Buying a House 101: A Husband’s Perspective

Introduction:

My wife Amanda and I have rented rooms in group houses, townhouses and apartments in Washington, DC for the last 10 years. Some of the recent areas we were proud to take our parents to, other places we lived in only felt safe during the day. Some of the apartments had pools on the roof and dog parks, others had absolutely no storage space and suspect landlords. Such is life in DC – you get what you pay for, but as we enter the next stage in our lives as newlyweds, we are fortunate to be leaving the rental game and buying our first house. This blog post details what went through my mind as we started our journey to find a house.

Action on the home front

Step 1: Deciding What We Could Afford and How We Planned for the Purchase

My wife and I are blessed in our current jobs. She is a stellar PR director for a nonprofit that used to work for a lobbying firm and I am three years deep into my career as a medical equipment sales rep after a number of years working for a consulting firm.

We dreamed of buying in DC for years, but had only been Zillow “lurkers” up until the time we got married in November 2016. At that point we decided to start taking steps toward being able to buy. The first thing we did was take full inventory of our debts and start seriously monitoring our credit scores to see where we fell on the spectrum. I had a car note, student loan debt, and we both had some minor credit card debt. I set a goal to pay off all of my car and student loan debt by April 1, 2017 so we could start looking for a house by that Fall. 

After I paid off my car and student debt by my target date and we both felt comfortable enough with our strong credit scores, we began seriously looking at the real estate market. I initially started by playing with home mortgage calculators online to see what we could expect to pay in a monthly mortgage based on home prices. 

Knowing what we pay in rent currently, we set a target price of $525,000 – with a maximum budget out the door at $600,000. We felt comfortable we could come up with 10% in six months for our down payment – knowing full well that we would not qualify for any first time grants due to our combined income. But how far would our budgets go in the country’s third most expensive housing market? That was the big question.

Step 2: Deciding What to Buy and Where to Buy

It became very clear early on that we had three options, and only three options for housing in the city: buy a small two bedroom condo in an area like Navy Yard (our current neighborhood) or Petworth, buy a two bedroom townhouse in an area like Rhode Island Avenue, or buy a three bedroom fixer upper in an area that might be up and coming in the next 10-15 years. We had a serious conversation to set parameters behind what we HAD to have with our money. 

My only non-negotiable was that the house had to be able to serve as a safe house for our extended family. My own family has had their share of ups and downs and I had to keep the biggest promise I made to my Mom when she passed away – that I would do everything possible to take care of my Dad. I needed at least enough space that we could have a child – God willing – and an extra bedroom for emergencies. 

My wife had her own set of goals (thanks HGTV!), and after a brief discussion we knew quickly that we would need to move outside the city to find a house that met our needs and didn't break the bank. So we narrowed it down to Reston and Ashburn/Loudoun County to the west, and Woodbridge and Manassas to the south. I travel HWY 66, I-495 and I-395 enough that I was always going to be partial to heading to the southern Virginia suburbs (thanks in large part to my company-sponsored EZ Pass). 

Amanda took charge early on sending me listings and I kept up with numerous reports about the Silver Line being built out in Loudoun County.  Nothing ever really caught my eye out west for the price point there though.

While on Facebook one day, I saw a Potomac Shores ad and I became incredibly intrigued at the advertised starting prices and the pictures on their web page. The houses looked like something out of a post card – somewhere I could see myself raising a family-- and it didn't hurt that it was voted the #1 new community of the year in 2016.

Our first visit to the community sealed the deal and of course we could easily afford a house starting in the upper $400’s – right?

Step 3: How to Build a House

As a naïve renter, I had no idea that upper $400’s meant the shell and that’s about it. Everything my wife (and I to a lesser extent) wanted came with a price tag. 

Want extra carpet padding? Upgraded granite counter tops? A fireplace? Better elevation? Bigger lot? Cha-ching! Quickly, I realized we could easily add $75K-$100K to the base price – but then we got incredibly lucky. 

A house (the last one in the Fairways Cove neighborhood) fell back on the market and we pounced quickly. I got the email blast about the house on a Thursday and the next day we were there to scope out the lot and have a discussion with our real estate agent Patty Blackwelder and Ryan Homes. We had another conversation re-visiting our housing budget since there were also some new lots that came up for sale in another area of the community that day that we began considering.  

Due to the urgency of needing to sell the lot, Ryan Homes threw in all sorts of incentives and free upgrades at us that would slash the build budget by tens of thousands, including a deck, upgraded countertops and appliances, crown molding, a washer and dryer, finished basement and $10K to put towards closing. The offer was too good to pass up so we jumped and put $5k down less than 24 hours after seeing the original email.

My wife has covered the selection meetings in-depth, but hopefully this paints some picture of the anxiety that is created when you don’t realize every selection can come with a cost. But the words to remember here are OPPORTUNITY and RESELL. 

What will happen when we go to sell our house in 5, 10, 15 years in what will then be a potentially packed residential development? What happens when our home is competing against similar homes at comparable price points? 

You begin to wonder about how construction elements like a finished basement and welled exit that you may or may not have decided to add will affect the price of your house. This is when it's helpful to have a real estate agent like Patty who can identify unique opportunities like ours that will help you get the most bang for your buck, and who can talk facts and figures with you to help decide what options will pay off the most in the future should you need to sell. 

Real estate is ultimately a gamble on what the future market holds, which leads me to…

Step 4: Betting the Future

This is the section where I talk about what I don’t know.

Map of  Planned Potomac Shores Amenities

Even during out first tour of the community we were told that there will be a VRE station opening in early 2018 (which was originally supposed to be early 2017). We have been told there will be a commercial development featuring restaurants, a luxury hotel, shopping – all within walking distance of the Potomac Shores Club House. 

As someone building my house in the neighborhood this all sounds incredible and I can see the house appreciating with every future announcement. But in my head, what happens if none of this comes to fruition? What happens if the proposed townhouses and villas end up not selling which discourages commercial development? 

This seems doubtful given all the buzz and current sales in the community, but you never really know. Ultimately, we decided we are okay with things the way they are now – and that’s why I know this was the right call. 

We are happy with what the house holds for us in the community’s current state. If the house you are buying or building will be your primary residence, you really have to be happy with what the current neighborhood offers today, not tomorrow, in order to be comfortable spending your hard earned money. This includes everything from your commute to the schools, area amenities and more. 

I'll admit there are a couple of things that I would change if I could.  Anytime I start to get sad about a smaller back yard than we originally anticipated or a price tag that would be considered high anywhere outside of this area though – I remember that our yard is bigger than anything we could have found in DC and the house is a size that will allow us and our families to grow into it.  This is something that would not have been possible in DC, where we would have been sized out of a small condo or townhouse within the next 2-3 years. 

I can’t wait to see what the finished product looks like and am looking forward to writing more about this amazing journey.  Expect to see more posts from me in the future!

Adam