Adventures in Home Improvement: Installing Vinyl Plank Flooring. Re-flooring our basement with “luxury vinyl” Drop & Done plank flooring turned out to be an easy, durable, and aesthetically pleasing solution.
Vinyl flooring has a bad rep. When most people hear “vinyl flooring,” they think of kitchen sheet vinyl circa 1991. Vinyl flooring has come a long way since the 80’s and 90’s kitchens we remember. Our adventure installing vinyl plank flooring in our basement went well and turned out better than we had originally envisioned.
The basement of our house was mostly covered in two different kinds of carpeting: white and stained carpet, and old, ugly wine-colored carpet. We decided when we bought the house that we would re-do the floors as soon as we could, and after successfully installing laminate wood flooring in our attic, we figured we’d do that again in the basement as soon as we had time and money.
When we were finally ready, a friend of ours who is a contractor took a look at our basement sub floor and recommended that we do vinyl instead. Our basement has a two inch wood sub floor “bump up” on top of the concrete foundation, and the sub floor is not as level as it should be in some areas. There is also the chance that future moisture issues (common in basements) could require us to pull up and repair the sub floor in the future. He said that if we did wood laminate flooring, we’d end up having to tear it all up again in a few years. Vinyl was more resilient, flexible, and often less expensive.
We looked at the scant selection of sheet vinyls at Lowe’s and Home Depot, which was disappointing. Most of the flooring at both big box stores was only sold online, so we couldn’t look at it in person. Not to mention that the employees there don’t know much about flooring and weren’t very helpful.
Our search finally led us to Great Floors, and the sales rep did an excellent job of selling us on one of their new products, XL Flooring Drop & Done vinyl plank flooring. To be honest, the product really sold itself. We were standing on a nice wood-look vinyl floor near the front entry to the store, and the sales rep bent down and pulled up one of the planks, then laid it back down again. There was no visual indication on the flooring that pulling up a plank would be possible. It still looked tight and finished.
The vinyl plank flooring is called “Drop & Done” flooring, because it is essentially just that–lay it on the floor, fit it together, and it’s installed. Adhesive is only required for the perimeters of the room, and after that it is installed using the “tight fit” method of fitting the planks together as tightly as possible.
The price of $3.49/square foot was a bit more than we had originally budgeted for, but the easy installation, variety of styles of beautiful wood-look planks, and the ability to tear it up in the future and lay it back down if we needed to make any sub floor repairs had us sold.
The first step in installing vinyl plank flooring in our basement was to remove the old carpet, tack strips, and all the little staples out of the sub flooring. Whoever installed the carpet was a bit overzealous with the staple gun, and Paddy repeatedly shouted out expletives while painstakingly prying up all of the staples. This was by and far the worst part.
**Tip: We highly recommend getting a pair of knee pads for installing vinyl plank flooring or any other type of flooring. You’re going to be spending a lot of time on your knees on a hard surface.
Once the sub floor was clean of staples and debris, we opted to start with the back room area of our basement. I read the instructions on the XL Flooring website. We had ordered one of their recommended pressure-sensitive vinyl flooring adhesives on Amazon (Home Depot and Lowe’s didn’t carry it). It said to spread the adhesive around the perimeter in a 6-9″ wide strip using a 3/32 x 3/32 U notch trowel or paint roller.
**Note: The XL Flooring company recommends that the room you are installing in be heated to room temperature at least 24 hours before and after installation. If you are installing in a room that you don’t heat regularly, be sure to bring it up to temperature the day before. The vinyl expands and contracts with temperature fluctuation, so temperature is important for proper fit during installation. You also want your flooring to be stored in the room you are going to install it in for 24 hours or more prior to installation, to give it time to acclimate to its new environment.
We opted for the trowel method. The U trowel they recommended was sold out at the hardware store, so we got a 1/8 V-notch trowel instead. We spread the adhesive around the perimeter of the room with the trowel, trying to keep it as thin and even as possible. Then we followed the instructions on the XL Flooring installation guide and waited 45 minutes for it to “flash off,” or dry to the point where it doesn’t transfer to your finger when touched.
While waiting for the adhesive to flash off/dry, XL Flooring suggested taking flooring planks out of the box and letting them adjust to being out of the packaging.
We waited 45 minutes, and then went back down to check on our adhesive. It was as wet as it was when I applied it. We decided to give it some more time, and watch videos about installing vinyl plank flooring in the meantime.
We came across this video on YouTube, which informed us that adhesive can take one to two hours to flash off. They used the paint roller method, and did a lot more floor prep than we did. They also had a handy-dandy vinyl plank cutter that made it look super easy. We didn’t have such a wonderful and magical contraption, we were going to go the utility knife route.
Two hours later, the adhesive was still wet. I came to the conclusion that I had applied it too thick, and scraped off excess adhesive with a clean, stiff piece of cardboard.
Another hour later, the adhesive was getting there but I had to resort to helping it along with a hair dryer. We decided that the paint roller method of adhesive application is the better way to go.
Finally, it was ready to go. We began laying the planks tight along the wall, cutting the last plank to size with the cut edge against the wall.
On the next row of planks, start at the same end that you finished on with the last row. This will help stagger the joints for more strength and a better appearance for the floor.
Even though the actual laying of the flooring was easier than laminate flooring that you have to click together in a single row and tap into place, the cutting with a utility knife ended up being pretty cumbersome. The last row was the most difficult, as Paddy had to cut the planks lengthwise to fit into the last narrow space.
Overall, the 8.5 ft x 11 ft room took three hours to complete. Paddy vowed that we needed to find a vinyl plank cutter like they had in the instructional video.
Not wanting to buy a tool that we would only want to use once, we went to the West Seattle Tool Library to see if they had one we could loan out. We brought a drop end of one of the planks with us to see what they might suggest.
The West Seattle Tool Library didn’t have a vinyl tile cutter, but they looked at our plank and said that we could just use a miter saw. We are a bit green when it comes to power tools, but we had invested in a miter saw a couple years back, and were happy to know that the planks were okay to use with it.
Installing vinyl plank flooring in the first room was a learning experience, and now we were a bit more prepared for the main part of our basement.
We bought a low-pile paint roll cover and rolled the adhesive in a much thinner application around the perimeter of the room. it was L-shaped, so we did an adhesive strip down the intersection of the room as well. The paint roller method was much easier and provided a much thinner and more even application of the adhesive.
We applied the adhesive a bit thicker around the fireplace edge of the sub floor, as there was no wall for it to press up against. We thought we would need to wait a couple hours again for it to flash off, but within an hour it was ready. The adhesive dries clear/yellowish, so you will start to see the white disappear as the adhesive dries to the point where it is ready to lay flooring on.
This time, with the saw set up, the process went a bit faster. It was still a lot of work. A lot of bending and squatting, getting up and down again. We were sorer at the end of the day than we expected.
Also, I know these photos are all of Paddy working, but I was helping too, I swear!
We ran into a couple tricky spots around the fireplace and door frames, but were able to cut a few funky pieces to fit with the utility knife.
Finally, we had a new floor. We are extremely happy with it.
**Note: XL Flooring recommends not putting any furniture back onto the new flooring for 24 hours after installation, to give the flooring time to adjust.
To add the finishing touch to our new floor floor, we bought a matching piece of Versatrim trim strip (also sold at Great Floors) to transition between the new vinyl plank flooring, and the sheet vinyl in the other part of our basement. It was fairly easy to install, just cut to size, screw the metal track into the floor, and snap the top trim piece into the track. Once you’re sure it’s snapped into the metal track, lightly pound it with a rubber mallet to secure.
With the main parts of our basement floor finished, we just had one last room to do: our storage room. We figured that we were pros by this point, and it would be a cinch.
Then we pulled up the carpet in the storage room and found the worst sub floor job ever.
There was a gap down the middle of the floor that someone had screwed random pieces of wood into, and one half of the floor was about 0.25″ lower than the other half of the floor.
We consulted the great Facebook hive mind, and floor leveling compound was suggested by a few friends.
The floor leveling compound was kind of like spackle for floors. We really didn’t know what we were doing, and we probably didn’t do the most professional job. But we filled in the gaps and created a sort of slope between the two different thicknesses of sub floor. The flooring compound dries FAST. The instructions said not to mix more than you can use in 15 minutes, but I’d almost say don’t mix more than you can use in 10 minutes. It wasn’t a very easy substance to work with.
We finished the storage room flooring, and there is still a part where there is a ridge that you can feel when you step on it. At this point, we decided that it was a low-traffic storage room and we just wanted to be done with it. Had this been a main room, we would have probably tried to fix the sub floor or level it out better. We were thankful that we went with flexible vinyl flooring as opposed to laminate, which is not flexible and requires a completely flat surface.
Overall we are super happy with our new floors and would absolutely recommend the XL Drop & Done vinyl plank flooring. It feels durable, comes with a lifetime guarantee (haven’t read the fine print on that yet), and was easier to install than laminate. It does come with a higher price tag, but it was worth it. Installing vinyl plank flooring is a good DIY home project. No need to hire someone.
Building a basement Tiki lounge: How we turned our drab basement into a retro tropical Polynesian retreat
I’ve always had a fascination and appreciation of Polynesian culture. I studied art and anthropology (including Pacific Island cultures) at the University of Hawaii Manoa on a year long program in college, and fell in love with Polynesia. We were fortunate enough to take our honeymoon in Tahiti and French Polynesia in 2010, and I’ve been itching to go back and explore more islands ever since.
When we decided to buy our first house last year, Paddy had a requirement that it needed to have a basement–with a bar. I was 100% in agreement, but it had to be a tiki lounge. We love the kitsch and retro nostalgia of the tiki bars of the 50’s and 60’s, when Hawaii’s statehood came to be and a booming post WWII economy allowed Americans to travel more. Polynesian culture and tropical exotica became all the rage, with restaurants such as Don the Beachcomber and Trader Vic’s in California starting a nation-wide trend of Mai Tais and Zombie cocktails, “exotica” music and tropical fashion.
As luck would have it, we got a house with a basement. A finished basement at that. It was a dream come true.
The quintessential item in a tiki lounge is a bar.
Scouting Craigslist, we came upon several retro bars for sale but the prices were either exorbitant or they sold so fast that we didn’t stand a chance. I finally found a bar for $200 that looked cool, but the photo was terrible. It was covered with stuff, and taken at a bad angle. It looked like it might be cool, or at least we could make it cool with some work. I noticed it had been on Craigslist for awhile, so I finally emailed the guy and offered him $100 for it. He told me he was selling items from a family estate far from where he lived, so he didn’t want to go there unless we were definitely going to buy it. We decided to go for it as long as I could get it in my truck, and settled on $150. It was an awesome bar, in an awesome basement that hadn’t been redecorated since the 1960’s. There was even a rotary dial phone on the wall in the laundry area. We had a hell of a time getting it out of their basement through the garage, and strapped it rather precariously into my truck with rope, but we did it and the vintage bar made it back to our basement.
We already had a couple of vintage bamboo bar stools that Paddy had acquired somewhere down the line, and we found a couple more rattan bar stools and a bamboo/rattan style futon on Craigslist as well, which we ordered a new tropical cover for and matching pillows. We had a lot of unpacking to do and other more pressing home projects, so we hung up our tiki bar paddle, a few vintage framed records from Hawaii and Rarotonga, and called it good until we had time and energy to deck it out.
About 9 months went by, and finally we were ready to start finishing our tiki lounge. I wanted to go all out.
First, I measured the back wall of the room and the wall area behind the bar, and ordered several rolls of Lauhala matting (woven grass mats) on ebay (I found the best price on 48″ x 96″ rolls there), and four rolls of 36″ x 72″ natural bamboo fencing from Home Depot. We screwed the Lauhala mats to the wall, cutting out a section around the window. I used a stud finder to find the wall studs on the wall behind the bar, and marked them on the crown molding with masking tape so that we could easily find them later when we installed the bar shelves.
The matting was hard to keep completely flat, so we struggled a bit with some bubbles that kept appearing when we were installing it. We got it about as flat as we could.
When cutting around the window, it was hard to keep a straight cut line. Fortunately, we planned on covering the window frame with bamboo, so my bad cutting job would be hidden eventually.
I had to cut out around an electrical panel next to the bar as well, and it didn’t look so awesome with the frayed grass mat edges. I got a roll of Lauhala ric rac on Etsy for $15.50 and used it to frame the edges around the electrical panel by gluing it with a hot glue gun. It looked much better and kept the cut grass from fraying any further. We did a border trim along the top of the matting on the wall as well, which gave it a more finished look.
Next, I ordered a 30″ x 96″ Mexican palm thatch runner from Forever Bamboo. We were trying to figure out how to create an overhang behind the bar that we could drape grass thatch over to give it that authentic tropical tiki lounge look. I drew up a plan of a frame we could construct and hang on the wall, but Paddy thought we could find something pre-made. I couldn’t find anything small and pre-made online. While we were pondering this conundrum, I remembered that there were some closet bars in a storage room in the basement installed by previous owners. It was perfect! I was stoked–we didn’t have to buy or build anything!
At first we thought that hanging the supports upside-down would be best to give the bar the sloped-overhang we originally pictured.
Unfortunately, while this looked cool, it would have been better on a very high ceiling. It covered up too much of the wall that we planned to use for bar shelves.
We put them right side up, which helped hold it up a lot better.
Next we un-rolled the fencing and propped it against the wall and then Paddy screwed it to the wall below the matting. We had one electrical outlet we had to cut bamboo out of, but fortunately it was very low on the wall and we only had to cut a couple pieces off at the bottom end of the second roll. Paddy was able to do this (carefully) with a small hand saw.
As luck would have it, we had a couple pieces extra on the end of the last fence roll, so Paddy cut the wire holding them on and took them off. We screwed them to the wall above the fence roll to create a border and a more finished look.
Next, we got some inexpensive brown shelves and supports from Home Depot and screwed them into the wall studs behind the bar in front of the matting. The top shelf still wasn’t very visible with the grass overhang, and it was bothering us. It was also hanging at about eye-level and was very annoying if you were behind the bar.
We remedied this by getting two thin pieces of tack board cut 18″ wide by 48″ long (our bar overhang was 96″ long), which Home Depot cut to size for us, and put it under the grass to give it a wider “shelf” to hang over. It worked perfectly.
After the bar was set up, we had to do something about the window frame and my bad matting cut-out job. I ordered a four-pack of 60″ long 5″ diameter split bamboo poles from Sunset Bamboo. Unfortunately they sent us full rounds, and it was a several week ordeal with a call tag and a reshipment to get the right items, with very poor customer service. We finally got the right product though.
Two of the 60″ lengths we were able to install over the window frame on the top and bottom without cutting, and the middle ones we cut to size with a chop saw. We put screws in the wall and the window frame and wired the bamboo poles on, so that they would be easy to take off if we ever wanted to.
We were finally ready to decorate. The best part.
We added some fun lights that we got from the party supply store below each shelf behind the bar–bouys and parrots. To illuminate the top shelf, we got the Dioder LED 4 piece light strip pack from Ikea for $29.99. You can daisy-chain them together like we did for behind a bar, or seperate them out into four segments to put inside book cases. It was an awesome purchase. You can choose from a rainbow of colors, or make the lights fade in and out of each color with a handy little control.
A guy in a nearby neighborhood had a “tiki sale” at his house where we picked up some vintage tiki mugs, a poster, a really cool vintage bamboo chair, and some postcards from Hawaii and Tahiti from the 1960’s. No tiki lounge is complete without tiki mugs.
I got red and orange paper lanterns and pendant lights from Paper Lantern Store which added some warm funky ambiance to the room. The lime green rotary dial phone in the photo below is the phone I grew up with–and I’m so glad I kept it. It sits proudly in our tiki lounge in all of it’s lime green glory.
Shortly before we moved, I found this tiger print chair sitting front and center on display at the Ballard, Seattle Goodwill. I had to have it. The Goodwill employee I had write a furniture sale tag up for me said there was a lady who told her she was coming back for it. But she didn’t pay for it. And I had cash and a truck. I win.
Paddy added a Ralph Steadman poster from Hunter S. Thompson’s Hawaii-based book The Curse of the Lono. He’s a big fan.
We found a pretty cool coconut lamp/chandelier in Mexico, and a preserved puffer fish at a nearby antique mall in Burien, WA. We got a tiki mask at Home Depot and some glass floats at Party Display and Costume.
I re-covered all the bar stools with Tommy Bahama fabric from Joann Fabrics so that they would match.
My last addition to the bar was a painting of a hula girl in the moonlight that I painted myself.
We would like to re-do the floors in wood laminate next year and get rid of the old carpeting, and get some tiki god side tables to replace the boring ones, but for now we’re going to call it good. We finished the tiki lounge just in time for a Forbidden Island party we threw and it was super fun.
One of the biggest elements of a great tiki lounge is kitsch. As years go by, I’m sure we will find all sorts of things to add to the bar in our international travels and wanderings through antique malls. Our tiki lounge will always be a work in progress.
Adventures in home improvement: Our adventure installing laminate flooring in our attic. It was easier than we expected, you just need the right tools.
Installing laminate flooring in our attic was the first real big DIY home improvement project we attempted after buying our house. Our friend Rick had done it before and offered to help us and lend us his saws (thanks Rick!). He is not a professional, and neither are we. I’m sure there are more professional details that we missed, but overall we are very happy with the result and feel empowered to do it again in our basement later this year.
**Note: This isn’t a professional “how-to” guide. We didn’t know what we were doing. Just a breakdown of how we did it and how it turned out.
Prior to starting, we measured our attic space to get a good guesstimate of square footage, and ordered our supplies from Home Depot. We ordered roughly 400 square feet of the TrafficMASTER Glenwood Oak laminate flooring at $0.68/sq ft, 400 square feet of foam underlay, and a laminate flooring installation kit for $17.98. Total for everything was just under $400.00.
The tool kit came with 50 wedge spacers, a plastic tapping block (we called it the tappy square), and a steel pull bar. In addition we ended up needing a hammer, sturdy flat head screwdriver, a box cutter, and a rubber mallet.
We also needed a chop saw for cutting the boards to length, and ended up needing Rick’s table saw as well to make cut outs in the boards for going around a banister and some other awkward protrusions.
Before we could get started however, we had to rip the existing carpet out. We let our boxes of flooring acclimate to our house climate for two weeks while we worked on preparing the attic.
We wanted to install a laminate wood floor in the attic because I planned on using it for my art studio, and the previous owners had a cat box up there and you could still smell it in the carpet. The nasty carpet had to go.
Paddy removed all the carpet and carpet pad with a box cutter-knife, cutting it into strips and rolling it up as he went. It didn’t take very long and we were able to load it all in my truck and dispose of it at the local dump.
I would definitely recommend using gloves for this and being careful with the sharp carpet tacking nailed around the edges.
Next, the super fun part: prying up the pokey carpet tacking and pulling all the staples out of the subflooring with a pair of pliers or a screwdriver. This was definitely the most obnoxious part of the job.
Finally, our subfloor was ready.
Next, we unrolled the foam underlay and cut it to fit the floor with a box cutter. The foam underlay is necessary because it provides extra sound proofing, extra cushioning under the floor for comfort, and in some cases it can act as a moisture barrier to protect the flooring. We ended up using exactly 300 square feet, and had one roll to spare. We’ll save it for when we do the basement.
We thought we would be able to install the flooring without removing the siding at the bottom edges of the walls, but we had to remove that too (this is what we needed the hammer and screwdriver for). We pried off all the siding and saved it to put back on when we were finished.
Once all the foam underlay was down, we were ready to start. We took two planks right out of the box, and then measured the remaining length of space and cut a plank to size. They are made to fit together tongue-and-groove style, so we could fit the three pieces together on end, and then lay it down flat as a single long row.
It is recommended to leave a tiny bit of space between the flooring and the wall for expansion. That is what the 50 plastic spacers are for that were included in our flooring kit, but we didn’t end up using them. It seemed that we were doing an okay job of leaving a tiny bit of space on the ends as we went.
On the next row, you want to have the shorter piece at the opposite end of the wall as the short piece in the first row, so that the seams are staggered. If you don’t stagger your seams, it won’t hold together properly. We alternated short lengths right and left per row as we went.
When cutting the shorter lengths, make sure you cut the correct end of the plank so that the tongue and groove will be on the side you are going to lock in with the other pieces, and the cut side will be against the wall. When cutting the shorter lengths with the chop saw, we also learned that you should always cut with the plank upside down, as the saw blade chews up the finish a bit on the side it cuts into.
Once we had the next row of planks fit together properly end-to-end, we tipped the entire row up and in to fit in with the groove on the previous row. Next, we needed to make sure the planks fit together tightly so that no seams were visible. This is where the tappy square and the steel pry bar comes in.
You hold the tapping square up to the edge of the flooring, and hit it with a hammer to hammer the plank tightly into place and close any gaps in the seams. No seam should be visible.
If a seam is on the end joint of the plank, you can use the steel pry bar to hook in between the end of the row and the wall, and then hit the curved part with the hammer to pull the plank into place.
Installing the rows was the easy part. The hardest part was when we needed to cut out an awkward shape. Rick needed to use the table saw for the precise cuts or cuts down the length of the plank. He was able to use the chop saw for a few of these, but the table saw was the better tool. If you don’t have a table saw or a friend who has one, you can rent one. Don’t forget to use eye protection.
I was kind of surprised at how fast it went. We did it over two days, but we could have knocked it out in one had we had time and energy to do so.
After it was all installed, I touched up the paint around the edges were the siding was, and then Paddy nailed it back on lower to line up with the flooring. This covers up the gaps around the edges left for expansion, and helps further secure the floor.
Overall, installing laminate flooring wasn’t so hard and we are super happy with our floor. We got a good coupon for our local hardware store and invested in a chop saw for when we get around to installing laminate flooring in our basement as well.
Low budget, hot market: our adventures as first time home buyers in a competitive market. How we finally got our first home, what we learned along the way, and our advice for other newbies to the real estate and mortgage circus.
We are now first time home buyers. I honestly don’t know how we did it, but somehow, we went from deciding to buy a house back in December to unlocking the door of our new home in August. I think luck had something to do with it, but following some sage advice from friends and family and our amazingly awesome realtor definitely played a big role.
Seattle has reached a near-crisis housing situation. With no rent control, skyrocketing rents, and thousands of people moving in from out of state for high paying jobs at tech companies like Amazon and Google, finding an affordable place to live in the city limits is becoming nearly impossible. Our neighborhood became too trendy and expensive, and when our landlord told us that she needed to raise the rent significantly, we had to figure out what to do. After weighing our options, we decided that if we were going to pay that much, it should be for a mortgage.
Seattle’s housing market wasn’t much better than the rental market. In fact, I’d say it is worse. Inventory is at an all time low, and bidding wars abound on almost every move-in-ready home. First time home buyers with financing contingencies and low budgets are competing with cash investors, making it very difficult to get an offer accepted. There wasn’t much of Seattle left in our budget, and prices were already on the rise. News stories of buyers waiving home inspections or shelling out $500-a-pop pre-inspections to get their offer accepted while also bidding well over list price were popping up at least once a month. One two bedroom, one bath 1,000 sq ft home in our neighborhood sold for $700K, which was $100K over appraisal value, cash offer. Our budget was just over a third of that price, leaving very little to choose from. On top of the prices on the rise, interest rates were predicted to rise by the end of the year as well. We were hopeful, but scared shitless.
But somehow, we got a house. And the address is in Seattle. (Technically it is unincorporated King County and recently annexed by Burien, but whatever. Our title and address say Seattle). After everything we’ve experienced, here is our twelve-step program for first time home buyers:
**Note: I am in no way an expert or in any position to give actual financial advice. This article is based on what we learned along the way, and our experience.
1. Check your credit, and fix it if need be
Step number one is probably the most important. You can’t buy a house without decent credit. Which means that if you have bad credit or no credit, your first time homebuyers dream may be a little further off than you thought (but still attainable!). Pull your credit report (free once a year at https://www.annualcreditreport.com/ ) and see how it looks. If there is anything on there that is incorrect, you’ll need to report it immediately. It’s good to check once a year regardless in case of identity theft. It does not hurt your credit score to check your own credit once a year.
If you have no credit, you’ll probably need to build some. Start with a low-limit credit card, buy groceries with it and pay it off each month. I won’t go into a huge amount of detail about credit advice, because there are plenty of better resources for that.
Fortunately, our credit was great so step 1 was already complete when we started.
**Also, you and whoever you are taking the mortgage out with will need to have been at your current jobs for at least two years at the time of pre-approval for a loan. Keep this in mind if you plan on changing jobs soon, you may have to wait a bit longer before you apply for a mortgage.
2. Figure out your budget
First of all, don’t be fooled by mortgage calculators on real estate websites. They usually assume you’re putting 20% down (If you have that much saved up, you rock and are way ahead of the game), but most first time homebuyers struggle to come up with the minimum down payment. You can usually manually adjust the amount you’re putting down on the calculators to the minimum 5% for conventional or 3.5% for FHA, but you will be paying property tax, homeowner’s insurance, and if you don’t have the 20% down–mortgage insurance. All that adds up to a lot more per month then the calculators will tell you. If you are buying a condo, you will be paying HOA (home owner’s association) dues on top of your monthly payment as well.
We didn’t end up getting our mortgage through our Washington credit union BECU, but we used their very detailed mortgage calculator to figure out what payment we can afford. It wasn’t exact, but it was pretty close and a really good estimator.
When you get pre-approved, you may qualify for more than you can comfortably afford because banks go on your gross income and debt-to-income ratio. We set our budget at less than what we qualified for because we didn’t want to be so strained that we wouldn’t have any room left for travel or going out to eat. What matters most is what payment you can afford. Figure out your budget, and work backwards from there to determine what home price you can afford. ALWAYS leave a couple hundred dollars at minimum in your monthly budget for car tab renewals, medical bills, birthdays, vet bills, etc. You don’t want to max out your budget down to the penny–something always comes up. Always. And don’t forget the future home repairs…
Once you figure out your budget, start looking on Redfin and Zillow to see which areas have houses in your budget. Start exploring those neighborhoods and figure out where you want to look. This can be a tough reality check sometimes, but you can only afford what you can afford.
3. Attend a first time home buyers class
A lot of people don’t go to first time home buyers‘ classes. We did, and it was very helpful. If you are a single parent or in a lower income bracket, many cities and states have first time home buyersdown payment assistance programs available based on your income and the number of people in your household. We went to one offered by HomeSight, a Seattle non-profit that offers this kind of assistance. We didn’t qualify for down payment assistance, but we learned a lot about the home buying process and stuff to consider. They also offer credit counselling services and other resources. It’s all free, you just have to pay for the credit check if you go with their assistance program to find a home. Other Seattle programs for first time home buyers can be found at http://www.seattle.gov/housing/renters/buy-a-home. It’s worth researching what is out there.
4. Get your down payment together
This was the biggest hurdle for us. We had done the ultra tight budget savings thing before for our wedding, and we are used to saving up for travel adventures. I’m a bit of a type A detailed planner person, so I got a spreadsheet together mapping out each pay period, our estimated pay checks, and our expenses to figure out how much leftover we could save each month. The market was hot and prices were on the rise, so we wanted to get a house ASAP while we still could.
Aside from the down payment, there are the closing costs. Everyone tells you to get the seller to pay the closing costs, but in a hot market–don’t count on it. We figured with our bonuses and savings we could come up with most of the down payment within 9 months, but when we saw the closing costs and pre-paids estimate from BECU’s calculator, it looked like we might have to come up with a a total that was over 20 grand to include closing costs. We also found out that for a conventional loan, we needed to have two months mortgage payments in savings at the time of closing, on top of everything else. I don’t know many people who can pull 20 grand out of their asses, and our families were in no position to help us (and we wouldn’t expect them to). Our hearts sank.
Then I found out that I could do a loan out of my 401K. A 401K loan is essentially borrowing money from yourself, and doesn’t involve a credit check. The payments are deducted right out of my paychecks with a 4.25% interest rate, and my 401K had a loan calculator that would let me plug in the length of time and amount I wanted to borrow to model the loan and see what the payments would be. If you have a 401K this can be a great option for help with a down payment. Read all the fine print though–some 401K plans require you to pay it all back at once if you leave your current job for any reason. Mine allows continued payments if I change jobs, fortunately. Also, make sure you are clear with your lender that this will be part of your down payment, as they will have to add the new payments into your debt to income ratio and track where all your money is coming from.
Paddy’s 401K let him do either a loan or an early withdrawal. Now, normally I would advise strongly against an early 401K withdrawal, but since this was for an investment that is estimated to appreciate as Seattle continues to grow at a rapid rate, we decided it was worth paying the 10% penalty. We took out the maximum allowed amount of $7,000, which after taxes and the 10% penalty gave us $4,500. So we combined the 401K withdrawal with our 8 months of savings, and took the rest as a loan out of my 401K.
We were only comfortable with borrowing so much out of my 401K and therefore taking on new debt, so this pretty much only got us the down payment and first two months mortgage payments required to be in savings at closing. I mapped out a savings plan through winter and tax return time, and figured we could come up with additional savings for the closing costs by then. Once we had our down payment together though, we decided to get pre-approved and start looking—there’s no guarantee that the seller will pay closing costs, but it’s always worth a shot. If not, we’d keep saving and hopefully have enough to cover it by early spring. We saved our asses off.
5. Get pre-approved
Don’t even start looking for a house until you have your down payment together AND are pre-approved. Don’t waste your poor real estate agent’s time and your time, you’ll just get excited only to be let down. (This doesn’t mean you can’t obsessively look at listings 700 times a day on Redfin like I did. It’s torture but it will give you a good idea of how long houses take to sell and what they are going for in the neighborhoods you want to look in). When you look at a house in a hot market, you have to be ready to make an offer NOW. And by NOW I mean walk out the door of the house and go straight to your agent’s office to write up the offer.
The first step is to find a lender. We got a recommendation from our realtor for her favorite loan officer at HomeStreet Bank, but there are lots of options. Talk to your home-owner friends and see who they went with and why. If you already have a real estate agent, he or she might have some recommendations as well. We went with our realtor’s recommendation over our credit union because our realtor said that she’s dealt with our credit union on client home financing before, and they can be slow at responding to everything during the loan process. As first time home buyers in a hot market, we didn’t want a slow lender screwing up our deal.
What you’ll need:
Next, you’re going to have to come up with everything except your blood type to send to your lender. This usually includes your last 2-3 years tax returns and W-2s, recent bank statements, 401K statements, 2-3 months of recent pay stubs, copies of your drivers’ licenses and social security cards, employer info, landlord info, and any documentation on a 401K loan or withdrawal you may be making for the down payment. Any cash deposits on your bank statement will be questioned, so try not to deposit any large amounts of cash (from selling your stuff at a garage sale, for example) until after you buy the house.
6. Choose a type of mortgage
What type of mortgage?
Lastly, what loan are you going to apply for? For first time home buyers, the attractive option at first is the FHA loan with the lower interest rate requiring only 3.5% down. At first we thought this was the one for us, but we went with the 5% down 30 year conventional.
Here’s why we went with the conventional mortgage:
* While the conventional mortgage requires more money up front and two months’ mortgage payments in your bank account at closing, the FHA mortgage includes mortgage insurance for the life of the loan. There is mortgage insurance on the conventional mortgage as well if you don’t have the 20% down payment, but it falls off after you have paid down 20% of the principal, which is about 9 years. (The mortgage insurance is for your lender–not you–in the event that you default on the loan. Yes, it totally sucks).
* To get rid of your mortgage insurance earlier than the 9 years they predict it will take to pay down 20%, you can get a new appraisal if your property value has increased and get them to take it off early. I’m not entirely sure about how this process works, but it doesn’t involve a refinance. FHA loans require a refinance to get rid of mortgage insurance, which involves refinancing your loan to a new interest rate (currently predicted to rise), and paying closing costs all over again. No thanks.
* FHA loans have lots of stipulations on the condition of the house. You can’t have peeling paint on the exterior, for example. If the house requires a new roof or other major repairs, your lender might require the seller to take care of these prior to closing. Having an FHA loan as your financing contingency could make your offer a little less attractive to the seller than a conventional loan.
The major advantage of FHA loans aside from the lower down payment and lower interest rate is that they are the only home loan type that allows your family to gift you all or part of your down payment. If you have a generous Aunt Opal or parents with deep pockets who want to help, the FHA loan might be the choice for you.
Renovation loan? Like on Property Brothers?
Because the market was so crazy and our budget so low, we noticed that sometimes fixer uppers sit on the market a little longer. They either make people without means or desire to do renovations hesitate, or they are swooped in on and purchased right away by a cash investor to be fixed up and flipped. We wondered how the people on Property Brothers get the money to renovate the fixer upper on that show. The bank won’t loan more than the house is worth, so how are these people getting the money to fiance these renovations?
There are two ways, and I had to do a lot of research to find out about them–banks don’t seem to advertise them that much.
The first options are the FHA 203 K and FHA 203 K Streamline mortgage renovation loan. Both offer renovation money along with a mortgage. The 203K streamline is for renovations that aren’t structural–such as bathroom and kitchen updates, floors, paint, etc up to $35K. Our realtor just did one of these recently and she said it was a nightmare, but they got everything through and it all turned out well.
The other option is the Fannie Mae HomeStyle renovation mortgage, which is for conventional loans. There are less stipulations with this one because it is not FHA. We opted to get pre-approved for the HomeStyle renovation loan, and our lender had another associate at the branch to refer us to who specialized in these type of mortgages.
To our shock and disbelief, we found a move-in ready house within our budget, so we didn’t go this route. Our lender said that we were approved for “worst case scenario” if we found a house we loved under our budget, but it needed repairs right away that we couldn’t afford. If you are willing to go through a lot of paperwork and renovations and want to get pre-approved for one of these loans, I’d recommend making sure that your lender has a specialist for rehab mortgages because there is a lot involved. It’s a slightly higher interest rate and a lot of work, but it probably would have been worth it if we needed it. When we didn’t end up needing it, we were transferred back to the standard mortgage loan officer and continued from there easy peasy.
7. Find a reputable real estate agent
We were lucky because we already had a great agent who we’d known personally for a long time. She was a friend of a friend, and had helped a couple of our other friends buy their first homes as well. She gave us tons of great advice, was on top of everything right away, and made the whole process very smooth.
Talk to your friends who have bought houses in the area and find out who they used and if they would recommend their agents. Having someone experienced is key, especially for first time home buyers. A friend of mine who was also looking for a house in Seattle within our same budget told me she felt like she and her husband were “small potatoes” in Seattle’s pricey market and that they didn’t think many experienced real estate agents would want to bother with them. I stopped her short and told her that this is the biggest purchase she would make in her life and that they should expect nothing less than respect and hard work from any agent that they work with. If they have an agent who is treating them like “small potatoes”– it’s time to find a new agent. They ended up using the same realtor we did, and she helped them overcome several obstacles along the way, showed them countless houses, and finally found them the perfect home. They said that their two year old now thinks that our mutual realtor is part of their family.
If you are in Seattle and need a real estate agent recommendation, let us know!
8. Start looking
This is when shit gets real. Again, don’t even start looking until you have your pre-approval and down payment. It’s a waste of time and will only lead to let-down.
Make a wants vs. needs list for the home or condo you are looking for and give it to you realtor. Go over the needs list one more time–there might be some things you think you need, but might be willing to compromise on if everything else about the house is perfect. Finding something with a second half bath can be a challenge on a tight budget, for example. You don’t want to weed out the majority of the inventory when something else might be otherwise perfect.
By now you’ve probably obsessively looked at houses on Redfin and Zillow for awhile and narrowed down the neighborhoods within your budget. Keep looking online and keep the Redfin and Zillow apps on your phone. You can sign up for email notifications with Redfin for when things go on the market in your budget and desired area. If you see something that goes on the market that looks like a possibility, send it to your realtor immediately. You’ll want to get in and view it right away, in a hot market there may be offers by tomorrow.
If you are on a low budget, you are going to be looking at some very interesting houses. One friend of mine told us she and her husband looked at a house that had twenty empty barrel drums of soy sauce in the basement. She said that no new paint or flooring could ever get the smell of Asian food out of that house. Another friend of ours was being shown a house with a basement door that was locked from the inside. Her agent had a tool box with him, and took the door off the hinges to show them the basement. They walked down to find a group of people squatting in the basement, and the basement bathtub completely full of human feces. We toured a house with sloping floors, mold in the basement, and a yard completely full of junk. Another friend of ours was shown a home built for little people, as a testament to what she could get for her money in the higher priced neighborhood that she was hoping for. The friend of ours who witnessed the basement bathtub full of shit said that after looking at tons of houses and being outbid on four offers she begged her husband in desperation to buy a house where the ceiling was so short in the bedroom that he couldn’t stand up all the way. (Fortunately, he said no and they finally found the right house).
While all of the houses described above are nightmares, all of our first time homebuyer friends finally found the right house. Almost all of them were happy that they didn’t get the ones they were outbid on, because the best one was the one they ended up with. The one piece of advice I have for you is that if you are first time homebuyers on a low budget, you’re also going to need an open mind. Don’t pay attention to 70’s wood paneling, nasty carpet, bad paint, or the belongings of hoarders. You’re going to need to look past that. Pay attention to the condition of the roof, windows, electrical panel, furnace, floors (do they slope? any questionable spots?), musty smells, plumbing, etc. A good real estate agent will know what to look for and point out what really needs work. Carpet and paint are the easiest things to fix, and that groovy 1970’s sunset mural can easily be taken down.
9. Make an offer
In a hot market, you might not be able to spend time exploring the neighborhood at different times of the day and night, practicing your new commute, etc like everyone recommends. That’s because 6 other offers are coming in and it’s only been on the market 36 hours. You have to act now.
The first house we put an offer in on went on the market on a Friday afternoon. I sent it to our realtor and she got us in to look at it on Sunday. There were already other people looking at it when we showed up, and by Sunday night our realtor told us that there were already 20 offers and many had waived the inspection. That was our welcome to the Seattle housing market. We weren’t very surprised, however. Two of our friends had been looking for several months already and had been outbid several times.
Your agent will guide you through the whole offer process and write it up for you. Many people choose to waive the home inspection contingency, which I don’t recommend. The home inspection contingency in an offer means that if the offer is accepted, and then you find something horrific in the home inspection you can ask them to fix it and back out if they don’t. This of course makes your offer less attractive to a seller if you are in a multiple offer situation, but personally I think waiving it is way too big of a risk. You don’t want to find out that it needs a whole new sewer line or that the foundation is in really bad shape after the deal is done.
Other people do inspections prior to making an offer so that they can waive the contingency with peace of mind. Inspections average about $400-$600 each, and it was difficult enough for us to scrape together our down payment so paying for an inspection on a house we may not get wasn’t an option. Our realtor had an inspector she knew who would do a pre-inspection at half price, you just didn’t get the full inspection report until you paid the other half. You could do the whole inspection with him and have him show you things and get the verbal lowdown, and then if you got the house you could pay the rest and get the full report.
Something you can do to make your offer more competitive is put in an escalation clause into your offer, that says that you will bid a certain amount over the highest offer up to a certain amount. It’s kind of like ebay–you choose where you cap off your offer at but you can start at list price.
Many sellers are going to choose the highest and best offer (best meaning few or no contingencies), but sometimes you can appeal to a seller’s emotions about their house. I think this can be helpful if the seller is a couple who has lived in the house for years, raised a family there, and has a lot of sentimental attachment to it. Your agent can often find out the background of the seller’s situation and home history from their listing agent to get an inside scoop. You can appeal to them by including a cover letter gushing about how much you love their house and want to make it your forever home. This worked for a couple friends of ours. It was kind of a horrible story–the seller was an older couple who had cared for the home for years, but it was time to downsize. The house was in great shape, and they asked their listing agent what she recommend doing to it before putting it on the market. The listing agent told them just to mow the lawn and it would be ready to go. The husband went out to mow the lawn, and while mowing had a heart attack AND DIED. Needless to say, the wife was very distraught and emotional. When our friends wrote a letter telling her how they wanted to make it their forever home with their two kids and not change a thing because they loved the home as is, the seller chose them. Awful story, but a happy ending for our friends, who had already been outbid 5 times.
As part of your offer, you will also be asked to put up a portion of your down payment as “earnest money.” This goes to your real estate agency to be held, and your check is cashed when the offer is accepted. Earnest money means that you are “in earnest” to purchase the home, and if you back out of the deal after signing the offer (not including the home inspection contingency or financing contingency you probably put in), then you lose the money and the seller keeps it. Our realtor said she’s only seen someone lose their earnest money twice–once was a divorce after the sale was underway, and the other was because the buyer disappeared and they couldn’t find him, turned out the guy went to jail for fraud. When the sale goes through, the earnest money goes towards your down payment.
We got our house on our second offer. The house was overpriced, and had been on the market two months. It had a few aspects that probably turned off families with kids–small yard, only two legal bedrooms, steep driveway and a busy street. Everything else was great though, and it was over twice the size of our 840 square foot rental house. When the seller lowered the price, we looked at it and made an offer right away. Sometimes if a house is for sale too long in a hot market, people start to think something is wrong with it. In this case, it worked out well for us.
**Note: While your offer is pending, don’t buy anything on credit or do anything to negatively change your credit score or debt to income ratio. The bank will re-run everything right before closing, and if there is a big change to your credit (like buying a car, buying furniture on a credit plan, etc) it could kill the deal.
10. Get a home inspection
Whether you get a pre-inspection to waive the contingency on your offer, or an inspection as a contingency, make sure you do it. Everything our inspector found was mostly minor, but things we may not have noticed and now we know we need to take care of. We’re first time home buyers, and we are just now learning about home maintenance.
A friend of ours had an inspector come out for a house she and her husband were about to buy, and apparently something was so wrong with the house that the inspector told them that if they turned around and walked away from the house right now without looking back, he wouldn’t charge them for the inspection, as long as they called him for the next one. I don’t know what was wrong, but they were very thankful he saved them from a potential money pit. Get your inspection.
We also got a sewer scope inspection, as recommended by our realtor. I would recommend it as well. It’s around $200, and the sewer scope guy puts a camera on a long line down your sewer pipe and makes a DVD of it for you. The camera checks to make sure that the sewer line is in good shape and doesn’t have any potential blockers like roots growing into it. Replacing a sewer line can be REALLY expensive, especially if you have to dig up and re-pave the road in front of your house. We looked at another house that was pretty nice, but the previous buyer had backed out after a sewer scope had revealed tree roots growing through the sewer line. Our sewer line had been replaced to partway down the driveway in the last year, and had a few roots starting to grow in it, but the sewer guy told us that some herbicide flushed down the toilet once a year should keep them at bay. He also gave us a packet of microwave popcorn to go along with our DVD of our sewer pipe. Nice touch.
We had an inspection contingency in our offer, which meant that if the inspector found something that was a deal breaker for us, we could either ask the seller to fix it, reduce the price, or we could back out of the offer altogether and get our earnest money back. Most everything the inspector found was minor exterior work, and the roof, furnace, and electrical all seemed up to par. We asked the seller to service the furnace, install carbon monoxide detectors as required by law, and lowered the sale price by $2,500. He agreed.
11. Get quotes on homeowners insurance
You’ll be required by your lender to have homeowners/hazard insurance (which you will want anyway) but you can choose who you want to go with. We put out a facebook post to our homeowner friends for recommendations (or warnings) on specific companies. Turns out Paddy’s friend from high school’s wife’s brother was an insurance broker, and we went with his local agency. We chose the insurance he got the best quote on and recommended. This is also a good time to get a new quote on car insurance. If you combine homeowners and car insurance with the same company, you can often get a discount. We switched car insurance as well. We didn’t go with the same company, but our new insurance broker got us a slightly better deal with a different car insurance company.
Once you have a quote you are happy with, forward it to your lender and they will set it up directly for you, and the premium will be part of your monthly payment to the lender.
12. Appraisal, escrow, closing
Different states do things differently, so our experience with closing might be different from yours. Our bank scheduled the appraisal, and our realtor met the appraiser at the house for us. The appraisal isn’t nearly as detailed as the home inspection, it will probably only take about 30 minutes. The appraiser sends their home value estimate to the bank for approval, and as long as it appraises for what you are paying and there are no major repairs–everything should be fine. If you are on an FHA loan, the bank might require more repairs to done by the seller before the loan closes–peeling paint, new roof if it is towards the end of its life, etc. The bank could also require this for conventional loans as well, but there are fewer stipulations on conventional loans. If the appraisal comes back lower than your loan total, or there are repairs required before closing, then you’ll be back in negotiation with the seller. If the seller won’t negotiate, you might be out of luck.
Fortunately, our appraisal was fine and everything went smoothly. Our lender and realtor advised not to give our landlord notice until the appraisal was approved, just in case.
Next, your lender sends everything to an escrow company for final processing. They will contact you to set a signing date and give you the final payment due for your down payment and any closing costs you owe. You can either wire the funds to them or bring a cashiers check to the signing. We were able to have an escrow agent come to our house after hours for no extra charge. Signing in Washington happens a few days before closing. After we signed a pile of papers (and a few they forgot and emailed to us the next morning), we waited for the closing day. Once our record was released, the house became ours and our realtor was able to drop off our key.
Overall, we feel very fortunate to have had such a smooth experience as first time home buyers. It’s a tough market in Seattle with very low inventory. A couple of our friends are still looking for a condo and are on their 8th outbid. We just moved in last weekend, and now we are living amid stacks of boxes and unfinished projects, getting quotes on things like gutters and fences. Our cat is slowly getting over his fear of the basement. My Dad is slowly getting over having to pick up the contents of my lingerie drawer that exploded out of the moving truck into our driveway. I’d be lying if I told you we aren’t nervous–you never know what might need fixing at any moment. That’s why it’s important to have some savings for those unexpected repairs. If you are thinking about becoming first time home buyers as well, we wish you the best of luck.