Gene Mundt - Let's Talk Mortgages & Real Estate!

     After reading and commenting on an article written by AR member Rich Edgeley, Greater Chicagoland Home Inspection, How Old is My House? A Greater Chicagoland Home Inspection Primer Pt 4, I really got reminiscing about my own real estate and older home experience.  I thought ... maybe there are lessons to be offered here.     

     As I related to Rich, our first home was what would kindly be called a "starter home".  The old deed given to us by the property estate at closing read 1857.  

     Tucked up way in the corner of a large lot (you could lie with your feet touching the front of the house and your head would either be lying in the middle of the sidewalk or in the neighbor's bushes) the house measured a whopping 625 square feet in size.  It had one closet and that was on the unheated enclosed front porch.  There was no central heating system ... obviously meaning no a/c either.  There actually was a horse hitch on the front porch!

     The electrical service was 20 amp.  The house literally went dark when the fridge we bought and placed in the house during remodeling, kicked on.  The kitchen sink had a hole in it where the pump had been at one time.  There were no kitchen cabinets.  The floor of the tiny pantry was the entrance to the small basement below.  The foundation of limestone was very solid ... one of the strongest determining factors for our purchase.  We saw potential.

      The other feature that secured our purchase?  We could split the large lot the house sat upon into two lots ... selling the vacant parcel to gain enough money to do the upgrades and remodeling we hoped to tackle in the little home.  Where Marilyn and I saw potential, others saw pitfalls.  To put it bluntly, people thought we were nuts.

     Long story short, we estimated that we would be in the house around two years.  That would give us enough time to do the work we wanted, sell, and move on.  However, it didn't quite go that way.  Son #1 arrived and the sale date was adjusted.  Then the 80's downturn/recession became a factor.  Son #2 made his appearance ... and we ended up staying in that house almost 8 years. Hmmm .. big change of plans! 

     When we finally did move on, we had more than doubled the size of the home and completed huge remodeling projects.  This little house turned out to be the best financial investment we have ever made, so far.  It enabled us to construct the brand new home we had been dreaming of.

     We thought that we'd never leave the new house we designed and constructed.  We loved it.  Marilyn used to kid that we'd install headstones in the back garden for ourselves.  We just never envisioned ever moving on. 

     But when the kids got older and left for college, we took stock of the size, the upkeep of all the landscaping we had lovingly installed, the two-stories, us getting older ... we decided we had been wrong.  The time had come to move on. 

     What lessons for first-time homebuyers are contained within this piece?  The story proves ... you can't predict the future. Situations and plans change and they can have a trickle down affect on your real estate ownership and financial positioning. 

     So when it comes time to buy, you need to take time to prepare and educate yourself regarding the purchase property and the financing you are about to enter.  The decisions you make need to be a wise and good fit for you in the short term ... but yet have flexibility and the soundness demanded for longer term as well. 

My suggestions when you're considering and approaching a purchase?

• Allow plenty of time to prepare for that purchase. 
• Align yourself with knowledgeable, experienced professionals from the onset.  Utilize their expertise and benefit from their wisdom and guidance. 
• Learn to listen well.  This is so very important!
• If credit issues and lower credit scores are currently a problem, address them squarely and improve them now.  Minimum scores for financing have been raised considerably.  The higher your scores, the better and more flexible your financing positioning.  
• Have a back-up plan that will fit your needs should life situations change. 
• Allow monetary flexibility and breathing room for home repairs, emergencies of all kinds. 
• Learn from others' examples ... borrow from the good and intelligent decisions made ... and take steps to not repeat the missteps or errors.  
• Know the housing market you are considering. Again, educate yourself thoroughly. 
• Educate yourself to all your housing and financing options. 
• Be prepared to roll up your sleeves and do some hard work ... both mentally and physically.  As the current market will prove, you are best off as a homeowner if you have done your homework, lived within your means, and taken measures to protect yourself financially as best as possible. That means leaving room within your budget for savings.

     All the preparation ... all the time spent educating yourself ... the ability to listen well and follow directions given by the professionals you work with ... not overtaxing your budget ... saving ... it all will prove-out to be worthwhile.  No, you cannot predict the future ... but you can prepare and position yourself to handle it in the most advantageous ways possible.