Buying a house can be as agonizing as asking for a prom date, and as frustrating as your worst flare-up of acne. And those are just two of the ways real estate is like high school.
Of course, as most people remember from their own experiences (or, perhaps vicariously from John Hughes films) is that while high school is an awkward series of painful firsts for some, others seem to sail through it like they've been there before and know how it all works. One good thing about real estate as opposed to high school is that it gives you a better chance to be one of the confident few.
In high school, trying too hard can be socially fatal. In real estate though, preparation works. If you would like to cruise through the home-buying experience like a self-assured high school senior rather than a nervous, first-day freshman, you need to know a few rules, and take some steps to get ahead of the experience curve.
6 Ways Real Estate Is Like High School
Here are some rules to remember - six ways in which real estate is like high school:
- The cool kids - and the cool properties - tend to hang out together. Real estate agents warn against buying the most expensive house on a questionable street , because property values tend to gravitate towards the area norms. Your house is more likely to hold its value if it is surrounded by similarly valuable properties. At the same time though, if you do not want to pay up for a prestige address, you might be better off forgetting about the cool kids' table and finding a niche neighborhood that fits your tastes -- and budget -- better.
- Reputation is everything. When it comes to mortgages, your reputation is your credit report. As you may have learned in high school, it is much easier to maintain a reputation than to repair one, so even before you are in the market for a house, you need to be conscientious about your credit history.
- The more fashionable a style is today, the more mortifying it may be in the future. Anyone who has looked at an old yearbook full of 1970s outfits or 1980s hairstyles can attest to this. Remember though, the bell bottoms or high hair are much easier to fix than renovating a home whose style may have been a bit too trendy when it was built.
- Like it or not, you cannot avoid math. Even if you hate crunching numbers, get ready to cozy up to a mortgage calculator. You probably could not have gotten through trig class without a calculator, and you are going to need one again now.
- Plan on spending a great deal of time with applications. An inordinate amount of your junior and senior years may have been bogged down by the drudgery of college and financial aid applications. Get ready to do it all over again when you start applying for mortgages and putting in offers on houses. Just remember that the same thing is true now as it was in high school - care and accuracy count for a great deal when someone is trying to get to know you through what's been entered on a form.
- Just when you sort of figure it out, it's all over. At some point in their later lives, people often wish they could do high school over again, knowing then what they know now. It's the same with buying a house for the first time - it's an unfamiliar experience, and often people only learn anything from it after it's over.
Advanced Placement: How to Get Ahead of the Knowledge Curve
So how can you make buying a house a little less like one of those recurring anxiety dreams about high school? Rather than waiting to learn from the experience, get ahead of the knowledge curve in the following ways:
- Start following the market in your target area early. Even before you start looking at houses, keep an eye on how long properties in your target area are on the market before they sell, and whether they tend to go for above, below, or close to the asking price.
- Get your financial information together early. Don't be forced to scramble once you are facing an application deadline - gather your financial information in an easily referenced format so you'll have everything ready when it is time to apply for a mortgage.
- Use online resources. If you are inexperienced in real estate, benefit from the experiences of others by reading articles on house hunting, mortgages, and other related topics covered by online real estate web sites.
- Commit to seeing several properties. In particular, taking a power tour of open houses can get you up to speed on the local market in a hurry - sort of like freshman orientation on steroids.
- Compare quotes from different mortgage lenders. Unless you are a seasoned pro, you won't know right off the bat who the most competitive lenders are and what a fair mortgage quote is. However, if you get lenders bidding against each other, competitive forces should make up for your lack of experience.
- Use an amortization table to spell out what a loan will look like. Unless you have been working with mortgages for years, it is hard to have a feel for what a slight tweak to rates, points, or fees will do to the overall cost of your loan. An amortization table will lay it all out for you, and give you a schedule of payments to budget around.
Maybe high school was a breeze for you and you loved every minute of it... or maybe you think the movie "Carrie" is a fuzzily nostalgic view of high school compared to your experience. Either way, buying a house is no time to return to the naiveté and immaturity of a freshman. Learn something about real estate before you enter into the experience of buying a house, or you can expect to pay for that experience for years to come.