When I started looking for a home during the COVID-19 pandemic, I thought I had a good idea of what I was up against. As a real estate reporter and editor, I was writing stories each week about home prices hitting record highs, inventory shriveling up, and bidding wars going insane—especially in the suburbs where my partner and I were looking.
As first-time buyers, we knew that finding a home outside of New York City wouldn’t be easy. However, we were done with paying what seemed like a fortune in rent for a small apartment in a city that had been largely shuttered and that no longer felt safe. So like many other first-time buyers, we naively believed that as two professionals we would somehow survive the process largely unscathed.
That optimism abruptly evaporated once we made our first offer on a house—and were promptly outbid by about $100,000.
Covering this housing market, I soon learned, was nothing at all like trying to navigate it myself. We suffered crushing disappointments and made more than our share of mistakes.
It took us nine months of scouring the market in three states, touring dozens of homes, losing multiple bidding wars, and rescinding another offer on a fixer-upper that would need more work than we could afford to put in, before my partner and I finally closed on our home late last year—a cute, renovated Cape Cod outside of New York City.
And, now that my homebuying odyssey is over, I wanted to share what I learned—things that no amount of writing about the housing market could teach.
1. Homebuying can take an emotional toll
I always assumed that my years as a reporter covering crime in New York City had made me tough. Someone I was particularly close with had to die before I would shed a tear. But each time we didn’t get a house, I would become a terrible cliche—curled up on the couch misty-eyed.
Meanwhile, my partner’s attitude was that if we didn’t get the house, then it wasn’t meant to be and that something better would come along. This wasn’t what I wanted to hear as I tried to find solace at the bottom of a pint of Ben & Jerry’s.
It wasn’t just the house itself I was grieving; I was mourning the life I thought I’d lost as well. The bright blue house with the big windows was close to one of my old co-workers and his family. If we had gotten that home, it would no longer be an epic trek to get out to his summer barbecues. But that home received 14 offers and was sold for about $150,000(!) over the asking price—a figure we couldn’t come close to competing with.
There was the Colonial with the stunning in-ground swimming pool where I imagined myself lounging by, on the patio with my laptop open, working all summer long. That one went to an all-cash buyer. Then there was the adorable, yellow Cape Cod that I fell in love with the moment I stepped across its Moroccan-tiled threshold. My partner, a trained artist, submitted an original illustration of the home with our offer in an effort to win the sellers over. But we were outbid yet again.
Finally, another Cape Cod came up for sale in a town we both loved, where we had been renting an apartment until we found our house. The home was recently renovated, located in a great neighborhood, and offered at an attractive price, where we had room to offer more. So we put in our offer.
We waived the traditional home inspection and instead asked for one that would evaluate the structural and engineering components of the home, such as the roof, boiler, foundation, electrical, and plumbing. This meant we weren’t going to back out of the deal unless there was a big, expensive-to-fix issue. Our real estate agent found us a mortgage lender that could close as quickly as an all-cash offer. That helped our bid—one of six—to be accepted.
My takeaway: Don’t lose hope. It wasn’t until our fourth bidding war that we emerged victorious. Something better could be heading your way.
2. You’ll likely have to make some compromises
Finding a home that you and your partner agree on, that’s within your budget, in a desirable location, and where you could comfortably spend five to 10 years isn’t easy—particularly in a highly competitive real estate market with record-low inventory. Just be aware that if, like us, you’re a first-time buyer with limited resources who can’t make an all-cash offer, then the home you end up buying may not have everything you want.
I feel incredibly lucky to have snagged a move-in ready home within walking distance to a train station in an artsy town along the Hudson River. However, it doesn’t have a garage (which won’t be much fun when it snows), central air, or a big backyard for our dogs to run around.
Initially, not having a large yard had been a deal breaker. But the previous owners had turned a corner of the property into a flourishing garden, and there was room to put in a deck without losing much green space. So we compromised. We will eventually add central air and have already made a nearby nature preserve a staple in our dogs’ daily walks. Plus, mowing the lawn should be a cinch this summer.
My takeaway: Figure out your must-haves and would-like-to-haves. Then be open to readjusting your lists, especially if you can add or fix any perceived shortfalls down the line.
3. Buying a home can be terrifying financially
After I came down from the exhilaration of finally having a home within our grasp, reality set in. Everyone we spoke with who had bought a home said they had experienced a moment of financial terror. We were no exception.
Within a few days of our offer being accepted, we were handing an attorney we’d just met what seemed like an obscene amount of money for escrow. That money had taken us years to save. While we believed this house would be a smart, long-term investment, we weren’t wealthy and hadn’t received any family assistance. This cash represented years of sacrifices and side gigs on top of our full-time jobs. And the bulk of it was about to be gone.
Not only that, we were about to sign up for 30 years of fixed-rate mortgage payments. We had crunched our numbers and knew almost down to the penny what we could afford if we wanted to still go on vacation, save for retirement, and manage financially if one of us lost a job. While we would be paying less each month than we did for a previous rental apartment on Manhattan’s Upper West Side, we would soon be locked into a towering debt. We couldn’t just move to a cheaper apartment if something went wrong.
My takeaway: Don’t forget to breathe. As long as you’ve done your homework on finding a home within your means, the panic of laying out so much money will eventually pass.
4. Don’t settle for the first mortgage you’re offered
Once our offer was accepted, the clock was ticking on securing a mortgage, and interest rates were rising fast. So I wasn’t pleased when our main bank offered us only a so-so mortgage interest rate that our lender wanted us to pay thousands of dollars worth of points to secure. (Buyers typically buy points to bring down their mortgage rates.)
A friend had urged me to shop around, since mortgage lenders often match better deals from their competitors.
I found an online brokerage, with no physical locations, that was offering lower rates with no points required, so I applied. When the offer the brokerage came back with was higher than what it had advertised online, I took a screenshot of the ad and asked the brokerage to match it. Then I took that offer to three other lenders with brick-and-mortar locations.
It was stressful since we needed to lock in a lender quickly, but I knew this would save us thousands upfront and thousands more over the life of our loan. To my relief, two of the lenders were eventually able to match the offer. I liked the lender at our own bank so we ultimately went with them—with a far better deal than they’d handed us at the outset.
My takeaway: It can really pay off to shop around.
5. Don’t move money around, close bank accounts—or buy a new iPhone
One of the most frustrating parts of the homebuying experience was the mortgage vetting process after we had been pre-approved. It felt like we were being stripped financially bare and then judged for every transaction we had made.
I knew not to open a new credit card or make a large purchase. But I didn’t understand that moving money around between bank accounts to come up with the down payment was problematic. I even made the mistake of closing one account at a bank I rarely used. This seemed to open up a Pandora’s box of dizzying inquiries, requests for documentation, and phone calls with our lender attempting to explain for the umpteenth time that we weren’t money launderers, the cash had come from a different account, and yes, we would include the bank statements to prove it. It was a vexing, blood pressure–spiking process that seemed would never end.
Then, shortly before the loan was approved, my 5-year-old iPhone died. So I bought a new phone through my carrier, agreeing to pay roughly an extra $25 a month until it was paid off. No big deal, right? Not according to my lender, who flagged this as a new debt. This kick-started a whole new debacle before we could get approved. The fact that I could afford my slightly higher phone bill seemed lost on the lender.
My takeaway: Before you even start looking for a house, consolidate the money you plan to use for your down payment and closing costs into one bank account (or two if you’re purchasing with a partner). And whatever you do, don’t finance anything, however small, before your mortgage closes.
6. Property taxes can add quite a bit to your monthly mortgage payments
When my partner and I started looking for homes, we were initially concerned with things like square footage, curb appeal, and living in neighborhoods within walking distance of restaurants, entertainment, and train stations. However, we quickly started paying closer attention to property taxes. We were shocked to learn that similarly priced homes could cost drastically more or less each month depending on those amounts.
The New York City suburbs are notorious for having some of the highest property taxes in the country. The taxes can easily add an extra $2,000 a month—or more—to a monthly mortgage payment for even a modest, older starter home on a small lot.
To put that in context, I have family in South Carolina who pay less than $2,000 in taxes a year.
Even more confusing: Many towns set their taxes differently. Some increase taxes only when homeowners make costly improvements to their properties. In others, taxes are more closely tied to the sale price of the home or appraised values. So when prices rise, so do taxes.
Just one town over from us, property taxes are about $700 to $800 more a month on comparable homes. (We immediately stopped looking there once we found this out.) And both towns share the same schools!
My takeaway: Don’t focus just on the sales price of a home. Factor in the entire monthly payments, which can make a more expensive home more affordable and vice versa.
7. Set some extra cash aside for your first few months in your new home
Spending my adulthood in city apartments with superintendents who would fix whatever was wrong, I soon learned that owning a house was far more daunting. The home inspector we used explained that our dryer vents would need to be cleared out once a year so as not to start a fire. I had never thought enough about dryers to realize they even had vents.
We needed to have sealant applied to the roof. Our boiler would need to be serviced before winter. The chimney would need to be cleaned along with our gutters. The locks would need to be changed. All of that money was quickly adding up.
And then there was the not-so-little matter of the hideously overgrown bushes in front of our home that looked like they had been fed steroids until they swelled and seemed to take up the whole yard. They had to go. But the quotes we received didn’t mention it would cost an additional few hundred dollars to have the unsightly stumps removed. Sigh.
My takeaway: We hadn’t realized just how much we would need to shell out, upfront, on maintenance and other necessities. Set some cash aside for these unexpected expenses in addition to the ones you know about, like closing fees and furniture.
8. Expect the unexpected
After my partner and I had our closing date, we were feeling pretty good. Our mortgage had been cleared to close, and we’d made good progress on packing up our place.
And then our attorney called: Our closing was going to be delayed.
The sellers, it turned out, were purchasing a property from a couple getting a divorce. And one of the spouses had abruptly decided to blow off her own closing to fly to Spain—with her real estate agent! Our sellers couldn’t move out of their house until the purchase of their new home went through. And that couldn’t happen until this woman returned from Europe.
Our apartment had already been rented out and we needed to be out of it ASAP. The whims of a woman I had never met would determine whether we would soon be homeless. It was the worst possible situation.
After our initial freakout, my partner arranged for us to stay with family for a few days while I looked for a dog-friendly place on Airbnb in case the delay would be longer. I also reserved an inexpensive storage unit nearby for our stuff.
Fortunately, everything worked out. The woman returned and signed the paperwork, delaying our own closing by just a few days.
My takeaway: No matter how prepared you are, you’re not in control of this process. Have a backup plan in place.
For this and related articles, visit Realtor.com