First-time home buyers as academics

[HappilyTenured]

Hello,

For those of you who bought homes, when did you do it ? Before TT, during your TT, after you were tenured?

[ergative]

I'm looking into this myself at the moment. My institution doesn't do tenure in the traditional sense, but (fingers crossed!) I might get the equivalent bump this summer, and Absolutive and I are hoping to buy this summer too. Pity the housing market is so wild right now, but I tell myself that if we're in it for the long haul it won't really matter if we stick with what we can afford. A house doesn't become any less of a place to live if the prices crash in a few years.

[sinenomine]

I managed to buy my house when I was an adjunct. Happily, I landed a full time job at the same school a few years later.

[Ruralguy]

Before tenure,but might have been better to have done so after.

[arcturus]

I purchased my house during my first year on the tenure-track. However, I live in a college town, so the rentals are dominated by students. Some of our graduate students have purchased houses/condos because they can be good investments even on that short-ish timescale, as well as better places to live.

[Hibush]

When first getting a TT job. Like many college communities, the rental housing is for students or for people on social assistance. (Now, also short-term vacation rentals). The houses you'd like to live in are not for rent. You have to buy.

Work with a lender that understands the local situation, especially a credit union. Colleagues made the mistake of working with national banks (BofA, WF) and had no end of hassles.

[Puget]

During the third year on the TT. Expensive market, so I needed those three years to save more toward the down payment. Regardless though, I think it can be good to rent anyplace new for a year to get a better sense of the neighborhoods and where you want to live. That said, the two people hired after me in my department both bought right away and see happy with their decisions (both had kids, which I'm sure makes renting for awhile and then moving again much less appealing).

I'm very glad I bought when I did, since the market has continued to go up and inventory down, and of course interest rates are now rising again. Most importantly for me, having a house with a yard was a major lifestyle upgrade especially during the pandemic.

[emprof]

I bought when I was on the TT and past reappointment.  But that timing was coincidental. In my case I decided to buy because I had recently married, and the second income plus getting past the wedding expenses helped us make a more realistic budget.

However,  I regret not taking the plunge and buying a small bungalow at the start of the TT as a single person. Our city became a hot real estate market a few years later and I would've made a killing.

[OneMoreYear]

We bought when I was non-TT (still am), and SO was in a career transition.  Our rental house had serious problems that the our landlord would not fix, so it was move to another rental or take the plunge.  We had to do it quickly, and options in our budget were somewhat limited. I don't regret buying when we did, but I wish we'd had some more time to look at more options.

[Parasaurolophus]

Not a house, but we bought land (with a tiny cabin) in our rural community a little over a year ago, while I was still in the probationary period (there's no tenure at my institution). We had a small pile of money which my partner inherited, and it was just about enough to get land (but nowhere near a house; although not a paltry sum, it wasn't even enough to qualify us for a loan sufficient to buy a whole house--and that despite the fact that my job actually pays pretty well). Given the astronomical prices in the area, we figured that our only hope for a house eventually was to buy some land before we got priced out.

So far, that's proven correct, as the pandemic drove prices even crazier. The property's assessed value is now over 100k higher than our purchase price (itself a fair bit over the previous assessment). We could not have bought it this year, and there's no end to this market in sight. (I haven't seen a single parcel of land--including much smaller ones--selling for what we paid in the last eight or nine months). Now I'm out of the probationary period and we just need to cobble together enough to qualify for a building loan, which will take time but is at least possible in the medium-term, and on my salary.

[Liquidambar]

We bought land during my third year on the tenure track.  We intended to build a house on it then, but there had been some recent changes to borrowing rules due to the 2008 financial crisis and we needed a much bigger down payment than expected.  The lender lied to us about it until fairly late in the process, so this took us by surprise.

We finally built our house the year before I went up for tenure.  Perhaps that doesn't seem like optimal timing, but we had saved enough by that point and tenure appeared likely.  Plus we were getting sick of our landlord threatening to sell our rental out from under us.  (And our rental kept flooding.  And the landlord had started renovations with us living in there but had run out of money to finish them.  Ugh.)

Like Hibush, I highly recommend working with a local lender.  We were 100% satisfied with the local bank we switched to after the initial fiasco.

[AJ_Katz]

First house was a condo that I bought as a graduate student during the recession and still own it as a rental property.  We bought a house sight unseen when relocating for my first faculty job, upgraded to a new house four years later, and just this past year relocated across the country to a new house bought sight unseen and "as is".  This past year's housing market has been bonkers.  My heart goes out to anyone who is a renter or a first time home buyer in this market. 

In my experience, brick-and-mortar lenders can't match mortgage terms offered by online-only lenders these days.  Since lenders target different parts of the real estate market, you just have to shop around to find the company that will give you the best rate for the size loan that you're looking at -- in my experience, getting word-of-mouth recommendations about lenders from other people has never resulted in finding the best rate / terms.

[Hibush]

In my experience, brick-and-mortar lenders can't match mortgage terms offered by online-only lenders these days.  Since lenders target different parts of the real estate market, you just have to shop around to find the company that will give you the best rate for the size loan that you're looking at -- in my experience, getting word-of-mouth recommendations about lenders from other people has never resulted in finding the best rate / terms.

Matching the lender to the situation seems to be the key. I'm interested in extreme situations, so I had an opportunity last year to visit the Stanford credit union. I asked directly if they made house loans to new assistant professors at Stanford who had no equity, normal salaries and were hoping to buy a house in Palo Alto. They said "sure, all the time." Stanford pays their assistant professor pretty well, but not enough to swing a two-million dollar mortgage under most lenders terms. That sum would be the minimum for a house in that town. Of course if the borrower defaults, the credit union has not problem selling the house immediately for far more than the balance.

[Liquidambar]

In my experience, brick-and-mortar lenders can't match mortgage terms offered by online-only lenders these days.  Since lenders target different parts of the real estate market, you just have to shop around to find the company that will give you the best rate for the size loan that you're looking at -- in my experience, getting word-of-mouth recommendations about lenders from other people has never resulted in finding the best rate / terms.

I guess it depends on whether you're buying something slightly weird.  We bought a large parcel of land and then built a modest house for the land size.  This wasn't a mansion or million dollar horse farm as one might expect based on the acreage.  The biggest issue was finding a lender who understood rural life and was willing to be flexible about comparables for the appraisal.  The rural credit union was great for us; national lenders were not.  (This happened to be when interest rates were at a minimum, so everyone was offering good rates.)

[Sun_Worshiper]

We bought a house about 3 years into my tenure clock. We were tired of apartment living and I was on track in terms of research productivity and happy enough in my department/city. I would like to have bought even sooner, but needed to save money and get a feel for the city and for the housing market.

Prices have boomed in the years since, so we should make a nice profit if I get denied tenure and we have to move - which I hope won't happen.