Navigating the home buying process

I have a few friends who are currently shopping for their first homes. I've had a few people ask for my feedback on the first-time home buying process recently, so here are some thoughts. Buying a house is a big deal. Without a doubt, it is the biggest purchase you will ever make (or have ever made in your life so far). For example, my husband and I bought a house in April, 2010. We now have 29 years and 2 months left to go. That's a big commitment. Here are my top five pieces of advice:

1. Figure out why you are interested in buying a home. Do you want to put down roots? Have a stable home in which to raise a family? For investment purposes? Tax benefits? Make sure you find a home that fits your goals, and think critically about how long you are willing to stay in the home. As we've seen in the past two years, it's not always easy or profitable to sell your home when you want to.

Our house as it was being built

2. Make a list of the must-haves for the home you're looking for. Without solid criteria, you are likely to get caught up in the wow factor of a home that might not really be right for you. When we were looking for our house, here were some must-haves on our list: within 20 minutes of the city center, a backyard, enough space for us to stay long enough to have a family, and we weren't interested in a fixer-upper. We wanted a place that was move-in ready, but could be upgraded later.

3. Find a great real estate agent and mortgage broker and ask them lots of questions. We found our broker and agent through referrals from friends. Ask around and find someone who is trustworthy and informed. Everything about buying a home is confusing when you've never done it before. From the offer process, to the inspection and closing, make sure you know exactly what you're signing. A good agent, title company, and mortgage broker should answer as many questions as you can think of. In fact, I still email our broker occasionally for clarifications.

4. Be extremely realistic about your budget. You'll get approved for more money than you should probably spend on your mortgage payment each month. Keep in mind that when your broker quotes you your mortgage payment amount per month, it doesn't include property taxes, homeowners' association fees (if applicable), maintenence, insurance, or utilities. Ask for an estimated total cost.

Also keep in mind that you will undoubtedly come across last minute expenses at closing. Your closing costs are just an estimate until the day before you close. Don't put all of your liquid assets into your down payment. Ask your broker for an estimate of how much cushion is appropriate.  Then, add on any personal costs you'll accrue. For example, we didn't factor in that our brand-new home wouldn't have any window coverings. $1,100 later, we had blinds installed. Also, you may have to break a lease where you are currently living. And, don't forget about moving expenses and deposits on new utility accounts.

5. Be patient. This is the hardest one. You'll get attached to a home and excited about the possibility of moving in. Try not to get emotionally invested to a house until you sign on the dotted line. (I said try. I'm not sure if it's possible for most people!) Consider this doubly important if you are putting an offer in on a foreclosure or short sale. Closing on one of these properties can take months.

All this being said, don't let this scare you away! Although it can be a stressful process, owning a home can be very rewarding. We take a lot of pride in our house, love the sense of permanence, and enjoy the fact that each month, we own a little more of our home.

What home buying advice have you received, or have you given?

Extreme Couponing: Is it for you?

A few weeks ago I came across a show on TLC called "Extreme Couponing". It's about people who are extremely dedicated to collecting coupons and saving money at the grocery store. In some cases, they even end up getting things for free, by combining store and manufacturers' coupons. Check out a clip from the TLC show here. It is truly amazing. Although impressive (and I love that he gave some of his purchases to charity), I was a little skeptical of "extreme couponing", based on the amount of time it would take out of my week to score these kinds of coupon victories.

Tracy with her kids

I was recently put in contact with Tracy Vinson, a mother of two kids in Dallas. She is a big coupon fan, and has saved her family lots of money over the last few years. I asked her a few questions about her coupon quest.

How did you get started clipping coupons and thinking about ways to save your family money?

I tried couponing a few years ago and found it was too frustrating, so I quit and kept paying full price for all my groceries and pharmacy items. About a year ago I started receiving the Sunday newspaper through a special promotion. I saw the coupon inserts and thought I would give it another try. I researched online and through couponing blogs to find out the best method to use my coupons. I slowly started gathering coupons every week and printing them from online websites. It took a few months to get the hang of things and learn my store’s coupon policies, and since I have started I have saved at least 50%-75% on all my grocery & pharmacy purchases.

How much time do you spend per week working on money saving projects?

I clip most of my coupons on Sunday when I have gathered all of my newspaper inserts. Sundays are the days most of the coupon websites refresh their coupons, so I will log on and print out all the coupons I think I will use. I probably spend about 2 hours clipping and organizing on Sunday, then maybe another hour or so during the work week finding other deals that have come out.

How do you stay motivated? Many people want to try and save on things, but they get too lazy to actually clip coupons, or take the time to plan out their shopping trip. 

I stay motivated by thinking back to my previous shopping trips and remembering how much I have saved. I think of it as a challenge each week. It is such an uplifting feeling looking at the receipt and seeing what I spent and what I saved.

What is your advice to people looking to save money while shopping?

Start out slow. Couponing can get very overwhelming and you will find yourself losing motivation. Just give it some time. Also, stay organized; find a coupon organization method that works best for you.

Do you have an estimate for how much money you have saved in the last year?

I am in the process of making a spreadsheet so I can keep track in the future. I usually save anywhere from 50%-75% my grocery bill each week.

What is your biggest money saving/coupon victory?

I have been couponing for just about a year and have had many successful shopping trips, but the one that stands out the most to me is a Walgreens trip I did about 1 month ago. I purchased several items including some food items, cosmetics, shampoo, conditioner and toothpaste. After all sales & all coupons, I didn’t pay anything and I received about $10-$15 in register rewards to use on my next shopping trip. So you could say they paid me $15!


Do you have the dedication to be a extreme couponer?