My Condo Buying Experience + Closing Costs + Mini-Tour

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View from the balcony. Flowers are out in full force this spring!

Recently, house buying has been on my brain! I bought my condo three years ago, but last year, S finally moved in, so the 1000 square feet of space seems to have shrunk a fair bit. “No, I would not like to watch Avengers at 12:30am on a Tuesday night, so could you please turn down the volume?!” 😛

I’ve been house hunting a bit recently, and that got me thinking back to my condo purchase, and the uncertainty and excitement of the process, as well as the random fees. So I thought I would write down how it all happened, things I learned, a breakdown of those pesky closing costs, and what I’m planning to do differently this time around. I’ll also show some interior photos for posterity’s sake! (plus, play “find the cat” in every photo!)

1. Browse to narrow down the choices

Since I was new to California and to my city, I didn’t have a clue about the really fine-grained stuff that matters when buying a property – which neighborhoods are safe, which are walkable, which are new/old, which are near to good grocery stores, etc. Stuff that you can’t find out just by reading online statistics about an area – you actually have to visit the places in person to get a feel for things. So the majority of my time initially was spent browsing real estate websites (Redfin is my favorite), and visiting  open houses in prospective areas.

At first, this was really overwhelming – so many choices! But gradually after seeing a tons of options, my preferences started to bubble to the top. I realized I wanted a 2-bedroom condo,  relatively new for easy maintenance (built in 2000+), somewhat upscale (e.g., granite counter tops), and close to the university (for future rental purposes, since I eventually wanted to upgrade to a house).

With those preferences in mind, the number of possible choices dropped dramatically, and there was basically only one condo complex that satisfied all my criteria. So I settled in to wait for the unit to be listed.

What I  would do differently this time: Nothing. Just remember to be patient with the process, and your personal criteria will eventually become apparent, and feel “right”.

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My favorite room in the house: bedroom! The tan hua plant went kinda wild over there in the corner. The photo above the bed is from our wedding (printed poster-size at Costco).

2. Find a good real estate agent

Ohhh boy. This was where I really went wrong the first time. I asked my colleagues for agent recommendations, and one colleague recommended me an agent called B. B was about my age and seemed really friendly and helpful, so I figured I’d work with her.

B was indeed very friendly and nice, and did her best to help. But I later realized that she was a newbie agent, and was also the girlfriend of my colleague (which was not disclosed by my colleague until later, ugh). You can tell this story isn’t going to end well!

My first offer was a unit that I found in my desired condo complex. I emailed B and set up a meeting to go over the offer paperwork. As a first time buyer, I had a lot of questions. For example, if I backed out after X days, how much money would I get back? How long was the mortgage contingency? What did this particular clause in the paperwork mean? Maybe I’m a detail fanatic, but I like to know what I’m signing for in a large purchase! B basically read back the clauses to me verbatim, and upon my pressing her to explain things in layman terms, responded “I’m not a lawyer”. Pfffft.

Anyway, needless to say, that offer didn’t work out! By the time we submitted the offer, the property was gone. I feel this was an issue on B’s part, as I had asked her at the beginning to contact the selling agent and get a feel for how competitive the bidding would be, and whether there were other offers on the property. She didn’t do that, and had no idea how competitive the process would be, hence we were late. OK, /endrant

Anyway, it was awkward disentangling myself from B, since she was my colleague’s girlfriend, but it had to be done. I told her I was taking a break from house buying, and left it at that. Meanwhile, I met another agent, J, at an open house. She had a ton of good reviews on Redfin/Zillow, and also had purchased/sold many properties in the exact condo complex I was interested in, so I decided to continue my search with her.

What I would do differently this time: Don’t be a part of another agent’s learning curve! (I read this somewhere on another agent’s website, heh). Find an experienced agent in your area who will negotiate on your behalf.

As a side note, I’ve also heard good things about OpenListings from a colleague who recently used them. OpenListings is an online startup where they assign you a local agent, and they give you back half of the commission. I feel that with information dissemination on the Internet today, the value of a real estate agent is much less than in the past. Don’t get me wrong, you still need a good agent, but 3% commission ($7000 in my case) seems like hefty sum of money for the amount of work they do. I’m considering trying OpenListings for my next house purchase. But please correct me down in the comments if you disagree! (PS: not sponsored or anything, this is just my personal opinion.)

3. Swoop in quick on the desired property

For me, the hardest part of the house buying process was knowing what I want. Once I know what I want, it’s just a matter of patiently waiting for the right property to come on the market, then swooping in on it quickly once it appears.

My new agent J emailed me one morning to tell me about a property that had just been listed in my desired condo complex. I went to see it on the same day, and it looked good. It had been used as a rental for the past few years, but was in decent condition. It also had a great view of the canyon, although it was a little closer to the road than I liked. After thinking about it overnight, and discussing with my family, I decided to make an offer. We had the paperwork filled out the next day (with all my contingency questions answered fully by J!), and made an offer at full price.

A few days later, I got the notice that we had won, and were officially in escrow! I later found out that there was another offer on the property for $5k less in cash, but the seller still went with me because I was a reliable buyer in terms of mortgage risk.

What I would do differently: Nothing. Just make sure to be quick on the good properties, they won’t last long.

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Second bedroom, which is for guests and also doubles as a home office. The sign in the corner says “I work hard so my cat can have a better life”. Truth.

4. Lots of paperwork and inspections

J was fantastic and helped me with everything! She scheduled the inspection and several repair quotes (HVAC, carpet) to negotiate repairs with the seller. She recommended what items to push for and not to push for in the negotiations, and was aggressive on my behalf. I appreciate that, as I think I’m not the most aggressive person.

The rest of the process went pretty smoothly once we had agreed on the necessary repairs. It was just a matter of responding to information requests from the mortgage broker or real estate agent when needed. All the forms were electronic, which was great. Although with the amount of forms I signed, I could’ve signed away my left pinky toe to drug smugglers, and I still wouldn’t know it…

What I would do differently: Nothing. Again, as in step 2, just making sure the agent is good and on top of things. The agent can schedule inspections, repairs, etc., so that you don’t have to chase around those details.

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Living room. The carpet was one of the first things I replaced in the condo, as the seller refused to fix it (the old one was wrinkled and stained.) My favorite part of the room are the plants next to the window, they make me happy.

5. Pay up the monies and close

At long last, we were done with escrow! Next came the final closing costs and title transfer. You typically read online that the closing costs will be 2-5% of the total purchase price. I was curious, and dug through my old records to see how much it cost. In my case, it came to about 3% of the total purchase price.

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Closing costs

Some of the fees made sense (e.g., flood certification, credit report), while others seemed like a money gouge. Why $500 for a house appraisal? What is a $50 document preparation fee? $20 audit fee? Fees, fees, and more fees. Oh well, when you’re making a huge purchase, they slip in all these little fees, and you can’t be bothered. There was also an additional ~$2000 (not shown in the screenshot above) for prepayment of property taxes, HOA, and other necessary things.

It was pretty nerve-wracking sending the final closing costs through a wire transfer. I got all these scary notices from the escrow company saying to double-check the wire numbers and to call if there was any confusion, because apparently there were cases in the past where people accidentally wired large sums of money (i.e., their down payment) to scammers.

Another issue that came up was that I was actually out of town for work on the closing date! So I had to sign and notarize all the final forms in a UPS office in downtown DC and fax them over. It wasn’t exactly the most glamorous or exciting experience. My friends told me that at their closing, there are hugs and celebrations all around, although that sounds a bit useless anyway, so maybe I’m glad to have skipped that 😉

What I would do differently: I would be more aware of the timeline so I could be in town at closing, and do a final inspection. I might also consider negotiating all those darn fees, but I’m not sure if it’s worth the hassle, or if the fees are even negotiable.

Summary

Anyway, that’s the end of my condo purchasing story! I bought it for $230k, and Redfin now estimates that it’s worth $270k, so I think that’s reasonable appreciation over the last 3 years. In terms of finances, my parents gave me the down payment ($50k), for which I’m very grateful – thanks mom and dad! I’ve been mostly happily living there since then and gradually making small home improvements, which has been very rewarding. But that’s a story for another day.

Do you think the commission of real estate agents is fair value? How do you narrow down what property you like? Any general house buying tips or struggles?

What are the most expensive things you’ve ever bought?

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My most expensive items.

For this post, I thought it’d be fun to look at the most expensive things I’ve ever bought in my life. By listing them together irrespective of category, I wanted to see the equivalence between different items or categories of items, and the opportunity cost of my dollars. Is a luxury item really the same cost as a household appliance? Let’s find out! Note that I’m counting physical goods only, not services or repair.Read More »

Money Story of an International Student in the US

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American money needs some more color!

You’ve always heard of these great schools in the US. Although education is publicly funded in your home country, you want to see the world and try your chances in the  uber-rich United States. If you’re successful, you will be covered in wreaths of glory whenever you return home 😉 . How does one make it in the United States? (aka, the story of my financial journey in the US told in the second person)

  1. You need to get accepted to an American university. For undergraduate admissions, there’s a weird balance – on one hand, schools like the extra revenue that international students bring in; and on the other hand, they want to limit the number of foreign students, to preserve the character of the school and because some of their funding is tied to residents only. (The percentage of international students at my alma mater was ~10%.)
  2. You need to find money to go to an American university. With the sky-high tuition, US schools are so expensive! Are they even worth it? All these online websites and personal finance blogs (ok, not really, I didn’t read personal finance blogs back as a high school student) advocate applying for scholarships. But most schools don’t have scholarships for international students unless you’re a Math Olympiad genius. There are a veeeery few exceptions for some liberal arts schools and Ivy League schools.
  3. Luckily, you got accepted! And you’re not paying too much, through some combination of financial aid and student loans from your home country. You show up on-campus and being a good millennial, realize you need a smartphone. You head to AT&T and find out that because you have no SSN and thus no credit history, you have to pay a $500 deposit for the phone. You also record “00000” as your zip code, which will forever cause you problems whenever you’re trying to verify your account information to a customer service rep 😛
  4. After your first semester, you look for a job to help fund your education. Since you’re international, your visa severely limits your search to on-campus jobs (also, no work-study). Through a friend, you find one! But you need to get paid. You head to the sketchy SSN office in Harlem and sit there for hours waiting to be called. You get assigned a number that will follow you around for the rest of your time in the States.
  5. Meanwhile, you’ve been steadily using your debit card but want to get a credit card. You’ve heard about something called “credit score” that seems to be something useful. You apply for several credit cards advertised specially for students, but nope, denied for all of them because in the eyes of the banks, you don’t have any credit history (catch-22!). You get a secured credit card instead by putting $300 down.
  6. You graduated, yay! Since the economy sucks (go 2010), you decide to go to grad school. You receive a small stipend from your advisor since you are studying a STEM field. But you can’t apply for any of those nice National Science Foundation scholarships because they’re restricted to US citizens only.
  7. You go to fill out your taxes, and realize you’ve been here for 5 years and thus become a resident alien for tax purposes. This means that you are taxed at slightly higher rates than before. But you’re still a non-resident for immigration purposes, boo. You still have to wait in the long-ass lines at JFK when entering the country, since you can’t use the automated machines.
  8. You want to pay back your student loan using some of the education fund that your parents invested for you back in your home country (similar to a 529 fund). But because of the unfriendly US tax code, you are charged taxes on its earnings as a foreign trust, basically removing the original tax advantages of the fund.
  9. You graduated grad school and found a job! You’ve finally made it! Happily settled, you start the legal immigration process for the US. 3 years and $10,000 in lawyer’s fees later (luckily paid by your employer), your application is still stuck in the quagmire known as the United States Citizenship and Immigration Services. You keep waiting… and waiting… and waiting…

Now, in all seriousness, I know some of the things I said here are trivial. For many international students, going to US for school is a dream that so many other factors have to come together for. Also, I grew up in a first-world country, and didn’t have to face additional barriers, like language, culture, money, and family support, that “true” international students have to face. I see my own PhD students (who are from China and Iran) facing the challenges above, and many more. But I wrote this post as a reminder of the little things that long-time residents of the US, like myself, take for granted.

Have you ever been a stranger in a foreign land? How did you handle “starting up” your banking/credit accounts?

The Cost of Keeping a Cat

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Camouflage, kinda.

I promise this is not going to become a crazy cat-lady blog! I only have *one* cat, who I got for companionship when I first moved to California. I know nobody wants to hear about other peoples’ pets, so I promise this will be the only cat-related post. Not a word more about cats after this (unless you follow my Instagram 🙂 )

I’d always wanted a pet, but previously being a student and  living in rentals, it wasn’t the best idea. After finally settling down and starting work full-time, I thought it was a good opportunity to level up my adult life and get a cat. I love dogs, but since I’m not home all day and live in a condo, a cat seemed like the more responsible option. Thus, Zuri came into my life! In light of her two-year anniversary of joining the household, I thought it would be interesting to look at the expense of keeping her.Read More »

Expenses after Co-Habitating

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Our newlywed custom t-shirts!

Despite all the potential financial disadvantages of marriage, there are some upsides to co-habitating as well! Since monthly expense reports seem to be all the rage on those personal finance blogs, I thought I’d do one myself, comparing expenses before and after my partner moved in, to see what has changed. I’m not planning on making this a regular series, as there are approximately 1024 other blogs if you want to read other people’s net income or expense reports 😛 This is just a financial glimpse into our lives, as I weirdly enjoy reading these reports on other peoples’ blogs.
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The Financial Downsides of Our Marriage

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His and hers wallets. Nom nom nom.

The benefits of marriage / co-habitating are well-known: shared living costs, combined incomes, improved health in the long term, and so on. I love my partner and we got married about a year ago (for non-financial reasons 😛 ) But as an exercise, I decided to estimate how our finances have changed after marriage. It turns out that in our case, there are severe financial penalties to getting married. I had vaguely known about before, but it was kind of shocking to see the hard numbers as I wrote this post. Here we go.

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My Money Map

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I know I’m late to the game, but I wanted to create my very own money map. This is basically a diagram that shows how money flows from your paycheck to your various accounts, optionally with percentages that break down your spending. While some of the other money maps are wild, colorful, and full of emojis, I guess I’m a boring person, because I went for a clean style. Here it is!Read More »

Cost Per Mile from a Year of Biking and Driving

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Ride or die drive?

I live in southern California, where everyone drives, lives, and breathes (literally) car. The public transportation system isn’t that good out here; there’s no subway in my city, and trains are spotty unless you happen to be going at exactly commuter hours (how I miss you, 24/7 NYC subway!) I try to bike to nearby places if possible, and use the car on the weekend for errands. I know that the car costs more, but it covers more miles; while the bike costs less, but also travels less distance. I wondered, what’s the cost per mile, based on data from a year of usage?Read More »

Is an Engineering PhD Worth It, Financially?

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Annual wages over time during a typical STEM PhD.

Have you ever thought about doing a PhD in STEM (science, technology, engineering, or mathematics), and wondered how much money you make? Having gone through the grind myself, I thought I’d take a look at the numbers. I dug through my old W2s and found my net income during grad school. I wanted to answer the question: Is doing an engineering PhD worth it, financially?

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