We’re buying a house!!

As if I haven’t shared enough exciting news lately, you know, with GETTING ENGAGED! There’s more…

We’re buying a house!

Okay, so we haven’t BOUGHT it yet, but we’ve decided to start looking. I was going back and forth between sharing the process or just waiting to announce until we had actually found a place, but then TIAA reached out to me interested in pairing up together to share helpful hints for those looking to buy in Chicago, and I figured–why wouldn’t I share this experience with you guys? 

It’s overwhelming, but also incredibly exciting–there’s so much we’ve learned along the way that I thought everyone looking to buy a house in the near future would benefit from! Read on for some updates, what we’ve learned so far, the neighborhoods we’re considering, and more! Eeek! 

I swear, two weeks ago we were teenagers, now we’re engaged and buying a house!? Where does the golden retriever come in?!

To say I’ve felt “over my head” several times during this process would be an understatement, but I’ve found a lot of helpful information on TIAA’s site. If you’re also looking to embark on the home buying journey, they’ve been really helpful in helping me make sense of it all–in case you want some required reading after this post 😉 

The Complete Home Buying Checklist
The Steps to Buying a Home (Including what to do when!)
6 Things to Know Before Applying for a Mortgage

Now–let’s jump in! Here are the five most valuable things I’ve learned so far about buying a home in Chicago: 

1. Know that buying in Chicago is likely a more “in reach” option than you realize. 

If you would’ve asked us a year ago, we would’ve told you that we wouldn’t consider buying in Chicago for another three to five years. We just never imagined that it would be in the cards for us, but in reality–in many cases, it’s actually a much smarter option financially. After all is said and done, a mortgage is often times cheaper than what you’d be paying in rent.

For example, we live in a tiny one-bedroom apartment right now, but are looking to buy a 3 bedroom. Once we did the math, we were shocked to find out that a mortgage for a three bedroom truly isn’t that much more expensive than our rent for living in an 830 square foot shoebox! 

There are also a lot of tax benefits to owning a home versus renting. You might be able to deduct mortgage payment interest, some of the closing costs, and also qualify for a new home owner tax break. Plus, you know, a monthly mortgage is money you’re going to get back–with rent, you’re essentially just throwing money down the drain! (But you already know this.) If you’re not sure whether or not you’re ready to buy, this article might help give you some valuable insight. 

 

2. Get an accurate picture of what you can afford before you look. 

When we first started perusing sites like Zillow and Redfin, we just guessed at how much we could afford based on what the “Zestimates” say–which, in actuality, aren’t accurate at all. There is a ton that factors into what you can and can’t afford–and it’s helpful to have everything down in one place so you can get a true, accurate picture of your finances. 

TIAA has this incredibly thorough budget worksheet which I would recommend to everyone. Yes, it does take some time to fill out, but it’s seriously the most helpful thing we did in order to get an accurate picture what what was and wasn’t doable for us. I’m so glad they reached out to me right when we began our search, because their site resources really gave us so much information that we never would’ve known! 

The worksheet essentially helps you build in your short term and long term goals, as well as important things you may have never considered. For example, it made us think through how much do we want to go on vacation in the next few years!

This, in particular, was especially helpful, because the last situation we wanted to get into was being “house poor” and not being able to enjoy our lives over the next few years just because we had purchased a home. 

After filling out the budget worksheet, it was time to reach out to a lender to find out what we were likely to get for a mortgage.

This is extremely helpful moving forward, so you can be more realistic in your home search, and decide if the number will work for you, or if you’d like to hold off, and save for one more year in order to get the home you really want.

After these steps, we felt a lot more prepared for our home buying search. 

 

3. Know the in’s and out’s of Chicago’s neighborhoods 

Chicago has 77 neighborhoods–yes, 77. Isn’t that insane? There are no two neighborhoods that are alike–all of them vary in age, architecture, and nuances that no normal person could possibly keep straight. There are the neighborhoods you know and are familiar with, and then there are some amazing hidden gems you’ve probably never considered. 

One thing that I learned pretty quickly is that the neighborhoods you’re used to “renting” in, might not be within reach to “buy” in. For example, we currently live in the West Loop and would love to live here long term, but for what we wanted within our price range, it just wasn’t going to happen. 

Instead, we broadened our search to other western neighborhoods as well, and were pleasantly surprised at how much more we could afford when looking outside of the most popular neighborhoods. (By the way, stay tuned for a fun “house hunting” video we just filmed with TIAA, coming soon!)

Additionally–depending on the area, there are a lot of pitfalls you can easily fall into if you aren’t careful, or working with an awesome realtor. Which brings me to my next point… 

 

4. Understand that it takes a village to buy a house

I never really put a lot of thought into how many people it really takes to buy a house, and the team you assemble makes all the difference in how smoothly the process goes. 

First off, do not take your choice of realtor lightly. Chicago is an insanely complicated market and if you don’t work with the right person, it could potentially cost you your dream home, or worse, result in buying a house that will cause a LOT of problems down the road.

Your realtor should be able to identify all of the pitfalls you wouldn’t normally think about. For example, if you’re looking at new construction, he or she should be familiar with the builder and what type of work they do. They should be your advocate and ask the tough questions that you wouldn’t normally think to ask, even if it potentially costs them a sale. 

Case in point: a lot of condos during the housing boom were built with a material called “split face block.” Essentially, a material that is so bad that it is now illegal to build with in the city of Chicago, with 50% of houses made with split face block experiencing horrible leaking issues, with the outside needing to be sealed every few years. 

NO THANK YOU. 

Our realtor was quick to point this out, letting us know that he was going to pretty much rule out any split face block homes from our search at the get-go–even if they were lovely, they were just too much of a risk in the long run, and he advised us to stay away. 

Also, because of his relationship with many local builders and other agents, we’ve been able to get into several places before they even go on the market. In a city as competitive as Chicago, this is often the only way to get your hands on the best properties in your favorite neighborhoods. A great agent is also available 24-7, because you often can’t afford to wait when there are 3 other people bidding against you for the same house. 

I cannot stress this enough. DON’T just work with that “friend of a friend” because they satisfy the definition of a “realtor.” Make sure they know what they’re doing!

If you need a recommended list of realtors, email me–I’m happy to introduce you to our agent, as well as some other awesome realtors I know, so you can make your own decision! 

The second member you need on your team? Your lender. Mortgage lenders are not always created equal, and I have heard absolute HORROR stories about this part of the process. (Honestly, this is what I am most nervous about.) It’s not just about getting the best deal, but finding someone you trust is also imperative. 

In choosing a lender, don’t automatically go with the best rate–find someone who will work with you to help you achieve your financial goals. Do plenty of online research, ask your friends and family who they’ve had a good experience with. Once you have an idea of your options, talk to several lenders to learn about the various programs available.  

In your discussions, make sure you look at things like interest rates, and ask for a breakdown of all the associated fees so you won’t be surprised by hidden charges. It might be helpful to keep a spreadsheet of each lender’s offer so you can make a side-by-side comparison. (Side note: for more help on “assembling your team,” this home buying checklist might be helpful!) 

Finally–this may sound obvious, but you need to make sure you and your partner are on the same page. Neal and I definitely wanted different things in the beginning, but eventually we were able to sit down and work out a compromise that satisfied what both of us were looking for. Which brings me to the final point…

 

5. Be realistic  

Kelly actually gave me really good advice–treat your house hunt like you would planning a wedding. (Which now, speaking of, I’m taking much more literally! Haha!) Her tip was this: 

Rank your top three priorities, and understand that everything else is negotiable.

We honestly didn’t even know what our priorities were until we started working with a realtor, but after that, we were able to narrow them down pretty quickly: 

Relatively new construction

I was vehemently against new constructions when we first started looking. I want something that is one of a kind, unique, not remotely cookie cutter. My dream is to have an adorable, one-of-a-kind vintage condo. New constructions to me generally felt cold, sterile, and sad.

Then we learned what really comes along with vintage, historic homes–you might get the charm, but you also get ancient pipes which cause plumbing issues, not enough electrical capacity, structural problems that require constant maintenance, and other really scary things that we just weren’t ready to deal with yet.

Additionally, with older condos, you just don’t run the risk of encountering problems with your own property, but you’re also on the hook to split costs with everyone in the condo association! That means, if the roof of the building is old and needs replacing a month after you move in, you could end up owing thousands of dollars! 

Now, of course, you run this risk with any condo association, but the risks are very much minimized with a newer building. We discovered that for our first home, we didn’t want to be tied down with stressful unforeseen costs.

We would rather have a newer construction now, and buy our dream “vintage” home to restore down the road once we had been through the whole homeowner’s rodeo once or twice. 

Easy access to downtown, the freeways, and other neighborhoods 

Location, location, location. I often feel like people either overthink this, or don’t give it enough consideration. Take a hard look at what you do for a living and how location close can impact your day to day life. 

For us personally, the neighborhood we buy in specifically isn’t as important to us as easy access to downtown. Neal travels a lot for work with the car, so easy access to freeways and the ability to hop in an Uber and be downtown within 15 minutes was really important. This meant that neighborhoods like Humboldt Park, for example, were ruled out simply because it’s just too hard (in our opinion) to get in and out of the neighborhood. 

On the flip side–if you work in say, a hospital downtown–living somewhere like Streeterville or The Loop is probably pretty imperative. You don’t want to be living in Lakeview and get a last minute call only to be stuck in traffic 30 minutes from downtown. (And in Chicago, being just 2 miles North can be a half-hour commute.) Whatever you do, take a hard look at your priorities, and be realistic with what is going to make life easiest for you! Sometimes that will require sacrificing the space for the location, or vice-versa!

That being said, we’ve really narrowed the search down to the neighborhoods of Wicker Park/Bucktown, West Town, and Ukranian Village–where you can still get more for your money while still having easy access to downtown. 

Charm, or ability to make a space charming with relatively little investment 

This was a non-negotiable for me–it has to be charming, and unique. This is really hard to accomplish with new constructions, and to be honest, I haven’t found a ton that I’ve really loved yet, but I quickly realized that I was able to let go of things like updated finishes or quartz countertops if the space was really unique. 

Of course, I’m much harder to please than Neal, but this is a good middle ground we were able to establish. We both agree: If I can’t make it charming, it’s cut–no matter how nice it is on paper. 

Next steps? 

Fingers crossed that we HOPEFULLY find the place that is perfect for us sooner rather than later! At that point, we’ll have to figure out what type of mortgage we want–fixed vs adjustable rate, and get approved!

(If you’re wondering the difference, this is something that your mortgage lender can advise you on. This article also helps explain the entire mortgage process, if you’re in our same boat and are over your head in financial jargon! It makes my head spin. Oy.) 

Be sure to stay tuned for a “house hunting” video coming next week!

Wish us luck! We’ll keep you posted along the way 🙂 

Huge thank you to TIAA for sponsoring this post and for helping make our house hunting/home buying process WAY less stressful!