a lawn care service, and pay for a bug service, you will still come out money ahead overall with a house (at least you are likely to). The condo fees are similar to rent in that this money is simply gone every month, and you build no wealth with it.

Sidenote

Much of the reason why houses are better in this regard is because you have the ability to choose the companies and contractors you hire: you can play the market rather than being stuck with what is mandatory through the condo organization.

It takes surprisingly little work to beat the market, and if you are willing to pay someone’s teenage kid to mow your lawn (e.g.), they’ll be happy to earn the pocket money and you’ll be happy to save on overall costs. Everyone wins.

Also, while this one is more of a toss-up (depending to a higher degree on individual circumstances), condos typically come with more bells-and-whistles in shared amenities than middle-class houses with reasonable HOA covenants do. Given that good public parks are a thing in most of middle-class suburbia, I’ve never much understood the practical value of paying tens or even hundreds of dollars extra every month to maintain a private residents-only pool, tennis courts, and so forth. It seems like wasted money to me.

The reason why condos lose to houses in this regard is twofold:

1. In my observation, condos are considered more “luxury” than houses in middle-class housing communities, so you are much more likely to get stuck paying for such amenities because it is what your average condo neighbors actually want, even if you don’t.

With all this said, since you can at least build equity with condos, they are much more difficult to rule out as an investment than rented housing options. I have laid out my opinions here, but I encourage everyone to think a bit harder before definitively crossing this option off the list. Your circumstances and preferences may not closely follow mine.

## Why buy a house or multiple houses (as opposed to some other higher-return financial investment like stocks)

I break with some of the commonly-accepted financial advice here. Most financial people will tell you that your ROI is better in the stock market than in real-estate. They may be right… if you only look at things from a financial perspective.

After all, living in a cardboard box on the side of the road is “better” financially. (For a more sophisticated riff on the concept, you might start with r/vandwellers). However, life is more than accumulating the maximum amount of money. A lot more.

In my opinion, most people are too concerned with their retirement portfolios. What’s the point in working yourself into the ground during your prime to enjoy some tropical island retirement when you are old and achy? Don’t forget that you might get hit by a bus tomorrow anyhow.

I could derail substantially here, but suffice it to say that if you are investing at least up to your company’s match (if applicable) in a 401K and/or IRA (and probably up to 10% or so of your overall income is still prudent), you will reap the benefits of compound interest over time. If year-over-year return is 8-10% in large-cap hands-off index funds (the sort wherein you live and die by the market), after 30 years of continuous saving, you will be more than fine, especially if you retire off to a quiet rural community with a low cost of living rather than some mansion in the Caribbean.

So if investing more money in the market isn’t strictly necessary to have a smooth retirement, why on earth is it pushed so hard? It’s a complicated question, but I believe much of the answer lies in American materialism. If you instead decide to step off the hamster wheel and exit the rat race – to the point that things other than money govern your decision-making more – I believe that investing in stocks suddenly goes from the best option to one of the worst. This is because the people ultimately benefiting the most from your money when you invest in stocks are the wealthy shareholders of big corporations. Those folks don’t need more money, in my opinion. It’s much better to get practical value out of your money yourself.

### How real estate brings you practical value

Buying a house is an investment – in large part, the money you put into it can be gotten out later. Real estate is thus tied to wealth – the overall assets you control. (Wealth and income are very different, by the way. Plenty of people with lower-income jobs end up with more wealth than doctors and such because they save a lot more and avoid pointless consumption).

Someone I know at work and her husband own nine (!) houses outright. This is on the extreme end of the real estate spectrum. There are large benefits to their situation (a large number of tenants paying rent gives them a large amount of passive income on top of their dual salaries), but what interests me more is the potential to use the real estate for good.

There are many groups that I might wish to personally use my assets to help:

• Disabled veterans.
• Single mothers escaping from abusive situations.
• People with rough backgrounds (crime, drugs, bad parents, etc.) somewhat outside of their control – people that are at a steep disadvantage (including financial) in life.
• Hardworking foreign immigrants trying to get set up in America.
• Etc.

Real estate is one way for me to build wealth (contrast excess consumption and pointless materialism) while also putting said wealth to practical use – for the benefit of myself and people like these. Having additional houses to rent out at market value (or perhaps lease to people for a steeply reduced price, if you so choose) or even just extra space in your own house lets you bless others in a way that stock portfolios can’t match. Physical hospitality, while perhaps not greatly in the cultural eye at present (particularly given modern people’s fear and distrust of strangers), has always been a very effective way to positively impact the lives of others.

While I do not think I’ll ever own nine houses, I will start with one, and perhaps work my way up to two or more. However, the idea for now is that I might presently buy a house larger than I “need” for just myself – because I can use the extra space for other things of my choosing. The money I store in this investment is thus working for me in a way that numbers on a screen do not.

At a later point in my life, I can still sell off my real estate investments and retire someplace cheap… but 10 or 15 years before many other people. (Trading money for time is something I am very opinionated about). I still built wealth and have this benefit. The point is that over the duration of the investment, that money was put to work in some way for me, according to my purposes, not for corporate shareholders.

Sidenote

I am also fond of the idea of peer-to-peer microlending – although more the interest-free sort (contrast the scalping common in this sphere) for causes I deem personally worthy. This is another way to put one’s wealth to work in a way that I find more palatable than lining the pockets of corporate shareholders.

My particular idea is that you give people interest-free loans (perhaps only accounting for inflation). That way people with bad credit or just poor finances who would struggle with interest rates on normal loans can have a lifeline provided by you.

Examples, perhaps:

• Interest-free loans for people hit with sudden large medical expenses outside of their control.
• Interest-free loans to put hardworking but disadvantaged students through college without high-interest debt.
• Interest-free loans for struggling people from other countries with far fewer economic opportunities than ours.

Of course, a lack of collateral for these loans makes them a pretty terrible investment if what you are concerned with are low-risk returns on your capital. My whole contention is that there are more important things to worry about in life once you’ve done your due diligence to provide for yourself and your own.

I will, however, be quick to advise people to exercise high degrees of caution and prudence in all this. There are many lazy people and scam artists out there. The trick in all this is finding the deserving individual, the diamond in the rough who needs the money and is worthy of it. Being a good judge of character helps a lot.

## What if you are single?

At time of writing, I am buying a house and I am not in a relationship at all, much less presently heading towards marriage with someone.

The financial considerations (re: building equity) hold regardless of your relationship status. However, buying a house when you are single does present some interesting considerations if, like me, you would like to find someone and get married in the future. Unless you want to go through all the hassle of selling and buying again, you will need to find a house that is likely to meet the expectations of a future spouse.

This is much more likely to be an issue for us single guys out there. It’s a generalization, to be sure, but dudes just tend to not care so much. For example, I lived in pretty cramped circumstances in college (renting a small room in a house split with other guys) to save money. When I moved into a much nicer apartment once I started working my well-paying job as a Software Engineer, I mostly wrinkled my nose and became unhappy that I had to pay more than twice as much money to get a bunch of space and shiny features I didn’t feel like I needed. Yeah, it’s really nice and stuff. But I don’t care.

The risk in this is if I buy a house with my “engineer brain” only, it’s likely to end up less-than-ideal in the eyes of most women. So, if you are a single guy buying a house, try to get the opinion of the women in your life when looking at houses. Or, at the very least, read articles on the internet explaining what women want in houses, and then compile a research report to inform your decision. (Yes, I actually did something along these lines. Don’t judge me).

### If you are single, buying a house is proportionally more beneficial if you already have roommate(s) lined up

Married people tend to save lots of money. (Until you have kids, that is. Kids are expensive). This is because living together as humans just saves lots of money. In fact, in many or even most other countries in the world, people tend to live many more people to a house for this reason alone. Statistically speaking, we in the West are the weird ones, not them.

After being alone in my apartment for ballpark $1050/month (split between rent, electricity, water/sewer, and internet) for about a year, one of my friends moved in with me, and we each ended up paying around$540/month for the same apartment.

From the very first moment I thought about buying a house, I knew he was coming with me. Aside from saving $540/month myself, he will be paying me rent once we move into my house. (I’ll probably bump the cost to$625/month or perhaps a bit more since we get so much more practical value out of the house). This means that the net financial delta for me is really more like +$1200/month. That’s about the same as my planned 15-year mortgage payment on my loan. Having roommate(s) makes investing in a house as a single person an even better financial decision. If you eventually do get married, you can then use the same house, but you’ll have paid a substantially higher percentage of it off. ## How to buy a house: Steven’s procedure in the hypothetical There will be minimal discussion in this section, but mostly just description. ### Step 1: Get your credit in order Honestly, this step should start as soon as you can convince a bank to give you a credit card (i.e., well before you are actually aiming to buy a house). The sooner you start building credit, the better. The goal is to get to 750+, where you are basically guaranteed to get a loan from whomever you want at the best rates. ### Step 2: Identify your expected time span What you need to consider will change if you only plan to spend 5 years in the same house instead of 20 or more. Keep in mind that life has a way of interfering with one’s plans, so you should never overextend yourself financially (with the expectation of staying for a long time to amortize costs, e.g.) in case something comes up and shatters your plans. This doesn’t mean don’t plan, but just don’t depend on things turning out exactly how you want them to – you should leave a bit of a safety buffer for yourself in order to sandbag against the unexpected. ### Step 3: Calculate your overall budget You should probably sink just about as much as you can into your initial down payment and mortgage thereafter (prepaying the loan = paying more every month than you are contractually required to, in order to pay down the principal faster), as one of the cardinal rules of good finances is getting out of debt ASAP. There are two exceptions: First, you should leave yourself a buffer of three to six months living expenses in case an emergency comes up. Much better to face mortgage interest (~3%, at time of writing) than credit card interest (some stupidly high extortionary interest rate: 15%, 20%, or perhaps even more). Second, you should still put as much in your 401K (if you have one) as is necessary to get the maximum match from your employer. It’s literally free money, and also beneficial for your taxes. Some people don’t advocate so strongly for paying off debt, arguing that you can make better use of the capital by investing in the stock market (which has higher year-over-year returns of 10% say, outweighing the 3% or so negative interest rate on home mortgages). The thing I don’t like about this is that you undertake extra risk, and at best, your additional gains aren’t all that earth-shattering (at least if you are not one of those investment geniuses). Paying off debt (negative interest) is essentially reasonably-high guaranteed return. Nothing else investment-wise can touch that. (Unless you break the law and engage in insider trading). If you can’t put 20% down upfront, you’ll have to run a more detailed cost-benefit analysis to determine whether the time is right given your budget realities. If you can’t put 20% down upfront, you’ll typically have to pay private mortgage insurance and perhaps end up facing other disadvantages as well, as from a lender’s perspective, you are a higher risk. ### Step 4: Identify the local real estate agent you want to use Reading online reviews is great and all, but I think it probably makes sense to get word-of-mouth recommendations from family (if your family is local to you), friends, and co-workers. That way you will be able to ask them very specific questions about the agent(s). I got my agent this way (through a co-worker), and I’ve been happy with how things worked out. Make sure the agent you go with deals with the geographic area(s) you are interested in. Things are not the same in different places, so you really do need a local agent. Some people advocate making all your decisions regarding what you want before reaching out to an agent. I never understood this. It is literally their job to help you through the process. Unless you are yourself a real estate professional intimately familiar with the market in the area you are buying into, your agent will simply know a lot more than you, and it is therefore wise to make use of their knowledge and expertise rather than trying to go it alone. The next few steps especially (but really all of the remaining ones) should be undertaken with you in close contact with your agent. They can help you make the decisions you will need to make in order to filter down the pool of houses before you, which is likely to be quite large initially. For them to be able to most effectively help you, however, they will need to know your expected time span and your budget. That’s why those two steps come before you start talking to an agent. ### Step 5: Evaluate the state of your local real estate market With the help of your real estate agent, you should think about things like: 1. Is the overall real estate market right now inflated? (Buying low and selling high is the ideal, but due to the equity considerations, buying a house is usually a good idea if the alternative is renting an apartment long-term). 2. How about your local housing market specifically? 3. Are local real estate prices projected to go up or down in the next 3 years? 5 years? 10 years? 20 years? What factors are driving this expected appreciation or depreciation, and how certain are they? Are some local areas projected to appreciate at a higher rate than others (e.g., areas with lots of new construction and expansion? Areas with new high schools?) 4. What is the general state of used houses (resales) locally? 5. What is the general state of new houses locally? ### Step 6: Decide which residential areas in your geographic location are acceptable to you (it can be just one, or a set) Your agent should be able to tell you lots of valuable information about the different places to live in your area. If they are any good, they will know which areas are expanding and seeing higher demand, which areas are more stable and built-out, and other things of this sort. Here are some factors you should be thinking about: #### Commute character For anyone who is not teleworking full-time, commuting to work is an unavoidable fact of life. Commute character thus becomes an important factor to consider. Here are some general things to think about: 1. Which living area gives you a commute with less overall people/traffic? 2. Which living area gives you a commute with prettier scenery (trees, fields, orchards, and so on)? 3. Which living area gives you a commute with higher average sustained speeds and fewer stops (stop lights and stop signs)? Think twisty single-lane country roads vs. urban sprawl. Stopping less is more fun overall, more energy efficient, and also saves brake wear over the years. ##### Biking to work After some thought, I personally decided that biking to work was something that I wanted to do for time-efficiency’s sake (combining commuting with exercise, greatly reducing the time opportunity cost that usually makes cardio grossly time-inefficient). Commuting 5 days a week on your bike – assuming you push yourself reasonably hard when you commute, and your commute is long enough (say, 25ish minutes of proper cardio one-way, leading to 50 minutes of cardio per workday) – will completely eliminate the need to do any other cardio exercise, and will let you stay in perpetually excellent shape rather effortlessly (as long as you keep your diet at least somewhat moderated). The biggest issue with biking to work is that you have to share the road with two-ton metal cages that have the potential to kill you instantly, at any moment. Unfortunately, the drivers of said cages are all too often less-than-focused on keeping their attention on the road to preserve the safety of others. Quite to the contrary: texting while driving, talking on the phone to the point of serious distraction while driving, messing with a GPS while driving, driving while drunk or high, eating/drinking while driving, putting on make-up while driving, trying to discipline misbehaving children while driving – people can and do engage in all these behaviors when behind the wheel, despite the fact that doing so could cause them to kill others by their negligence. These behaviors do not only affect motorcyclists who share the road directly with cars, but also cyclists on the side of the road as well. In fact, riding electric bicycles carries plenty of risk (FortNine is a motorcycling channel, so of course this video is a bit biased in favor of motorcycles, but most of the points are perfectly valid). Anyhow, all this is mostly to establish the point that if you, like myself, decide to bike to work exclusively (or at least very regularly), considerations relating to doing it safely and effectively will actually limit you substantially in choosing a house. Here’s what I mean: 1. You can’t live too far far away from work, as even the fastest electric bicycles in the United States (at least the legal ones) max out at 28 MPH. (You can easily buy or build bikes that will go faster than this, but aside from the legal issue – for which there are reasonably good arguments on all sides – going much faster than 30 MPH on a bike does inevitably increase your risk profile by a substantial degree, as bicycles don’t have nearly as much stability as motorcycles proper). I personally think a bike commute time between 20 to 30 minutes is ideal: long enough for you to warm up and cool down a bit (important in all exercise), and long enough for you to clear your head and transition from home to work (and vice versa), but not so unreasonably long that you end up doing way more cardio in a week than is actually necessary or beneficial health-wise. Assuming that it is functionally impossible to maintain max speed at all times (due to stops, turns, occasional very steep hills, and the like), if we build in a 5 minute buffer to account for such things, then about the furthest your house perhaps should be away from your place of employment is ballpark (30 minutes - 5 minutes) * (28/60 miles per minute) = ~11.67 miles. Note that it is entirely possible to live closer than this while still staying within that 20 to 30 minute sweet spot: simply use less electric assist such that you end up riding slower. In fact, if you live close enough, you might be able to save a lot of money by using a non-electric bike that is pedal-power only. (Depending on your bodyweight, fitness level, and whether or not your bike has drop bars that let you maintain a more aerodynamic posture, most people can probably output enough watts to sustain 15 MPH on their own power alone, at least). 2. To minimize risk, you want to avoid contact with cars as much as possible. Therefore, to bike to work safely, you ideally want one or more paths from your house to your work that follow only low-traffic roads. In my opinion, to be safe, 90%+ of your commute should avoid real traffic (basically, you should only mix with traffic if it cannot be avoided in any way). 3. Further, since most traffic accidents occur at or near intersections, it is ideal if your low-traffic commute also avoids intersections as much as possible. This is much easier on twisty country roads than when you are more in an urban area. For most people, these three considerations together will very substantially narrow down workable housing options. #### Proximity to practical locations No matter where you live, an important factor to consider is your proximity to practical locations. (You should also evaluate to what extent you can hit these locations on your way to and from work, for time-efficiency’s sake). 1. A good gym. (It needs to have a sufficient quantity of free weights, if those are important to you like they are to me). 2. Grocery stores (where I am, I evaluated proximity to Publix and Kroger, but grocery chains vary by region). 3. Pharmacy (may often be combined with one’s grocery store nowadays). 4. Home Depot, Lowes, etc. – a good home improvement store. This one is important for home ownership! 5. A local church (or churches plural) acceptable to your theological persuasion – if this sort of thing is important to you. 6. Walmart, Target, and other large general-purpose stores. 7. A mall proper, if that matters to you. #### Proximity to larger urban centers If you have the option of living on one side of town or the other, which puts you closer to the large city in your region – where you might go to catch a plane, or find some medical specialist, e.g.? If you live in a large urban center already, this matters less. Then it would be more like proximity to downtown where more stuff is. #### Proximity to parks and/or nature trails If you favor mountain biking for cardio over bike commuting to work (an option I considered for quite some time before eventually settling on the latter – you really can only do one, since only so much cardio makes sense), being close to good single-track trails takes on a great deal more importance. Even if not, hiking trails are something that you might want to prioritize being close to, as hiking out in nature is a most excellent relaxing activity (one of the very best, in my estimation of things), and a great way to spend time with family. I personally favor narrower single-track trails over double-track (and/or even yet wider gravel/dirt roads proper), and most especially paved trails. Narrower single-track trails get you immersed in nature much more. While routes for bike commuting were more significant in my personal housing decisions, this was also an important factor for me. #### Overall safety Crime rates (theft, armed assault, sexual violence), average income level (the lower the worse), drug use, etc. #### School zoning As a general rule, it is always ideal to buy a house in the area that is zoned for the best schools in your area. This is an important factor for stable property value long-term, as it ensures consistent demand for your house. If you plan to send your kids through public schools, it becomes critically important. In fact, if you actually plan to send your kids through public schools, this should probably be your highest ranking criterion. For better or worse, the difference between our public education system’s best schools and not-so-great schools is absolutely enormous. Do it for the children! Keep in mind that redistricting can happen, especially if local politics are volatile. Gentrification typically prevents it (people desiring good schools for their kids hold greater financial and therefore political power, on average), so you’ll probably be OK in an expanding area that is gentrifying. ### Step 7: Decide how much land you want your house to be on In my way of looking at things, there are usually two general options: first, you live in a neighborhood with many other houses (each having a plat of land probably sized at a half-acre or less), or second you live out in the country (or at least more out in the country) on an area of larger acreage (perhaps just somewhat larger, perhaps a lot larger). How much land do you need? My answer to this question is essentially as follows: because there is opportunity cost in owning more land (more upfront purchase cost, more maintenance to take care of the land), unless you know you need a large amount of land for some specific purpose, I do not believe most people ought to buy a large amount of land. You should probably be able to figure out pretty fast if you would be well served by owning more land: • If you wish to raise chickens, goats, cows and so on (to get eggs and milk for little cost, among other reasons), you probably can’t do that in a neighborhood proper, so you’ll need more land. • If you wish to grow crops of your own in any capacity (anything from a small vegetable garden to an orchard to tractor-farmed agricultural fields proper), you will likely want (a lot) more land than typically comes with suburban houses. • If you have horse(s) and don’t wish to pay for stabling costs (i.e., you wish to care for the horse(s) yourself), you’ll obviously need a fair bit of land. • If you want to shoot guns on your own property without having to go anywhere, you’ll need more land. • If you want to hunt on your own property without having to go anywhere, you’ll need more land. • If you have very large dogs (and/or very active dogs and/or lots of dogs), and want to to let them run free more than they’d ever be able to in a suburban neighborhood, you’ll need more land. • Etc. These things don’t apply to you? I’d probably say you don’t need to buy more land. Why buy something you don’t really need? Some additional considerations: • Pro: being on more land of your own will give you complete privacy in a way that neighborhoods cannot. It is not for no reason that the anti-establishment types always end up on their own land rather than being in suburbia. I personally think that houses in neighborhoods offer enough privacy for most folks (contrast apartments and condos, which unavoidably put you in closer proximity to others), but then again, as always, YMMV. Not everybody is me. • Con: if you want to buy more land of your own, the cost is likely to be prohibitive unless you buy land further away from built-out infrastructure. It’s just how things work. Land is dirt cheap if it is out in the middle of nowhere, but if it is prime real-estate and well-connected, you will pay through the nose for it. Dollar-for-dollar then, you are almost guaranteed to end up closer to useful things (your place of employment, grocery stores, gyms, etc.) if you live on less land in suburbia than if you live on more land further away from everything. • Con: almost all top school districts center around suburbs. While it may not be completely impossible to live on a larger quantity of land while being zoned for the best schools in your specific region, I wouldn’t hold your breath regarding such. Recall that aside from the education of your children, buying a house in a good school district is excellent because it ensures consistently high demand for your house, improving resale. • Con: Simply due to supply and demand, you will likely have a much harder time buying and selling a rural farmhouse on more land than a neighborhood house on less land. Most middle-class Americans want to live in the white-picket-fence sort of environment because they neither need nor want more land, and would rather be more conveniently located. This is not to say that there is no market at all for the former, simply that most people are more likely to be interested in the latter, and therefore the market for the latter is much wider. I confess that in terms of romantic idealism, being out on the frontier (as it were) with just your loving family – dogs running out joyfully as the sun slowly rises on the horizon, the muffled crow of a rooster echoing from the barn – has a very strong attraction. I get it, I really do. Everyone will thus have to make their own choice here. ### Step 8: Decide whether you want to focus on looking at new houses or used houses Usually, you will be able to come to a pretty firm decision on this one. Depending on your budget and income, a used house may be the only thing that works financially. If you have the budget and income, then the next thing you should think about is your time span. As a rule of thumb, if your time span is shorter rather than longer, you should probably go used. On the other hand, the longer you plan to stay in a house, the more a new house tends to make sense as a value investment. If you have the financial means and plan to stay in a house for at least a reasonably long span of time (i.e., you have met these initial screening criteria), then that is when you need to sit down and really go through the pros and cons of both. Keep in mind that houses are an investment – you can recoup the money you sink into them. New houses don’t depreciate horribly like new cars do (new cars are usually always a terrible investment), so there is a lot less downside in buying a new house, especially if you take pains to pay off your mortgage faster than required (pay down the principal rapidly so that you pay less overall interest). Here are the general pros and cons of new vs. used: Pros of new houses: • Less hassle: less stress, worry, doubt, decision paralysis. You just pay sticker price and that’s that. Don’t underestimate the value of this, especially if you know you are an individual who personally struggles to deal with huge, drawn-out decisions. • The listing agent, if they are affiliated with the builder (as is pretty common with new homes), will be intimately familiar with the house they are selling to you. They will be able to answer any and all questions you have (probably rapidly too), which may not always be as true for listing agents of properties that they are not as directly affiliated with. • Customizations, if desired. This can be a big deal, depending upon what the alternative is (i.e., the opportunity cost of not being able to choose things). Here are some standout things, in my opinion: • You can ensure that the HVAC system, water heater, and appliances aren’t cheap garbage that you will have to rapidly replace (or constantly do maintenance on). Paying the delta to get quality components upfront is the most money-efficient way to get quality components (you pay just the cost difference between the default option the builder provides and the better option), and this is something you can only do with new houses. (To be clear: if you don’t need to upgrade, don’t waste the money. I didn’t need to, e.g., but it was nice to know in buying a new house that I could if I wanted to, rather than ending up stuck with poor choices out of my control). • You can get Ethernet cleanly wired to all the main rooms of your house. (Wired internet connections eat WiFi speeds and WiFi connection stability for breakfast, and are better in literally every way except convenience). • You can ensure that all bathrooms, the kitchen, the dining area, and shared living areas have an easy-to-clean flooring option (vinyl plank flooring, ceramic tile, etc.), rather than carpet. This one is quite important, in my opinion. • A newer roof, HVAC system, appliances, etc. are statistically much more likely to remain problem-free and thus hassle-free. • Assuming you are buying from a quality builder (do your research), you eliminate all possibility of getting “a lemon” in any way. The quality of the house will come to you as a known value, without any possibility of someone painting over cracks/putting sawdust in the engine, as it were. • Even more, most of the time you will get a warranty on the new house, at least for a year. This is enough time for any serious problems in appliances and so on to show their heads. You never get a warranty with resale houses, and have no equivalent benefit there. • If real estate is projected to rise in your area, a higher-value new house will appreciate more. (It would also depreciate more if the market crashes, but if you are pretty sure about the market growth, this is actually a pretty huge pro). • There is higher demand for new-ish houses than much older houses. If you plan to be in the house for a longer period of time (15-20 years or more), selling a house that is currently new 15 years from now will be much easier than a house that was new 15 years ago (and thus 30+ years old when you try to sell). You are making your future resale of the house much easier, in other words. Neither here nor there: • Real estate is an investment. Paying more for a house is not necessarily worse in the long-term, as you’ll get out what you put in. What is to be avoided is overpaying for a house – paying an inflated price, something more than the house is actually worth. In that case, you have lost money that you otherwise wouldn’t have lost. Cons of new houses: • A more expensive house means a larger loan, meaning more debt, meaning higher overall interest paid. This is true even with a shorter-duration loan (e.g., 15 year vs. 30 year) with a lower interest rate (although the harm is minimized in such circumstances). Substantial loan prepayment helps reduce this con even more. • If your new house is getting built (rather than you buying a pre-built new home), interest rates once the house finishes getting built (6+ months from the beginning of construction, typically) might not be as advantageous as when you were first looking at houses. (On the other hand, they might be better too). It’s best to treat this as a potential con rather than a definite con. Also, since the Fed has already been keeping interest rates so low for so long, until something big changes policy-wise, this is unlikely to matter too much overall. • If your new house is getting built (rather than you buying a pre-built new home), you will probably have to pay a few more months of non-equity-building apartment rent. If you have a roommate and have a low rent payment, this will obviously hurt you a lot less than if your monthly rent is proportionally higher. Also, if you are smart about things and plan many months out, you can probably end up not adding any extra time to your apartment stay (or at least very little time overall). Most people temporarily end up in apartments rather than houses for good reasons (you just moved somewhere, e.g., or need to build up to a 20% down payment on a house) and sign leases from 6 to 12 months, so as long as you start looking at houses early on in your lease, you probably won’t end up losing much money here. You should always be very proactive! My reading of the situation is this: if you have the capital to put more than 20% down initially (to avoid having to pay private mortgage insurance and such), if you have the income to support a shorter-term mortgage with lower interest rates and at least some degree of prepayment, if you live in a place with a housing market that is almost certain to appreciate (making a higher-value asset relatively superior), and if you plan to stay in the house for 15-20+ years, buying new is actually the most logical choice. If any of these things aren’t true (particularly the last two), you’ll need to think about it more. If none of them are true, you probably shouldn’t buy new. ### Step 9: Decide on the number of bedrooms and bathrooms you want You should always have at least two bathrooms. The marginal benefit of additional bathrooms after that is much lower, in my opinion. There is some benefit in having at least two “public” bathrooms external to the master suite if the master suite (containing the master bathroom) is ever expected to be closed-off for any substantial periods of time, making that bathroom generally inaccessible. If you don’t mind making the master bathroom (and hence master suite) a publicly-accessible portion of your house, then this doesn’t matter, and you can get away with just two bathrooms, with one of them being the master bathroom. Some houses decide to make a bathroom only accessible from a single private (non-master) bedroom. This has always struck me as a dumb design choice, so I would avoid such houses. I would actually try to get away with just two bathrooms if you can, because then you have to clean less! (Additional bathrooms add a lot more cleaning time than additional bedrooms – more toilets, showers, etc.). Sidenote An astute reader would probably ask “But Steven, if it doesn’t make logical sense to have bathrooms attached to private bedrooms in general, then why in the world does it make sense to have a bathroom only accessible through the master bedroom?” Good question. Now go ask builders that! The problem is that there is an overwhelming market expectation that the master bedroom has an attached private bathroom. For this reason, even if it is objectively superior functionally to have the bathroom accessible externally, this layout simply doesn’t exist in practice. Boo hiss. In this way, while it would in fact be ideal if your house had two publicly accessible bathrooms, because the master bathroom tends to be accessible only through the master suite no matter what we might otherwise wish, then the upshot is that it becomes a strict non-negotiable requirement that there exists at least one other bathroom in the house that is in fact accessible externally (i.e., not just through some individual private bedroom). In my opinion, most people should probably stick to looking at houses having anywhere from 3 to 5 bedrooms. If you never plan to get married and have a family and never plan to have roommate(s), you might be able to go lower, or at least stick with only 3 bedrooms. (Keep in mind that demand for very small houses tends to be quite limited, which means resale will be more and more difficult the smaller you go). If you plan to have a bajillion children, you might want to go higher. However, for most people, these three configurations (3, 4, or 5 bedrooms) will probably be your best options. I personally feel that having a guest bedroom (on top of one or more sleeping options in the living room, like foldout beds – or better yet to my mind, stowable memory foam couch toppers) is excellent, as it lets you much more effectively play host to help other people out. This used to be more normal culturally than it is today, but nonetheless it is an easy way to bless someone else’s life in a big way with minimal disruption to your own. Anyone who shares this belief of mine is more likely going to want to steer towards houses with more bedrooms. Pros of larger houses: • There is generally higher demand for houses having at least 4 bedrooms (better resale). I’d say 4 bedrooms is probably the sweet spot. • A larger house allows you to have two or even three paying roommates while still having a spare bedroom. Call it perhaps$1300/month or $1950/month vs.$650/month of income. An extra room would pay for itself in not much time if you manage to find someone to fill it, and then you have the versatility thereafter (if you get married, etc.).
• Larger houses are higher value assets (i.e., more expensive), and in appreciating markets, this is a pro, as higher value assets will appreciate more. Compare new houses, above.

Cons of larger houses:

• More space in the house to heat/cool => perhaps very slightly higher energy costs. More space in the house to clean etc. => perhaps very slightly higher time costs.
• Larger houses are more expensive, thus leading to you paying more overall interest (since you have larger loan principal). This is also discussed above in relation to more-expensive new houses.

My take on this situation is actually very similar to new houses. Some people need extra rooms (lots of kids, e.g.), and they have less of a choice. However, even if you could hypothetically get away with fewer rooms, it is still the logical choice to buy a larger house if the circumstances are right. For reference, as above, those circumstances are:

1. If you have the capital to put more than 20% down initially (to avoid having to pay private mortgage insurance and such).
2. If you have the income to support a shorter term mortgage with lower interest rates and at least some degree of prepayment.
3. If you live in a place with a housing market that is almost certain to appreciate (making a higher-value asset relatively superior).
4. If you plan to stay in the house for 15-20+ years. (Here, more to give that appreciation time to work than to deal with resale factors relating to house age).

As before, if any of these things aren’t true (particularly the last two), you’ll need to think about it more. If none of them are true, you probably shouldn’t buy a bigger, more expensive house with lots of bedrooms.

##### On non-bedroom rooms

Note that I have only been talking about bedrooms in all this. This is because in my opinion, the only dedicated room you should have aside from bedrooms (and the kitchen and bathrooms, obviously) is a living room. There are some houses with huge amounts of floor space that have very little extra utility since you get very low marginal benefit out of having more shared spaces after the first. (If you know you need a room for X purpose, then this obviously doesn’t apply to you. I’m talking in general).

Unless you regularly have tons of people over (such that you need to seat more than 8 or so people), a dedicated dining room is illogical. It is better to put a moderately-sized round table next to the kitchen (round tables can seat more people than square/rectangular tables), as close to the counters, oven, stove, and microwave as possible. This saves you time in the long run, as it makes it easier to transfer food from kitchen to table.

### Step 10: Take a cursory look at the features of homes in your striking range, given all that you have now decided on. Then compile a list of what is important to you.

To summarize, with the help your agent, you have now gotten a good overview of your local real estate market (including an understanding of future growth potential), and made a few important decisions:

• Which residential area(s) you are looking for houses in.
• How much land you want your house to be on.
• Whether you are focusing on new houses or used houses.
• How many bedrooms and bathrooms you are targeting.

The last big decision to make is what house features to prioritize. You probably will not be able to get absolutely everything you want (even buying new), but you should try to hit everything you believe to be truly important for your circumstances. I have tried to be pretty thorough below, but of course you should not take this to be completely comprehensive (and perhaps not everyone will agree with my ordering and priority). Nonetheless, this should be a decent start. Some things are definitely more important if you are buying used instead of new. You should always get used houses inspected by a professional to verify that the biggest red flags are not present. (New houses can go either way, depending on how much you trust your builder).

Before you decide on anything else, you need to decide how much work you are willing to do on a house before you move into it. If you are willing to pay for some pretty significant renovations to bring a house up to your standards, it will open up your choices quite a bit. On the other hand, if you want to be able to close on a house and move in immediately, you will need to find one on the market that is already pretty close to what you want. I think a large majority of people will probably fall into the latter group. (If you don’t belong to that group, you probably already know who you are).

#### Very important things

##### Roof

How old is the roof, and how many years is it supposedly rated for (=how long in its life are you)? How is its construction quality? If you are going to be somewhere that may have heavy windstorms (e.g., coastal Florida gets hit regularly by hurricanes), is the roof constructed to be able to handle such?

##### Earthquake-resistant construction

If you are buying a house in a region that more regularly experiences earthquakes, is the house constructed in a way that resists damage from such? (There are specific construction principles relating to foundations and so on that help in this regard).

##### HVAC

How old is the HVAC system, and how many years is it supposedly rated for (=how long in its life are you)? How is its efficiency (especially important if you have extreme weather for some of the year = very hot or very cold)?

##### Insulation

How good is the house’s insulation? If you have concerns, ask to see what electricity bills were like during high-stress months for the HVAC system. Differences here can add up to hundreds of dollars every year.

##### Plumbing

How old is the plumbing in the house, and how many years is it supposedly rated for (=how long in its life are you)? What is the general durability of the sort of plumbing used in the house? (Some of this will depend a lot on when your house was built – as in 1970s vs 2010s).

##### Hazards peculiar to older constructions

For substantially older houses, ask about potential safety hazards relating to older construction practices. Lead in the paint, asbestos, etc. If you have (young) children, this is even more important.

##### Mold and water damage

Has the house ever had any serious mold issues? Does it have water damage or leakages anywhere, or has it had problems with such in the past?

##### Wood-eating pests

Has the house ever had any issues with termites or other wood-eating pests? Does it have some form of treatment in this regard?

##### Infestations

Has the house ever had any issues with infestations of any kind (bugs, rats, etc.)?

##### HOA covenants and deed restrictions

If your house is in a community of some sort, does the community have a homeowner’s association (HOA)? If not, does the area at least have deed restrictions?

HOAs are something of a necessary evil. They typically have annual fees that suck away money that could otherwise go into building wealth, but they also enforce standards that guarantee property value, and generally help keep out problematic people. My take on them is as follows: if you can find one with reasonable annual fees (more like $250 than$1000) that is not too busybody-ish, and if none of the covenants restrict anything you were really interested in (as they likely would if you really wanted to raise chickens or goats or work on restoring cars out on your driveway, e.g.), then I think they are worth it.

If HOA covenants are rather thorough (enforced external appearance, enforced yard maintenance, and so forth), that is generally even better for you, as it will ensure stable value across the community. But again, you have to be willing to live with the restrictions yourself.

At the very least, if you aren’t buying into a housing community with an HOA, you should check deed restrictions so that you don’t end up with a neighbor who puts a mobile home next to your villa and subsequently nukes your property value.

##### The age of the house itself

Note that the overall age of a house itself may differ from the age of the roof, HVAC system, etc., if components have been replaced over the lifespan of the house. Some observations:

• The newer the better, generally. As materials age, they tend to develop more problems.
• As a rule of thumb, materials (particularly thermoplastic composites and metal alloys) get noticeably better every few years, as the material science folks make more advancements. Wood, concrete, and brick change less.
• With all this said, there can sometimes be a degree of “they don’t build ‘em like they used to” = modern corner cutting. You’ll need to do your research. Ask your agent if you are ever not sure about the quality of construction of a house.

#### Important things

##### Available internet and cable options

Does the house have fast cable internet (or, even better, fiber) at speeds that are acceptable to you?

As a general procedure, I would suggest deciding what you actually want to pay for, and then set that as your lower bound. For example, I am personally fine with speeds of 150 Mbps (and am too cheap to pay for more if I don’t really need it), so gigabit fiber wouldn’t be a requirement for me. The important thing is to make sure that you are getting capable modern internet speeds. A lot of urban folks may not know this, but internet speeds are still pretty slow in a lot of rural-ish America.

I personally see cable television and landlines as complete wastes of money: as to TV, you can watch everything online nowadays, making cable TV redundant and pointless; as to landlines, if you are already paying for cell phone plans, why pay for another phone line? Nonetheless, if either of these are important to you, you should look into them alongside internet options.

##### Natural gas and electricity, or just electricity?

Does the house use both natural gas and electricity, or just electricity? While this ultimately probably won’t matter too much, the price of one or the other may be relatively higher or lower (and/or more or less volatile) in your region. Also, one less utility to keep up with is one less utility to keep up with.

##### Water heater

Is the water heater that comes with the house sufficient for your purposes?

• Is the tank big enough for your expected usage, if it is a tank heater?
• If tankless… well you shouldn’t ever pay for a tankless water heater, in my personal opinion, as I think they are a completely unnecessary waste of money. Just avoid having everyone take long hot showers all at the same time, then you never need an advanced tankless water heater, and can save thousands of dollars.
##### Appliances and kitchen features

What appliances and kitchen features does the house have? Some things (e.g., a microwave) are easy to add, while others are not.

1. Oven?
2. Stove? (Is it gas or electric? Do you care?)
3. Microwave?
4. Fridge/Freezer? (How big is the fridge/freezer? Sufficiently large for your purposes? Would you be able to put a second one inside somewhere, or at least in the garage?)
5. Dishwasher? (If you find dishwashers important).
6. Sink garbage disposal?
##### Kitchen counter space

Is the counter space in the kitchen sufficient for your needs?

Note that the arrangement of the counters is also important: can the counter surface(s) be accessed from all sides, or just one side? How much space is there in the kitchen (for two people to be preparing things at once, for example)? The more open (meaning the counter can be accessed from multiple sides), the better.

##### Kitchen cabinet and drawer space

Is the cabinet and drawer space in the kitchen sufficient for your needs?

• Drawers below sink and counters
• Cabinets below sink and counters
• Cabinets above counters on the wall
##### Kitchen pantry

Is there a kitchen pantry? Is it walk-in? Is it large enough to suit your purposes?

##### Bathroom counter space

Is the counter space in the bathrooms sufficient for your needs?

##### Bathroom cabinet and drawer space

Is the cabinet and drawer space in the bathrooms sufficient for your needs?

• Drawers below sink and counters
• Cabinets below sink and counters
##### Bathroom storage closet

Is there a storage closet in or near at least one bathroom in the house? Such a closet is useful to be able to store various cleaning supplies, shampoo and cream rinse, soap, medical supplies, and so forth. If there is no such closet, you can add storage space with shelves. But shelves take up floor space, which may already be kind of tight.

##### Mirrors

Do the bathrooms have sufficiently large mirrors?

##### Linen closet

Is there an additional storage closet somewhere in the house that can be used for spare linens, towels, and bedding? It is not really necessary for this closet to be connected to the laundry room, but it is certainly not disadvantageous if it is.

##### Laundry room shelving

Does the laundry room have shelving above the space for washers and dryers that can be used to store detergent and other items relating to laundry?

It is possible to add wall-mounted shelving later, to be fair, but I have put this in this section since post-hoc shelving on walls tends to be much less robust (with correspondingly lower weight limits), unless you know where crossbeams are and actually attach the shelving directly to the weight-bearing portion of the wall structure (i.e., the wall frame).

##### Flooring type and distribution

What flooring type is used in different parts of the house?

• You want something resistant to liquid spills and easy to clean (vinyl plank flooring or ceramic tile) in the bathrooms, kitchen, and dining area, at the very least. I personally favor having such floors across all shared areas (like the living room and hallways) that might end up getting food or beverages on them if you have people over.
• Carpet in the bedrooms is fine and probably actually ideal. It helps muffle noise and is more comfortable, especially if you are doing yoga and such.
##### Windows

Does every room in the house have at least one window? I find this one quite important personally. There’s something about natural light that is quite attractive. And of course having windows will make rooms feel less “prison-like.” Having very large windows is an awesome experience (especially if you are high up – a view over a cityscape or cliffside, for example), but do keep in mind that more overall window area makes for more cleaning too.

##### Housing location in the housing community
• Houses close to the entrance of a neighborhood are somewhat less ideal as they will have more traffic go past them. (On the other hand, you are closer to the exit yourself, saving a bit of commute time). Also see the point directly following this one: houses near the entrance to a housing community will tend to be near a fast moving road.
• Houses that border a fast moving (40+ MPH) road (even if it is behind your back yard, for example) are less ideal as you will have road noise. You generally only want to be near residential roads.
• What is the view outside the back porch (if the house has one)? Do you back up to an undeveloped region (for water drainage, perhaps), another residential road, or something else? Either of those options are fine, although a more nature-filled view is probably ideal.
• Are you near anything else that would be disadvantageous?
• Sources of loud noises – stadiums, quarries, etc.
• A flood zone.
• Large power lines.
• Etc.
##### Relative house value compared to other houses in the community.

It is a decidedly good thing to be in the cheapest house in a neighborhood of more expensive houses. This is the ideal situation in terms of relative property value, as well as overall environment. It’s almost like you get to live above your means without the actual cost!

##### The age of other houses in the community.

Communities that are all built by the same builder tend to have houses that are all built around the same time. On the other hand, communities without HOAs and/or deed restrictions may contain some very old houses and some very new houses. The former situation (uniform house age in the community) is better by far, especially for new communities, as the community will have consistently high average property value for sales within the community, which will give your house a stable high property value.

If you are buying new, it can actually be a very good thing if you buy towards the beginning of the community’s construction (well, construction noise aside). That way, as more new houses get built, your house will tend to appreciate in value. This is essentially the ideal.

At any rate, what you want to avoid is buying into a community where some houses are very old, even if your house isn’t. That will drag your property value down unnecessarily.

##### Garage

How big is the garage (one car or two cars)? How much room is there in the garage once car(s) are pulled into it? Can you fit everything you want to in the garage (e.g., yard work equipment, bikes, garbage cans, etc.)?

##### Yard

How big a yard do you want? What sorts of plants are in the yard? Do you want or need a fenced-in backyard (useful if you have a dog that you want to leave out during the day)?

• Bigger yards let you do more things (and are probably better if you have kids and/or dogs), but on the other hand, they are more work to maintain.
• Grass requires fertilizer, weedkiller, and mowing, while shrubs and bushes and so on require constant trimming to keep them in check. Trees block sunlight and kill grass (but provide shade and are pretty). Mulch and pine straw are low-ish maintenance (and tend to smell nice when you first lay them), but you still have to replace them every once in a while.
##### Hoses

Do you have a hose in the front yard and the backyard both? Hoses are useful for various things, and having them in both locations is advantageous.

##### Bedroom sizes

Are the bedrooms big enough? Do they have closets? (Do they need to have closets in your opinion? In my opinion, every bedroom should have a closet). Decide how small is acceptable, and then set a lower bound. I think 11’ by 11’ is a pretty decent lower bound.

##### Avoidance of low added-value shared spaces

Does the house have more shared spaces than you want or need?

If it does, you’ll be paying for square footage that brings you little value. I’m rather opinionated here: as I see it, all you need in terms of shared spaces is a (sufficiently large) living room, unless you know you need another space to put X. (X might be a full-size piano, a pool table or ping-pong table, a power rack for weightlifting, etc.). You should know pretty fast if you have an X object or not.

See above for why I think standalone dining rooms are pointless for most people.

##### Internal separation

How much internal separation is there in the house? Is there a wall between the kitchen and living room?

• More separation (=walls) leads to better noise isolation. On the other hand, it can make carrying on conversations across the house noticeably more difficult than if you have an open floor plan.
• I personally like open floor plans much better. Comfortable noise-cancelling headphones are an excellent investment anyhow, and completely solve the noise problem… so why put up walls that otherwise get in the way if you don’t actually need them?

#### Things of less import

##### Ethernet in all the rooms

Does the house have Ethernet ports in all the rooms, or just one or two?

If you’ve only ever been on WiFi, you don’t know what you’re missing. Wired internet connections are faster and more stable by far. Having the wiring done natively through the walls is a lot less janky than running 50’ ethernet cables everywhere.

##### Separate landscaping water meter

Is there already a separate water meter installed to use for landscaping water? If there isn’t one, and you are connected to city water (rather than having irrigation water come from a well source, e.g.), you will get hit with sewer charges whenever you water your lawn… even though that water never goes into a sewer. This may increase your water/sewer bill by a fair bit.

Unfortunately, installing a separate meter is usually fairly expensive.

##### Large vaulted ceilings

I personally don’t care at all and can’t think of any huge functionality differences one way or the other, but some people seem to really want vaulted ceilings.

#### Design selections: colors and patterns

In general, it is best to have rather neutral selections (rather than “loud” ones), as they will likely appeal to more people overall, improving resale. Along these lines, you should most definitely go with a lighter paint color rather than a darker one, no matter the actual color (be it blue, gray, cream, tan, or whatever else).

There are many areas to consider in design selections, but it is important to view things altogether as one whole rather than thinking of choices as completely isolated. This is because you will likely have interfaces between your selections. For example, your main flooring choice (what is in your kitchen, hallways, living room, etc.) will probably come up against your bathroom flooring option and the carpet of bedrooms, so it needs to look good alongside both. With this said, here’s some clusters to think about:

General external choices

• External brick color (if applicable)
• External plank color (if applicable)
• External window frame/shutter color
• External door color
• Shingle color and pattern

General internal choices

• Wall color (paint color). You can vary it across rooms if you really want to, but I personally think it makes sense to have a single color.
• Main flooring color and pattern (vinyl plank or ceramic tile would make the most sense, in my opinion)
• Bedroom carpet color
• Metallic accessory finish (e.g., shiny nickel vs. matte black for towel rods, light fixtures, doorknobs, etc.)
• Fireplace lining color and pattern

Kitchen choices

• Kitchen countertops color and pattern
• Kitchen backsplash color and pattern
• Kitchen cabinets/drawers color and pattern
• Kitchen appliances color and finish (I personally like the clean appearance of stainless appliances)

Bathroom choices

• Bathroom flooring color and pattern (vinyl plank or ceramic tile would make the most sense, in my opinion)
• Bathroom countertops color and pattern
• Bathroom cabinets/drawers color and pattern
• Bathroom mirror frame color and pattern

If you buy used, you don’t get to pick most of this (a decided disadvantage). Changing paint color is usually pretty easy and not cost-prohibitive, but you will be stuck with the other things unless you do some more serious renovations.

I don’t think you can go wrong with neutral, understated design choices. They are elegant and timeless in a way that most eye-catching design choices are not.

Sidenote

You can get an absolutely great deal on houses that have poor aesthetic choices – most potential buyers will be turned off by ugly colors and perhaps a bit of a run-down look, and won’t realize how cheap and easy it is to fix these things.

The thing is, repainting is easy. Like really easy. It costs a litle, sure, but ugly houses might sit on the market for months and have their prices slashed substantially – as in tens of thousands of dollars.

Unlike more serious renovation work, it is pretty easy to clean up ugliness. In my opinion, this is one of the best open secrets/house buying hacks in existence: buying a house that is great on paper except for poor aesthetic design choices for a steep discount, and then fixing the cosmetics quickly and easily.

These are things that will increase the property value of your house. Should you spring for them or not? Well, decisions here follow mostly the same sort of decision-making as whether or not you should buy a new house or whether or not you should buy a larger house. If you can afford it, then you’ll get out the money you put in (as well as some added value in having your house be more desirable generally in resale).

In my opinion some things are no-brainers, as they are either functionally better, or at the very least completely free from functional opportunity cost:

• Granite countertops in the kitchen.
• It is actually best if the granite is mottled/speckled rather than a solid color, as the former option hides stains much more readily.
• High-quality stainless appliances in the kitchen.
• Marble countertops in the bathrooms.
• A large single walk-in closet for the master suite (or two somewhat smaller and separate: his and hers).
• A proper door on the shower in the master suite (rather than a curtain rod).
• Waterproof tiling around the bathtub in the master suite (if it does not come by default).
• Towel rods/rings and toilet paper holders in the bathrooms (if they do not come by default).
• Ceramic tile or vinyl plank flooring everywhere except bedrooms (rather than only having it used more sparingly).
• Both of these options are easy to clean and durable. Hardwood floors are more fragile and fiddly, and that is why I would forgo them in lieu of these other options. Natural stone tile (vs. ceramic tile) is not any better functionally, but is a lot more expensive.
• A screened-in back porch. This matters less if you live somewhere that does not have as many bugs, but down here in Georgia, you will get eaten alive by mosquitoes in the summer if you don’t have a screened-in porch.

There are a couple value-added options that I personally wouldn’t go for and don’t recommend (even if other people seem to like them):

• A fully tile shower (rather than a molded fiberglass shower, as is the default most of the time). Having waterproof tiling around the bathtub is one thing (not a lot of overall space to clean there, plus it’s better than having non-waterproof drywall around there), but having a fully tile shower actually increases the amount of cleaning you have to do by a lot!
• At the very least, if you do get a fully tile shower, try to get tile with smaller gaps (less grout showing) and a darker tile color so you can get away with less cleaning.
• Hardwood floors.
• As above, I just think ceramic tile and vinyl plank flooring are better options.

#### Things that you shouldn’t view as make-or-break, as they are easy-ish to add yourself or pay someone to install after-the-fact

##### Shelving

The shelves above the washer and dryer that I discussed above must be wall-mounted in order to take advantage of the space above the washer and dryer (there is no option to use a shelving unit that rests on the floor to take advantage of this potential storage space). I argue above that it may be beneficial to have these shelves in particular come built-in, as they will probably be more robust that way. Compare also any kitchen cabinets mounted above counters. In this case too you can’t use conventional shelving that rests on the floor to take advantage of that over-the-counter space, which is what makes these cabinets desirable to have stock.

These specific instances aside, due to gravity and physics, whenever you don’t have to mount shelves/storage to the wall, it is best not to, as the load bearing can then be spread out much more naturally (rather than a very high load being distributed across a single mounting point with high torque), and you’ll have much more versatility with what you can put on the shelves (as in you can get away with much heavier things). If you have your own shelves that you place on the ground rather than wall-mounted shelves, you can also get shelving options with wheels if you so desire, letting you move things around.

In any case, buying your own storage shelves to add to your house is easy and cheap, so pre-built wall-mounted shelves in the house (with the exception of the things discussed above) are generally not something you should worry about at all.

Sidenote

You can put smaller-scale shelving units on top of bathroom counters as well, to make much more efficient use of that space. (While having some counter space in bathrooms is definitely useful, you don’t generally actually need all that much, unlike the kitchen where you do actually need the space for food prep). I use and like this option off of Amazon.

##### Fans

I’ve always thought ceiling fans were a little pointless. You can’t move them from room to room (when have you ever really needed to run fans in five rooms simultaneously?), and they are actually quite weak (in terms of how much air they move) compared to fans much smaller and cheaper and more power-efficient (and generally quieter too!) than themselves. Anyhow, I wouldn’t view a lack of built-in fans as at all problematic, as you can buy some very powerful portable fans off Amazon for not very much money.

##### Gutters

Gutters keep water off the house (it is good to keep the house as dry as possible as a general principle), and help minimize soil erosion.

##### Blinds on the windows

Blinds can serve two primary functions: they can provide privacy and they can selectively block light.

Someone might ask what the advantage of blinds are over curtains or drapes? It’s a good question. Here’s how things seem to me:

1. Unlike the other options, blinds can let in a varying amount of light rather than being all-or-nothing.
2. Unlike the other options, blinds are quite easy to clean: just wipe down with a damp cloth. No vacuuming or washing necessary.
3. Compared to the other options, blinds are much less prone to issues relating to water and moisture. Cloth solutions can mold. This means blinds are definitely superior in at least the kitchen and bathrooms (although this advantage persists everywhere).
##### Washer and dryer

If a house doesn’t come with a washer and dryer, you will probably want to hook up the lines and buy your own.

##### LED lights

LED lights are better than halogen lights and compact fluorescents in most ways. They are brighter, more energy efficient, and last longer (even though they are a bit more expensive upfront, typically). You can swap LED lights into your fixtures as old lights wear out.

##### A smart thermostat

There are some advantages to having a smart thermostat:

1. The ability to automatically switch from heating to cooling without human intervention, based on temperature sensors. (Never wake up freezing again because you forgot to switch to heating!).
2. The ability to have the HVAC system keep the house within a specific acceptable temperature range (rather than one specific temperature). This can save money in the long-term, as your house can just match the outside temperature until it either gets too hot or too cold for your tastes (rather than having the HVAC run more continuously).
3. The ability to set a different temperature (or preferably temperature range, as above) for daytime and nighttime – and preferably at finer time ranges than just that binary distinction. During winter months, e.g., you might let the house drop into the 60s at night when you are under a bunch of blankets, but keep it around 70 during the day. Aside from being convenient, this can actually save you a lot of money too.
4. The ability to control your house’s temperature remotely. Bonus points if you can schedule the HVAC system to turn on or off at particular times automatically. Bonus bonus points if the UX doesn’t stink.
• If no one is at your house, you can save a lot of money by turning off the HVAC system, and having it automatically turn back on a couple hours before you get back home to make things comfortable again. If one party in a marriage stays home at all times, then this doesn’t really matter so much.

### Step 11: Get pre-approvals from multiple local lenders

At this point in the process, you know your budget and the sort of houses you are interested in. You should thus know about how much you’ll need to get as a loan.

Regardless of whether you buy new or used, you are going to want to have at least one loan pre-approval in-hand before you put offers down on any houses.

You will want to go with a local lender if at all possible. You will be able to get advice from a lender that knows the local market and perhaps has a good working relationship with local builders and real estate agents. But most importantly, there is someone you can go in and talk to (and bother if necessary). You won’t get bounced around phone support for a big institution and end up getting conveniently ignored.

It is my opinion (and that of my real estate agent as well) that you should always get approved by three or more reputable local lenders to compare and contrast their offers. There is no extra credit score hit from hard pulls in applying for pre-approvals if all the credit pulls are within 14 days of each other.

Sidenote

You will want to gather all the information you’ll need for loan applications beforehand, and make sure you note it all down external to your applications so you won’t lose access to it when you submit one. Here’s the stuff I had shared between my applications (this stuff is pretty standard nationwide):

• Where you lived for the last few years (addresses, beginning and end dates, and rent amount, if applicable). You can use a date calculator to help you calculate time ranges, if you have to provide a number of months or something.
• Your employment history for the last few years, and information relating to each employer:
• Start and end dates for each
• Employer name
• Employer phone number
• Your job title at each position
• Information relating to the assets you wish to be taken into consideration in the loan process (you can safely ignore assets in time-locked retirement accounts, e.g.). For me, I needed the names of the financial institutions and account numbers of my two checking accounts, and their balances.
• Information relating to your current gross monthly income (as might show up on a pay stub).

In addition to your social security number (so that the lender can pull your credit, among other uses), you’ll also probably have to provide a scan of your driver’s license, as well as supporting documentation like recent bank statements, recent credit card statements, recent pay stubs, recent W2’s, college transcript(s) and/or diploma(s) (if part of your recent employment history was you being a student), and so on.

Here are some factors by which you might evaluate lenders:

1. The suggestion of your real estate agent. Agents will typically have close working relationships with at least a couple reputable local lenders, and be able to point you to some good options.
2. You will probably want to go with a lender that retains servicing of your loan: they won’t sell it and its servicing to someone else. This factor is pretty important, in my opinion.
3. You will want to go with a lender that offers shorter 15 year loan terms. Shorter-term loans have lower interest rates, and paying back the loan faster also means you get eaten alive by interest much less badly to begin with. I think most lenders of any size and reputability will offer 15 and 30 year loan terms both, but if not, definitely avoid.
4. You will most certainly want to go with a lender that has no prepayment penalties, meaning you can pay off as much of the loan as you want as soon as you want with no costs associated with doing such. This is a biggie. Paying off the loan noticeably faster than your formal term will save you tons of money if you can swing the higher monthly costs.
5. How low the interest rates offered are in a relative sense. In my experience, most reputable lenders will quote you pretty similar rates for equivalent loan terms.
6. Whether or not the lender can offer you a coupon for closing costs (a real coupon) due to having a close relationship to a local builder or somesuch. Credits for closing costs are not always as they seem, as a lender may give you a closing credit and then ratchet up the interest rate to compensate, so you don’t end up paying any less net. With this being said, if you can find a legit coupon/closing credit, this is a pretty massive pro. Unlike the money you sink into your loan proper (which gets you equity in the house), closing costs are like rent: once you pay them, the money is simply gone, with no possibility of building wealth with it. Minimizing closing costs with a lender credit is essentially free money then, and not to be underestimated.
7. Whether or not the lender has particular experience with the type of home and loan you are seeking.

I would not recommend picking a lender formally until you decide which house you want to put an offer down for, since one lender might be better for a particular house (especially if the house in question is new – the builder is likely to have a definite preferred local lender if they themselves are local. This was exactly the situation in my house-buying process: I got a $2,000 coupon for closing costs out of one such established builder/lender relationship). ### Step 12: View real estate listings, look at houses in-person with your agent, and make offers as you see fit. Repeat until an offer of yours gets accepted and you sign a contract. Not too much more to say here. If you buy new you likely won’t have to go through the offer process more than once. If you buy used and the market is hot (and especially if you are not particularly competitive as a buyer due to not having as much cash on hand, etc.), you may have to place many, many offers before something goes through, which can turn into quite an ordeal. ### Step 13: TODO I’ll have more to say once my own experience moves forward more. ## Following the procedure: Steven’s circumstances and decisions In this section, I’ll explain how I followed the procedure I outlined in the last section. You may want to open this section up alongside that one (two separate browser windows, e.g.) to scroll them in parallel and see how things correspond. ### Steven’s circumstances - Step 1: Get your credit in order I got my first credit card when I had income from an internship early on in college, and then my parents and I ran all my college expenses (tuition, room and board, groceries, etc.) through it for multiple years after that. I never missed a credit card payment. I can highly recommend this general procedure, as it meant that I had multiple years of credit history by the time I graduated college. By the time I landed my first real job, I already had excellent credit. I then opened another card to raise my overall credit limit (more accounts and a higher aggregate credit limit are good for one’s credit score). When I was getting pre-approved for loans, my credit in the high 700s meant I always got the most favorable terms and never had to worry about anything. Sidenote Don’t underestimate the pain and frustration that credit-related matters can cause. While I think my particularly bad experience with Equifax is probably outside the norm, plenty of angry complaints on the internet lead me to believe that credit-related woes are far from uncommon. Better to find out that you have issues with your credit long in advance of you needing everything to be in good order… if you think you might want to buy a house sometime even in the somewhat distant future, the time for you to check if your credit is in good order is still right now, today! ### Steven’s circumstances - Step 2: Identify your expected time span Since I decided I am quite content working as a Civilian Software Engineer for the Air Force here in Warner Robins, I am planning to stay here for the long haul. My time span is thus 20+ years – a long, long time in the real estate world. ### Steven’s circumstances - Step 3: Calculate your overall budget Without getting into personal financial details that I probably ought not discuss publicly, in deciding to purchase a house, I knew I was already capable of putting more than 20% down on most 4 bed/2 bath houses in my area, and knew that I could easily swing a higher-payment 15 year mortgage term with my monthly income as a Software Engineer. I can make a 20% downpayment even with a few thousand dollars in reserve as an emergency fund, as is wise. I am planning on continuing to put at least 5% of my salary straight into my 401K, since that’s as much as my employer matches. I may shift even higher than that over time, but probably won’t go much over 10%. ### Steven’s circumstances - Step 4: Identify the local real estate agent you want to use I talked to a bunch of my coworkers who had recently bought houses to see who they used and recommended. I got an especially strong recommendation of a certain agent from a friend who had been looking at houses with a short time fuse since apartment neighbors didn’t like his dog. He had made a lot of offers, and had leaned on his agent a lot due to his circumstances, and only had positive things to say. I went with this agent, who it turns out went to high school with another one of my coworkers. (Small world, huh). This has worked out well for me, and I do strongly recommend getting word-of-mouth recommendations. ### Steven’s circumstances - Step 5: Evaluate the state of your local real estate market In order: 1. At time of writing (beginning of May 2021), the real estate market is pretty inflated across the whole United States. It is pretty bonkers, to be honest. The Covid pandemic has caused supply chain disruptions across the board, and lumber in particular has tripled from its value not that long ago. This drives up the cost of new constructions, which in turn drives up the cost of resales. Further, because of Covid (and perhaps also some of the recent political tension and unrest that has manifested disproportionately in urban centers), people have been leaving areas of very high population density (New York City, California) and heading for the suburbs, creating a squeeze on the suburban housing markets. 2. I work in Warner Robins, GA, USA. This is a city of approximately 75,000 people. It is very much a military town – most people work on the Air Force base, or work for businesses (stores, restaurants, etc.) that support the population that works on base. The local housing market is not too drastically different from the market everywhere else in the country, although the fact that the base is actively expanding its workforce (hiring) combines with the present already-high demand for suburban housing nationwide to create a very, very hot market. According to my agent, local buyers are expected to pay closing costs for both resales and new housing purchases (in less demand-driven markets, usually sellers pay a portion of closing costs). Additionally, most houses get closed on very soon after they go on the market – sometimes even within hours, not days. 3. Due to the base’s projected growth and expansion, housing close to base is projected to appreciate substantially in the coming years. (We’d all be doomed if the base shut down or relocated, however, as it is the primary economic driver of the entire region). All nice housing in Warner Robins should see reasonably substantial year-over-year appreciation if the base continues to grow as it is expected to. This appreciation is pretty certain, which is advantageous for us as buyers, since it feels like not much of a gamble. (Contrast real estate speculation in general). The newer areas of construction in Warner Robins are Kathleen and Bonaire in the southeast, and since these are the largest areas of expansion and present growth, they will probably appreciate the most, although all nice housing surrounding the base will appreciate. New constructions in already-built-out areas (like Byron and Centerville in the northwest – the other nice part of town to live in) should appreciate somewhat similarly to Kathleen and Bonaire, while it is the older housing and less nice environs that will fare the worst. (Perhaps these things will in fact still appreciate, but even if they do, it will not be by as much as nicer options). 4. Used houses are not really better or worse than new houses in the local market; both are priced much higher than where they were a few years ago, and the increases have been roughly proportional for both. However, there are some used listings on the market that are a complete rip-off (as in$160+ per square foot, which exceeds the average price per square foot of new constructions). These should be avoided.
5. The general state of new local houses depends substantially on the builder. Some larger builders can order materials all in advance and have a much more certain construction schedule, while others end up getting dunked on by Covid supply chain issues more. WCH Homes is one of the larger and better-regarded local builders, and they are maintaining their build schedules even through Covid. New houses, as always, are more expensive than used houses, but even though both are high right now, not all new constructions are priced outlandishly. Most of WCH Homes’ constructions are presently priced around $130 per square foot, which is definitely a fair bit above prices a few years ago, but not anything remarkable in the present market. In fact, that is actually cheaper than some (overpriced) resale houses on the present market. As always, then, it is about doing your research to make sure you don’t overpay, whether you buy new or used. ### Steven’s circumstances - Step 6: Decide which residential areas in your geographic location are acceptable to you (it can be just one, or a set) In Warner Robins, while Kathleen and Bonaire look nice on paper due to the expansion factors discussed above, I very quickly decided that the area around Byron and Centerville made a lot more sense given my criteria and preferences. Here’s why, in order of the factors listed in the procedure above: #### Commute character Living in Byron/Centerville leads to a noticeably better commute character (even though I think commute times to the north part of base are similar to Kathleen/Bonaire, at ~18 minutes by car): 1. There are a lot less people living in Byron overall (compared to the Kathleen/Bonaire area, at any rate), meaning less overall traffic on a commute from this direction. 2. There is prettier scenery on the commute: trees, fields, orchards, and so on. It’s honestly a bit surreal: you can be next to urban shopping centers one minute, and agricultural fields the next. It’s one of the things I really like about this area, the ease with which one can access what “feels like” country proper (despite still being close to everything). 3. Commute paths along these country-ish roads are mostly free from stops (stop lights, stop signs, and so on). ##### Biking to work Based on the housing community that I selected, here are several commute routes that would work (with the first one probably being the most ideal, as it makes use of Dunbar Road – a low-traffic country road – for most of the distance). The destination on these maps gets me near the Green Street gate, one of the less-trafficked gates for Robins AFB. The rest of my commute is on smaller low-traffic roads on base. In terms of the bike commuting criteria outlined in the procedures section above: 1. My door-to-door commute is roughly between 11 and 12 miles using these routes. This means that if I buy a speed pedelec (an electric bike capable of sustained 28 MPH speeds when pedaling) I can get my bicycle commute down in that 20 to 30 minute range that I believe to be ideal. While high-powered speed pedelecs will work fine for me, given the distances involved here, I personally can’t get away with lower-powered electric bikes or strictly pedal-powered road bikes without facing unpleasant opportunity cost (mostly in terms of longer commute times than I want). 2. All three routes above make use of lower-traffic roads. Watson Boulevard, Carl Vinson Parkway, Green Street, and several other more-heavily-trafficked larger two-lane roads are avoided (excepting perhaps a very short stretch on a sidewalk alongside one of these to get to a connecting road, and the necessary brief stint on Green Street to get through the gate onto base). Dunbar Road probably has less traffic than Elberta Road overall, and is the commute path I am planning to use most. The residential road route has more stops due to stop signs in neighborhoods. 3. The Dunbar Road route has like four real intersections along the entire ~11 mile path from my house to the gate onto base. This commute path was one of the primary factors driving me to Byron, as it is almost ideal in terms of bicycle commuting. No other options I considered had anything that came close to this countryside commute with a near-complete lack of intersections. #### Proximity to practical locations In order: 1. I work out in the base’s well-equipped gyms, so gym proximity to my house isn’t important, as I have gyms very close to my place of work. (I’m literally a minute and a half away from a gym in my current building). 2. Places under consideration in Byron and Centerville are around 5 minutes from a Publix, Kroger, and CVS Pharmacy, and just a little more to get to a Home Depot and a Lowes (home improvement stores). This is because in Byron and Centerville you are very close to the west part of Watson Boulevard, one of the main industrial thoroughfares in Warner Robins. Kathleen and Bonaire are less favorable store-wise (and restaurant-wise too, for that matter), as they are more strictly residential areas. 3. See (2). 4. See (2). 5. There are lots of Churches all over Warner Robins, such that this consideration is not perhaps as important as it might be. (Well, if you are highly opposed to Baptist theology, you’ll probably want to look at church locations a bit more, since Baptist churches dominate down here in South Georgia). In terms of my personal circumstances, most of my Christian fellowship is over the internet (and actually some of my closest Christian friends are from other countries), so this is not an important variable for me. 6. I don’t shop at Walmart, Target, and other large general-purpose stores like these since I mostly shop for stuff I’d get at these on Amazon. Nonetheless, Byron is close to stores along these lines. 7. I don’t shop at malls. Again, Amazon is what I use. (Even for clothes – since I have a somewhat uncommon body shape in that I am 6’5” but slim, I get a much better selection online). Nonetheless, Byron is near the closest thing Warner Robins has a to a mall proper, and it is also closer (relatively speaking) to Macon, where there is a larger shopping district. #### Proximity to larger urban centers Macon is the largest urban center close to Warner Robins, and it is to the north of Warner Robins. Atlanta is the other important urban center of interest in Georgia, and it is also north of Warner Robins. You are quite a bit closer to Macon and Atlanta in the Byron area than in Kathleen and Bonaire. Not only are you further north to begin with, since Byron is on the west side of Warner Robins, it is much closer to I-75, putting you on a much faster moving road much earlier in your trip, relatively speaking. Together, these things mean that you probably save ~15 minutes one-way (~30 minutes round-trip) on trips to these urban centers by living on the northwest side of the city rather than in Kathleen or Bonaire in the southeast. #### Proximity to parks and/or nature trails The Thomson Trail is the closest single track-trail to Warner Robins (and by a significant margin, I might add). It is about 10 minutes away from Byron, but 25+ minutes away from Kathleen and Bonaire. This is a pretty big deal for me – I love hiking (especially when talking to others, either in person or on the phone), and will spend a considerable amount of time here. Being much closer to it is a pretty huge advantage. The next closest primary single track locations (the Pig Trail, Arrowhead Park) are both in Macon, between 20 and 25 minutes away from Byron. They are 40+ minutes away from Kathleen and Bonaire though. Don’t forget that the time difference here must be counted both going and returning; you probably save over a half hour round trip by living on the northwest side of the city rather than Kathleen or Bonaire in the southeast. #### Overall safety Living in nice neighborhoods in Byron and Centerville is not much different from living in nice neighborhoods in Kathleen and Bonaire. You want to avoid the part of Warner Robins north of Russell Parkway and east of Lake Joy Road, as that is where things are sketchier, as a rule of thumb (although within this area, things can vary wildly based on neighborhood, as you might expect – you are just more likely to have issues). #### School zoning Here we come to the one area where Kathleen and Bonaire are definitely better than Byron and Centerville. Kathleen and Bonaire are zoned for very good schools from elementary through high school – they are the suburbs in the best school district in Warner Robins. Depending on where you live in Byron and Centerville, you may be zoned for a good elementary school and middle school and less desirable (if acceptable) high school, or you may be zoned for weaker schools all the way round. I’ll explain what I mean by this in a second. At time of writing, Warner Robins proper has four high schools: Veteran’s High School, Houston County High School (aka HoCo), Warner Robins High School, and Northside High School. Veteran’s and HoCo are both quite good, but since the former is newer, it is arguably more attractive. Warner Robins High School is in the middle of the group – it is definitely less attractive overall than the leading two. Northside is the worst of these four – but still not all that terrible as far as schools go. While Centerville is all basically in Houston County, depending on where you live in Byron, you may end up in Peach County, Bibb County, or Houston County. (Relatively speaking, only a very small part of Byron is in Houston County). Up in the northwest, if you are in Houston County (and thus zoned for Houston County schools), you end up zoned for Eagle Springs Elementary, Thomson Middle, and Northside High. In this situation, at least at time of writing, Eagle Springs Elementary and Thomson Middle are both reasonably good, so the major loss (vs. living in Kathleen or Bonaire) is being zoned for Northside rather than Veteran’s or HoCo. Keep in mind that many people do not stay in the same house for decades, so do not necessarily need good schools K-12 for their plans. Being zoned for a good elementary school and middle school therefore will lead to higher demand for your house than if you had no good schools in your district. From a house resale perspective then, the above situation for the northwest part of Houston County is less than ideal, but also not particularly bad on balance. Peach County and Bibb County are zoned for worse schools overall. Since it is possible to live on the northwest side of Warner Robins while still being in Houston County (with better schools), in my opinion, that is definitely the path to take. #### Steven’s conclusions vis-à-vis Warner Robins housing areas In my reading of the residential areas in Warner Robins, based on the analysis above, living in Kathleen or Bonaire would be the obvious choice if you want to send your kids through public schools (especially if you have kids at or approaching high school age), and Byron or Centerville would be the better choice otherwise. For me personally, the superior (bike) commute on pretty country roads, closer proximity to stores and restaurants and everything else really, closer proximity to Macon and Atlanta and the I-75 on-ramp, and much closer proximity to single-track trails were the deciding factors in favor of me living in the Byron/Centerville area. I am also less-than-enthused about the state of public education in our country at present (even in the best school districts), and am therefore more indifferent about public school zoning, since if I ever do have kids, I would be much more likely to find some alternative to public schools. (Dual-enrolling at a local community college is highly attractive relative to normal high school, for example). ### Steven’s circumstances - Step 7: Decide how much land you want your house to be on Since I do not have any particular reason why I would need a larger amount of land, and there is opportunity cost in owning more land, it seemed best to me to not get any more land than a normal-sized suburban yard. ### Steven’s circumstances - Step 8: Decide whether you want to focus on looking at new houses or used houses My conclusion from above was the following: My reading of the situation is this: if you have the capital to put more than 20% down initially (to avoid having to pay private mortgage insurance and such), if you have the income to support a shorter-term mortgage with lower interest rates and at least some degree of prepayment, if you live in a place with a housing market that is almost certain to appreciate (making a higher-value asset relatively superior), and if you plan to stay in the house for 15-20+ years, buying new is actually the most logical choice. If any of these things aren’t true (particularly the last two), you’ll need to think about it more. If none of them are true, you probably shouldn’t buy new. For me specifically: 1. For the houses I am looking at, I can put more than 20% down upfront. 2. I have enough income to not only support a 15 year term, but also prepay to a rather high degree, if I so choose. 3. Due to the base expanding (as discussed above), the value of “nice” housing around the base in Warner Robins is projected to appreciate. This appreciation has a high probability of occurring, especially relative to other sorts of real estate speculation. 4. I am planning to stay in the house I purchase now for 15-20+ years. For these reasons (alongside all the other pros of buying new, as listed in the procedure write-up itself), and because the market is so crazy right now (making buying resale houses even more stressful than it already is normally – because there is such fierce competition and bidding wars), I decided to buy new. ### Steven’s circumstances - Step 9: Decide on the number of bedrooms and bathrooms you want Given my situation at the time of initial purchase (myself and one roommate), since I very much want to have a guest bedroom, I knew that I needed at least 3 bedrooms. Since I don’t mind making the master bathroom “publicly accessible” (i.e., open to use by anyone present in the house rather than staying closed-off), my preference would be for just 2 bathrooms (less cleaning that way), with one of them being the master bathroom. I certainly would not want more than 3 bathrooms. The big question then is whether I want to get a 4-bedroom house, or stick with just 3 bedrooms. I argued in the procedure section above that the decision-making here closely mirrors the decision between new and used, as it seems to me. For reference again, my situation: 1. For the houses I am looking at, I can put more than 20% down upfront. 2. I have enough income to not only support a 15 year term, but also prepay to a rather high degree, if I so choose. 3. Due to the base expanding (as discussed above), the value of “nice” housing around the base in Warner Robins is projected to appreciate. This appreciation has a high probability of occurring, especially relative to other sorts of real estate speculation. 4. I am planning to stay in the house I purchase now for 15-20+ years. Taken with the above, since I am reasonably confident that I can find a second paying roommate if I want to, a 4-bedroom house is undoubtedly better if I ever end up getting married and having a family, and 4-bedroom houses have higher demand and better resale, it seems pretty clear to me that a 4-bedroom house is the right choice given my circumstances. Further, it would be nice if the house I buy only has one shared room (a living room), as I have no need for another room for some specific purpose (like putting a piano or a pool table in it), and can therefore get away with a house with lower square footage (and therefore lower cost). ### Steven’s circumstances - Step 10: Take a cursory look at the features of homes in your striking range, given all that you have now decided on. Then compile a list of what is important to you. At this point, here are the decisions I have made: • I have decided I want to buy a house in the Byron or Centerville area, in Houston County. • I have decided that I want a normal-sized yard rather than more land. • I have decided to focus on new houses. • I would probably prefer to target houses with 4 bedrooms and 2 bathrooms (one of them being the master bathroom). Now, Byron and Centerville are already a bit more built-out than Kathleen and Bonaire, such that there is not a great abundance of new construction in the area. In fact, as far as I am aware, at the time that I was actively searching for houses, there was a single new development in the part of Byron that is in Houston County – Georgian Walk. If I wanted a new house in the Houston county part of Byron, I would have to buy it in this development. There were very few options in Centerville too. Fortunately, I ended up quite liking this single Byron option in all of the variables to come as well. I don’t know what I would have done if I hadn’t! All of the analysis below is based on the house I chose in Georgian Walk – a 4 bed 2 bath open floor plan with 1,761 square feet. #### Very important things ##### Roof The new roof on this house will be rated for 30 years. We don’t get super nasty windstorms in Warner Robins. ##### Earthquake-resistant construction We don’t have earthquakes in Warner Robins (unlike, say, San Francisco, or other cities near faults). ##### HVAC The new HVAC system is from American Standard, presumably one of the middling options in their offerings. This is one of the more reputable established HVAC brands, as far as my cursory research shows. Georgia has hot summers (the highest-stress part of the year for HVAC systems here), but usually we are talking high 80s or low 90s, not anything above 100 (as in the desert, e.g.). ##### Insulation Houses built more recently (last several decades) tend to have better insulation; it is really old houses that typically get eaten alive on this one. It will not be a problem for this house, in other words. ##### Plumbing I don’t know specifics on this one, but again, new construction practices are generally going to be OK in this regard, as it is the really old stuff that you need to check more into. ##### Hazards peculiar to older constructions Not applicable – this is a new house. ##### Mold and water damage Not applicable – this is a new house. ##### Wood-eating pests The house/yard will have a termite treatment. ##### Infestations Not applicable – this is a new house. ##### HOA covenants and deed restrictions Georgian Walk has an HOA,$250 per year. The covenants are pretty standard HOA stuff: consistent exterior appearance (externally-visible additions must get approved), no unsightly things in your driveway or on your front yard such that they are visible from the street, yards must be well-maintained, etc. Nothing objectionable.

There are also strict building guidelines in the covenants to mandate a very consistent level of quality of houses in the neighborhood. In practice, as far as I know, the entire community is being built by WCH Homes, a local construction company. This means property values will be high everywhere in the neighborhood.

This is the sort of HOA that I think is beneficial rather than detrimental. It does its thing to enforce practices conducive to high property values, and little else.

##### The age of the house itself

Not applicable – this is a new house.

#### Important things

##### Available internet and cable options

There are multiple options for internet through different local providers. I can easily get the ~150 Mbps speeds that I want, and I think I could get a lot more too if I wasn’t cheap and was willing to pay for it.

##### Natural gas and electricity, or just electricity?

The house uses just electricity (the stove is electric, etc.). There isn’t a lot of natural gas around here, apparently.

##### Water heater

The house comes with a tank water heater of reasonable size, definitely large enough for my planned usage. Also, since there’s only two showers in the house, you’d have to try pretty hard to outpace the water heater. As I opined, I do not think a tankless water heater is ever really worth it.

##### Appliances and kitchen features

The house has all the normal modern kitchen features:

1. Oven
2. Electric stove (not induction)
3. Built-in microwave (advantageous because it does not take up counter space)
4. Large stainless fridge/freezer.
5. Dishwasher
6. Sink garbage disposal
##### Kitchen counter space

There is a floating counter (where the sink is) that is open on all sides, as well as counters next to the kitchen wall (where the stove is). Lots of counter space.

Importantly, the walkway in the kitchen is actually wide. Oh how it annoys me when designers don’t get this right. Fortunately, here there is enough room for people to pass each other comfortably when working in the kitchen. Moreover, since the center counter is floating in the floorspace, it is accessible from all sides, which should help a lot in avoiding the “cramped kitchen” feeling.

##### Kitchen cabinet and drawer space

There are about as many cabinets and drawers as is normal in kitchens, exactly where you’d expect them.

##### Kitchen pantry

There is a large walk-in pantry. I’m greatly looking forward to having all this easily-accessible space to keep things more organized than they’ve been in my small apartment kitchen.

##### Bathroom counter space

The master bathroom has a good amount of counter space, but unfortunately the other bathroom in the house is pretty small, with not much more than a single sink basin with attached vanity. This is not ideal, and is one of the only beefs I have with the house. It would be nice if there were a bit more bathroom counter space there.

##### Bathroom cabinet and drawer space

There’s plenty of storage space in the master bathroom, but again the space is a bit limited in the other bathroom. I’m thankful that at least there is some space (rather than having a floating sink with no attached storage space whatsoever), it is just that things are a bit more cramped than they could perhaps be.

##### Bathroom storage closet

The non-master bathroom has a storage closet that can be used for medical supplies, cleaning supplies, shampoo, and other things like these. This does in part help make up for the smaller amounts of counter and cabinet/drawer space avaialable in this bathroom.

##### Mirrors

There are sufficiently large mirrors in the bathrooms.

##### Linen closet

There is an additional storage closet in the house that can be used for storing clean towels, sheets, and so forth. It is not attached to the laundry room, but more centrally located. (Not a bad thing).

##### Laundry room shelving

The house does come with built-in shelving above the area for a washer and dryer.

##### Flooring type and distribution

The house has vinyl plank flooring in the kitchen, dining area, living room, and hallways. There is ceramic tile in the bathrooms and the laundry room. There is carpet in the bedrooms. The house thus has the sorts of flooring I favor for each type of room.

##### Windows

The only room in the house that doesn’t have a window is the non-master bathroom, which is fine (bathrooms don’t have to have windows, in my opinion, unlike other rooms… unless you spend lots of time in your bathrooms?).

##### Housing location in the housing community

There are multiple entry/exit points in Georgian Walk. I happen to be near an exit point that borders another residential housing community and an elementary school. I am not near any overly fast moving roads, which is really the important bit. I wish there were a few more trees in my backyard (I may plant some eventually), but the view is not bad. I am not near anything else unfavorable – although there may be some morning traffic that feeds into the close elementary school. I don’t think this is particularly disadvantageous, but there you have it.

##### Relative house value compared to other houses in the community.

I am in the cheapest floorplan out of all the ones in the community, which is the most ideal situation to be in.

##### The age of other houses in the community.

Construction in Georgian Walk started around 2009 I think, and there is still a fair bit of planned construction even after my house (which is projected to finish in November 2021). Again, this is the most ideal situation to be in, as it means my property value is likely to appreciate as even more new houses get built in the neighborhood. There are no very old houses in the neighborhood; they are all part of this same development cycle.

##### Garage

There is a two car garage. I am planning to try and fit the following things into the garage with one car pulled in, and I think it will be easily possible:

• Trash
• Recycling
• Electric bike, charger, pump
• Lawn mower, rake, and other yard work essentials
##### Yard

I neither want nor need a huge yard, and I don’t need a fenced-in back yard either. The moderately-sized non-fenced-in yard (a ~0.35 acre lot total) that my house will be built on is a good middling option. Think goldilocks.

##### Hoses

There are hose connections in both the front yard and the backyard.

##### Bedroom sizes

All of the bedrooms are greater than 11’ by 11’. The master bedroom is larger, as is normal.

##### Avoidance of low added-value shared spaces

The house just has a large living room, and that is it. Since I do not personally have anything that would demand another room (like a full-size piano, perhaps), this is the ideal situation for me.

##### Internal separation

The house has a very open floor plan. There is no dividing wall between the kitchen and the living room. This is the ideal, in my opinion, as long as you are willing to use noise-cancelling headphones when necessary.

#### Things of less import

##### Ethernet in all the rooms

I am paying a bit extra as an upgrade to put ethernet ports in all the rooms (they will all end up wired to a closet somewhere, which is where I will have my modem and router).

##### Separate landscaping water meter

There is no separate water meter for landscaping water, and since I am on city water (will not have a separate well source for landscaping water, e.g.), I will get hit with sewer charges any time I water my lawn. This is disadvantageous, and one of the only things less than ideal about this house.

For this reason, I am going to be more uptight than I would otherwise be about using water on my yard. I will only water it at night, for example, to help prevent evaporation and waste.

##### Large vaulted ceilings

There are no true vaulted ceilings in the house, but there are raised tray ceilings in the master bedroom and living room. I suppose they make the house feel a bit more open, but I don’t really care much one way or the other, and don’t think there is much functional difference in any case.

#### Design selections: colors and patterns

I followed my own advice here and went with pretty neutral, understated design choices.

I knew I wanted light blue walls in my house (even though this is slightly uncommon), but I went with a more grayish blue than a full-on blueish blue, if that makes sense. It is blue, to be sure, but not particularly overpowering.

Some people like warm colors (think tans and warm browns and burgundy), but I am myself more partial to whites, grays, and blues. I’ll post pictures eventually.

In a stroke of luck, I was able to get all the value-added options that I find useful (as listed in the procedures section) while being able to avoid those that I find suboptimal (namely, a harder-to-clean tile shower and hardwood floors).

This is one of the big benefits of buying a house new – everything you want, nothing you don’t.

Here is the full list of potential upgrades that were offered to me:

And here is the list of upgrades I went with and what I actually payed for them (which ended up a bit less than listed – huzzah):

• $650 - Shower door in master bathroom •$350 - Tile around tub in master bathroom
• $550 - Towel bars, rings, etc. •$650 - Blinds on all the windows
• $45 x 3 =$135 - Additional Cat5 = Ethernet Lines (in all 3 non-master bedrooms, on top of the default of already having lines in the living room and master bedroom)
• $1550 - Gutters •$1650 - Screened-in back porch

It might have been hypothetically possible to get similar features cheaper doing it myself or hiring the work out to a different contractor than the builder. From the initial research I did, however, taking into account costs for materials and labor, nothing here is terribly outlandish.

### Steven’s circumstances - Step 11: Get pre-approvals from multiple local lenders

I ended up going with New American Funding as my lender, through the NAF agent local to me. However, I was pre-approved by two other lenders as well, such that I had three pre-approvals in hand before I made any offers.

In terms of the factors I outlined:

1. My real estate gave me three local lenders to look at. Doing my own research, these were all good options according to the internet (a couple were national with local agents). I ended up getting pre-approved by two of these lenders my agent recommended to me, as well as by a local credit union (to use as a point of reference).
2. The lender I went with retains servicing of their loans.
3. All the lenders I got pre-approved with offer 15 year mortgages.
4. All the lenders I got pre-approved with have no prepayment penalties. In my personal opinion, this factor is very, very important. (Although, to be fair, this is because I am planning to pre-pay quite a bit).
5. In my case, I was quoted 2.625% @ 15 years by all three of the lenders I got pre-approved with (at the time of my pre-approval), so different interest rates across lenders actually didn’t factor into my decision at all. Sometimes the rates may actually be a bit different, however.

###### Aggregate answer from discussions with others (my words)

There are some used houses selling for more than that right now. We wouldn’t probably recommend one of those. Houses are definitely more expensive now that they have been in the past (the market is high right now), but there is no certain guarantee of when things might self-correct a bit, or even if they will at all. The base is still expanding, after all.

This doesn’t seem that out of line with current local prices, and certainly doesn’t sound like a huge rip-off.

#### Questions from Steven’s looking-at-houses phase: seller (listing agent)

Since I so rapidly honed in on a specific house, I really only ended up interacting with a single listing agent. Many of my initial questions were sent to this listing agent through my own agent, but I also talked to them in person when looking at the model house that the builder had. (I personally don’t quite understand the need for the indirectness of me emailing my agent questions who then forwards them on to the listing agent, but then again I’ve been told I basically have a malfunctioning shyness circuit, so…).

##### 1. Locking in the house price upfront
###### Steven’s question

The listing for the house right now is ~$234k. If I put an offer down right now for this amount, am I guaranteed this price? I know the prices of building materials fluctuate, e.g. – what happens if materials costs go up by a lot? Will the cost then go up$30k over what we initially agreed on? What are the clauses in the contract?

Sidenote

This question might seem somewhat strange for me to ask so bluntly, but Covid has caused quite the supply chain issues. From conversations with coworkers, I knew coming into my own house buying process that lumber costs had tripled over the last few months, and seriously messed with some construction projects that suddenly had to confront much more expensive materials costs. Builders can’t just magically snap their fingers and make the numbers work if they have to buy suddenly-expensive lumber on the lower materials budget decided on months before (at least not if they want to actually remain in business for any length of time). So how does this work? I was legitimately very curious from a business and economics perspective.

###### Aggregate answer from discussions with others (my words)

The price is locked in after the contract is signed, and it does not change after that. Apparently, this is not just my specific builder, but most all legit companies; it is the normal practice.

Some builders have had to more or less eat the increases in materials costs if prices go up during a contract. The price volatility tends to hurt smaller builders and more custom builders worse. If you build a more standard house (or set of houses), and have enough assets to buy all the construction materials upfront for all your constructions, then you have an easier time setting prices that reflect what you as the builder actually pay for construction materials. You can still occasionally get burned even so.

If all this sounds terrible for business, on the plus side for builders, housing demand in areas of lesser population density (particularly suburbs) has been pretty bonkers due to Covid (and also perhaps some of the recent unrest in urban areas), and houses are selling like hotcakes. This is inherently a time of good business and high margins for builders, in other words, which may help make this otherwise bitter pill easier to swallow.

##### 2. On potential schedule-slip
###### Steven’s question

The end date projected for the house is November 1. How firm a date is that? Some amount of delay seems to be almost inevitable (I have a coworker having a house built right now, and that’s all I’ve heard from him), but what are the contract-bound limits on delay? How am I compensated if the house build is 4 months late?

###### Aggregate answer from discussions with others (my words)

Once again, this depends on the size and procedures of specific builders. Larger builders building mostly stock houses (with fewer custom materials) can buy most or all construction materials upfront, reducing schedule risk.

Wise builders also schedule in some wiggle room to account for potential bad weather and the like.

According to the listing agent and my own agent both, the builder of this house under consideration (WCH Homes) has a solid track record of sticking to their build schedules, even despite the Covid supply chain issues. Evidently this consistency comes from buying materials upfront and scheduling in a full month or so of wiggle room to account for weather and other unforeseen circumstances.

There is not really compensation for delayed construction, as a typical rule.

##### 3. On what HOA fees go towards

Given that an HOA exists, covenants are written, and there is a $250/year fee, are there any shared areas that this money goes towards (e.g., a clubhouse, tennis courts, a shared pool, etc.)? Are there future plans for such? ###### Aggregate answer from discussions with others (my words) Right now the fees just go towards maintenance of common areas (grass around the community entrance, etc.). ##### 4. On HOA covenants and paying roommates ###### Steven’s question Right now I have a roommate, and I might think about getting another one if I end up with a 4-bedroom house. I saw that the HOA covenants had restrictions related to renting proper (i.e., I own the house and straight-up lease it to someone else), but what about having people pay me, the owner of the house,$500-$600 a month of rent, while I am still living there too? Are paying roommates kosher according to HOA regulations? ###### Aggregate answer from discussions with others (my words) Most of the wording related to renting in the HOA covenants is targeted at explicitly banning Airbnb (and the like). Why they don’t just come right out and say “No Airbnb allowed. The end.” is a bit mysterious, but there you go. Paying roommates should be absolutely fine. ##### 5. On the type of luxury vinyl plank (LVP) flooring used in the house ###### Steven’s question Is the LVP flooring used the type of vinyl-plank that is fully waterproof and wear resistant (contrast hardwood)? ###### Aggregate answer from discussions with others (my words) There are different types of vinyl-plank flooring, but honestly all of them beat out hardwood handily. [Steven: see here, e.g. – vinyl is generally more water and scratch resistant across the board, even the shoddy options. Unfortunately, LVP floors won’t add value to your house in the same way as (greatly functionally inferior) hardwood floors would. As an engineer this fact puzzles me greatly, but then again people pay thousands of dollars for mechanical watches that are much worse at keeping time than cheapo$10 quartz watches, so I guess there are stranger yet ways to flaunt status].

In terms of waterproof floors, you shouldn’t actually worry about this overly for general spills. Why wouldn’t you clean up spills when they happen (even if it’s just water)? All you need is something impermeable enough to water that it doesn’t warp the second it gets wet.

#### Questions from Steven’s looking-at-houses phase: my real estate agent

I asked my poor real estate agent all sorts of questions throughout the process – far more than really recorded here. I apologize to all real estate agents out there in advance but… I recommend all other buyers do the same!

Your agent is your ally in this battle, and they are probably the person other than yourself most interested in ensuring that things turn out how you want them to. You should rely on them.

##### 1. What is the difference between a commitment contract and closing paperwork?
###### Steven’s question

Now that I’ve been sent this contract document, well… what is it?

What exactly does this contract represent, and how is it different from the paperwork that will be involved during closing proper in November? It represents my commitment to purchase this construction and their commitment to sell it to me, correct?

###### Aggregate answer from discussions with others (my words)

It essentially represents the intent to buy and sell, yes. It also contains tentative agreements concerning the lender to be used and closing attorneys to be used.

##### 2. Questions about a real estate agent’s relationship to me as a buyer
###### Steven’s question

Yesterday I signed a document that declared that you [my agent] are acting as a customer of me, the buyer, not a client. I believe I understand the difference, but I’d like to go over it a bit just to make sure.

• In your present capacity acting as a “customer,” you guide me through the process in terms of helping me organize paperwork and such and get all my ducks in a row.
• If you were acting in a “client” capacity, you would more formally be giving me advice.

Is this correct?

###### Aggregate answer from discussions with others (my words)

Yeah, all this is basically correct. The lines between “client” and “customer” are important mostly only in legal terms, and in practice, things are usually kind of fuzzy. What counts as “advice”? I don’t know precisely, and would challenge anyone to give me a common-sense definition without slipping into legalese.

At any rate, it doesn’t seem like it matters in practice. The fees are evidently the same either way, so it is just a legal thing.

##### 3. Delegated authority, brokers, and agents
###### Steven’s question

The document I signed agreeing to work with you discussed brokers and agents and delegated authority and stuff. How does all this work?

My parents: “We have never worked with a broker before. We have always had a real estate agent. I don’t know how this works. Ask your agent to explain this to you.”

Is it something like the following:

• You work as a real estate agent for a real estate company that has a licensed broker who is like the legal representative/authority for contracts that go through the company?
• Basically, even though my parents always went through real estate agents, those agents received delegated authority from a licensed broker (presumably the one running the company employing them), exactly like yourself now? Is this correct? My situation is not different than theirs were?
###### Aggregate answer from discussions with others (my words)

You’ve got this essentially right. There aren’t actually all that many full real estate brokers out there – many real estate professionals are just agents.

##### 4. Costs associated with buying and selling houses
###### Steven’s question

Can we talk about brokerage/agent fees? I didn’t see any mention of those in this document, so I’m assuming they will be paid entirely at closing. What can I expect? According to my parents, in a normal transaction the seller pays 6% of the sale cost as fees, half to the listing agent, and half to the buyer’s agent. However, I am buying a new house, so what happens given this?

##### 5. On the specific law firm for closing that showed up on the initial contract
###### Steven’s question

Are these lawyers [listed on the commitment contract] good? Is it a problem to let the seller (builder, in this case) pick closing lawyers – as in conflicts of interest and stuff?

###### Aggregate answer from discussions with others (my words)

These are the lawyers this builder preferentially closes with. While you might think that would tend to make them try to get terms favorable to the builder (I scratch your back if you scratch mine, classic bribery style), my agent thought that being paranoid along these lines is pretty silly. Any companies that did kickbacks and so on like this would have these things come back to bite them, and rapidly at that. Given this particular builder’s large size and rather sterling reputation, under-the-table stuff like this is pretty irrational to worry about.

In fact, the reason why the contract includes the law firm to be used is mostly to protect the builder from having a buyer use some shady fly-by-night sort of law firm. It’s similar to the reason why the contract specifies that any home inspector used must have legit credentials. It’s to protect themselves.

All this said, my agent has worked with this law firm in closing a good bit, and said there’s nothing to worry about here.

##### 6. On the blank line for earnest money that showed up on the commitment contract
###### Steven’s question

I already paid a construction deposit. That’s why this line on the contract is blank, right?

###### Aggregate answer from discussions with others (my words)

Yes, that’s correct. The construction deposit is essentially paid in lieu of earnest money, and functionally replaces it.

##### 7. On home inspectors and home inspection
###### Steven’s question

Can you recommend a good home inspector? We still inspect the house as part of closing even though it is new, right?

###### Aggregate answer from discussions with others (my words)

In my agent’s experience, since buyers do a walkthrough with the builder’s construction supervisor a couple weeks before closing (so that there are no unpleasant surprises right at the end = minimizing schedule risk for the builder), most of his clients have not paid to get the new homes inspected, instead working with the builder directly to meet expectations. By way of contrast, he always advises clients buying resale houses to get them inspected.

This said, there’s nothing wrong with getting the new home inspected. If we decide I want that, he can send me a list of good inspectors to use. I don’t have to make a decision now, but can decide once we get closer to closing.

##### 8. On stuff relating to the loan on the initial contract
###### Steven’s question

There is a page after the contract itself called the “Loan Contingency Agreement.” On this page, there is an interest rate box. Right now, the contract lists 3% there.

All my pre-approval offers were 2.625% @ 15 years. Why are we putting 3% on the contract? This is in no way binding, right? What is the point of it?

I have already been pre-approved with the so-called “Approved Mortgage Lender” listed on this page, making much of the legalese related to “If buyer gets turned down by lender…” not particularly relevant for me, correct?

###### Aggregate answer from discussions with others (my words)

My real estate agent and lender both think this page in the contract is really dumb. Nothing on the page is binding (loan term, interest rate, etc.), so it mostly just causes confusion if anything is different in 6 months when the house finishes getting constructed, at the point of closing.

The lender said that if a lower interest rate is listed on the contract, then people will want to know why they have to pay a higher rate since “they got the lower rate in writing” or whatever. This thing is not in any way binding and can’t be relied on for much of anything, which to me begs the question of why it even exists.

The lender you put here is the one you are tentatively committing to working with, although the contract can be amended.

Getting pre-approved is not the same as having an actual loan fully underwritten and ready to go. This latter process is what starts once the signed contract gets sent off to the lender, and is why the legalese is there.

##### 9. On appraisals
###### Steven’s question

On appraisals generally, the lender checks out the value of the house to make sure it is not guaranteeing a loan on something worth less than what they are lending for it, right? Do all home purchases (even new home purchases) go through appraisals? Will mine?

The Loan Contingency Agreement also has a bunch of legalese regarding ‘appraisal contingency’. It seems to be stuff about renegotiating the house’s price (or walking away) based on a low appraisal value. Is that basically right?

###### Aggregate answer from discussions with others (my words)

Correct – the appraisal is something the lender does. It will happen even on the new house, but it is quite unlikely to appraise out lower, so I shouldn’t hold my breath and expect to pay any less than what is on the contract.

As to appraisal contingency, all that stuff is about the procedure for renegotiating or backing out if the appraisal comes back low, yes.

#### Questions from Steven’s looking-at-houses phase: lenders

For all the lenders I was getting pre-approved with, I verified that they had 15 year loan terms, that I would be able to prepay the loan as much as I wanted, and that they retained servicing of the loan. Nonetheless, I still did have a couple questions about specifics:

##### 1. On interest rates and the construction process for a new house
###### Steven’s question

In listing your name as my lender on the commitment contract, I am just now starting the underwriting process, correct? Let’s say I get approved (not just pre-approved, but fully underwritten) within the next week or so. That still puts us approximately six months out from closing.

Will I be guaranteed the interest rate from now? What happens if interest rates go up between now and closing?

###### Aggregate answer from discussions with others (my words)

If you get successfully underwritten now but interest rates change, it will be the later future interest rate that is used at closing (and carried forward in your actual loan). Typically the process is that we contact you about 60 days before the scheduled closing date (a little less than that normally, actually, to give some wiggle room in case closing gets delayed a bit) to pull your credit again and get all of your updated financial information. It is the interest rate from this time – approximately 60 days before closing – that will get locked in.

##### 2. On potentially locking in an interest rate earlier
###### Steven’s question

Say I wanted to lock in an interest rate before then. What are the pros and cons of doing so?

###### Aggregate answer from discussions with others (my words)

Well you certainly can choose to lock in a rate a few months out, but the cons are quite steep. The further out you lock it in, the more you will end up paying.

In my lender’s professional experience, she said she has only done this like once, when a client was very adamant about it even despite her advice to the contrary. She said it is basically never worth it. You will lose money doing so, in general, even if interest rates go up in the interim. They’d have to go up an awful lot for you to break even.

Especially since the Fed has been keeping interest rates so low for so long, it just makes zero sense right now.

##### 3. On what drives changes and fluctuations in interest rates
###### Steven’s question

I see that now that I’ve been underwritten, the interest rate number now showing up for my 15 year term is 2.500% rather than the 2.625% that was on my pre-approval.

For a \$180k loan, 0.125% is thousands of dollars over a 15 year term. Is there any rhyme or reason to this?

###### Aggregate answer from discussions with others (my words)

Nope, none whatsoever. In practice, you really can gain or lose thousands of dollars based on random fluctuations from one week to the next. Welcome to life.

### Step 13: TODO

I’ll have more to say once my own experience moves forward more.