Several weeks ago, my new husband and I almost rushed into the biggest financial decision of our lives: buying our first home. Mind you, we had no intention of buying a house in 2014. Our plan was to start looking for a house in mid-2015, after we made it through our November wedding. But my affinity for perusing various real estate applications quickly turned into some casual open house visits, and lo and behold, we stumbled upon the perfect house.
The Perfect House, Just Not Financially
The house was an adorable, pale-yellow Spanish-style three-bedroom, with a high-beamed living room and a big, open kitchen. It was in the perfect location between our jobs, was in a great school district and even had a converted garage that would make the perfect man cave (a must for my husband). We were obsessed … and we had to have it.
The timing was wrong. Our finances were not quite where we wanted them to be. The details on the kinds of mortgage we could get were still up in the air. But the house already had two offers on it and would go fast. Ignoring the red flags flying up all around us, we submitted an offer. And of the three offers, ours was accepted.
We were elated. Then excitement quickly faded to panic as we started to realize what would have to happen for us to be able to pull this off. We would have to coordinate with our mortgage broker to figure out a mortgage that would allow less money up front, take a loan from my 401(k) to supplement the down payment and manage inspections and the rest of the process all while we were out of town for the holidays. With a short escrow planned, it seemed all but impossible.
Thirty-six hours later, we canceled our offer. Though we were sad to let our perfect little house go, the relief that we both felt was palpable. There was a good chance that we would not be able to get all of our ducks in a row in time, and we did not want to string the seller along.
Waiting Until the Timing Is Right
This whole saga showed us that in thinking emotionally, we nearly broke every financial home-buying rule in the book. We almost did the things that I actively discourage my clients from doing, including taking a loan against the value of a 401(k).
There is no part of me that thinks that buying our first home is going to be a fairy-tale process. But we are going to wait until the timing is right for us. We know there will be another perfect house out there when we are ready. After all, it’s not going to be the perfect house until it is our house.
