Photo: Moore Realty Group (not the house we bid on)
It’s no secret that first-time millennial homebuyers do not have favorable odds in today’s fiercely competitive housing market. My fiancé and I knew this when we placed an offer on the first home we saw and loved—a charming midcentury ranch just over 1,100 square feet. The house was a true “starter home” with nothing fancy about it, but was elevated from the undesirable fixer-uppers we’ve been seeing. It was only our third property in our two weeks of active house-hunting, but we knew we had to be ready to pounce.
We put an offer in on the spot—$10,000 over the asking price and offering to pay $3,500 of closing costs. Initially we included all closing costs in our offer, but panicked and reduced our offer. Yes, asking a seller to pay any part of closing costs in a “seller’s market” weakens the appeal of an offer, but we simply don’t have the cash to lose. We have minimal savings, and didn’t want to drain them completely leaving us with nothing when we moved in.
The reality of our position set in when we found out (after two long days of waiting) that the seller had gone with another offer. This didn’t surprise us, of course, as there were dozens of people at the open house we attended. We had discreetly eyed our competition, wondering what their positions were and assuming (correctly) that many of them were flusher than us, making their offers naturally more appealing. I’ve asked our agent for some insight, and the unfortunate truth is: We are at a tremendous disadvantage in the current housing market. We are going with 100% financing through USDA RD. We don’t have a down payment. We earn low salaries. We have auto loans and student debt that we can’t just magically erase overnight, even though we’re really good with our money and have excellent credit.
Being outbid on what would have been our perfect home felt terrible. Even though it’s what we expected, it still sucks to hear from your realtor that buying a home will be a struggle for us because of our position. It all comes down to that almighty dollar. Having a steady job and good credit hurt you if you don’t have them, but having those things doesn’t really help you. It was the absence of cash that stung us, and will continue to. It feels like an insurmountable, impossible obstacle. How can we compete in a seller’s market when we don’t have heaps of money?
Becoming homeowners is important to us, and we’ve already worked so hard to get where we are (even though we’re not swimming in cash, sadly). Right now, it feels like nothing we can save is significant or good enough, even though we are tucking away about $500 a month between the two of us. It’s so difficult to not feel discouraged, even at the beginning of our house-hunting journey. We’re getting married in a month and a half, and we desperately want a home of our own so that we can start our life together as husband and wife, and hopefully have a family. The reality we’ve woken up to: It will not be easy. It will not take two weeks. We will have to spend most of our savings. It will be frustrating, difficult, and disheartening at times. Right now it feels awful, but every month that passes gives us another chance to save money, and continue our quest for finding a home to call our own.
I’m thinking about making a first-time homebuyer series here, from our perspective as two “broke” millennials. If that is something you’d like to see, let me know! Share your thoughts, comments, and advice in the comments below. I’d love to hear from you.
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