Things I Wish I Knew Before I Bought My Second House


I just finished purchasing my second house. We bought our first four years ago, sold it, and then became "second-time homebuyers." First-time homebuyers get a lot of attention — there are numerous articles and tips about being a first-time homebuyer. And I read a lot before buying my first house. But second-time homebuyers? There's little advice available. Here are a few things I wish I knew before buying a second house. (See also: What to Look for in a Fixer-Upper)

1. Buying a Second House Has More Than Twice the Costs

As a first-time homebuyer, you rarely see any money coming out of your pocket towards the actual costs of buying a home (aside from mortgage costs). When you're a first-time homebuyer, you bring a large check for your down payment, but other than those for the mortgage, there aren't a lot of costs. But, when you are selling your first home and buying your second home, you really see how the fees of house purchasing stack up. The biggest chunk is realtor fees. The seller almost always pays both agents' commissions — usually it's about 6% of the sales price. Plus you have all of the costs associated with the mortgage on your second home.

2. You May Not Have to Come Up With Cash

When you buy your first house, you may save for years to come up with a down payment. Then, when it comes to closing, your down payment comes straight from your bank account.

I clearly remember how nervous I was about carrying my cashier's check to the closing of my first house. But, if everything works out financially, your second house down payment should come from the proceeds of your first house. Your years of paying your mortgage or otherwise spending money to improve your house should enable you to have a down payment for your second house. Obviously, the housing crash changed this for many people, but if you purchased well before the bubble or after the crash, this is how it should work.

3. Finding a Second House Is Harder Than Finding a First House

Most first-time homebuyers don't know exactly what they want in a home. I didn't care if the house had a two-car garage, was in a good school district, or had a fireplace; there were only a few must-have items on my house checklist.

The criteria for my second house, however, was exhaustive.

After four years of homeownership I knew what projects I was willing to take on to improve a house, what features are costly to install, and what qualities were absolute musts. With such an extensive list, I was far pickier about the houses I looked at. It required a lot more work and took a lot more time to find our second house than it did the first. (However, because I knew exactly what I wanted, I looked at far fewer houses than the first time around.)

4. You'll Remember a Lot About the Home Buying Process...

Buying a second home is, in a way, easier than buying your first home because you've already been through the process once. When I bought my first house there was a lot I had to learn. I didn't know anything about finding a realtor, getting a mortgage, or attending a closing. All of these processes were brand new and required a lot of mental energy. When the second time came around, I already had at least a basic understanding of what to do next. This made the process less stressful and gave me more time to focus on other things.

5. ...But You Won't Remember Everything

As much as I did remember about buying a home, I certainly didn't remember everything. There are a lot of details that require re-learning (and a fair number of things can change in the real estate and mortgage world in just a few years). So, the realtor you use for your second house is just as important as your realtor was in buying your first home, because you'll still need to be walked through the details of the home buying process. It's critical that you can ask him/her any questions and that there is an open line of communication.

Have you recently taken stock and considered where you are in your housing process? If you've already purchased a home, what have you learned along the way?

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Guest's picture

I just bought my first house and it's nice to know others had similar experiences as I did. The process of buying a house was a lot more exhausting than I thought it'd be. In the beginning, I was fresh and excited to learn how buying a house actually works. It was interesting until the mortgage application. There were so many random things in my records I had to provide additional details and documented proof for. It got the point where I was thoroughly annoyed and just wanted the process to be over. So the biggest thing I learned was to mentally prepare for the crazy loan application process, and to only provide 1 bank account for the lender to question every deposit and withdrawal.

Guest's picture

Nearly every class I teach for first home buyers has a second home buyer enrolled. It seems that many of them relied on their partner to do much of the work and need a little extra help when they try to do it again on their own.

Guest's picture

Here in the Los Angeles area, home prices are skyrocketing - 25% in the last year, most of that in the last 6 months - and in the better areas they did not come down anywhere near as far as in many other places in the state. I sold my first house in Orange County, (about 25 miles from where I looked to buy in Los Angeles) last October, and quickly realized that even with a down payment of over $150,000 there was nothing worth buying that I could afford. If you're buying your second home in a different area from where your first one was located, be ready for price differences.

You're right on with #3, your criteria for your second house will be a much longer list. Fortunately, sticker shock pushed me into a different solution - build! Since I'm building my second home, all of my "must haves" are included.

Guest's picture

I was looking to move into my second home at the end of last year and searched for probably 6 months looking for homes. Couldn't find anything that met my specific criteria, so I decided to put it on the back burner and stay in my current house. Just having a few years of home ownership makes you think about so many little details that you never even considered. I have a huge list of must haves now, and since I don't need to move I feel pretty strong about not compromising.