How to buy a house
Last month, I bought a house.
Buying a house is more complicated than nearly anything else I've done – besides, perhaps, running a business.
Over the last few weeks, I’ve highlighted some of my most popular articles from the last two years. In doing so, I realized that many of my personal favorites are those I reference repeatedly; they’re evergreen.
But over the course of the eight months leading up to the purchase, I learned a lot. So today I’m sharing the article I wish I’d been able to read when I started.
This is not an argument for or against buying a house. If you want to be talked out of buying a house, read Ramit Sethi. If you want to hear reasons to buy a house, ask a Boomer.
Instead, this is what I wish I’d known about house buying when we got started back in February.
I’ve seen a lot of backward industries:
- I’ve worked in large non-profit arts organizations.
- I’ve worked within family-owned SMBs.
- I had a chef throw a plate at my head in a restaurant.
- I’ve worked in fast-paced, drama-filled tech companies.
- I’ve obtained a myriad of impossible-to-get permits at Robin’s Cafe. San Francisco doesn’t make brick-and-mortar permits easy.
So believe me when I say that I’ve never met as backward, corrupt, and intentionally complicated an industry as real estate. First, let’s define some terms.
The people you’ll meet:
- Buyer – That’s you!
- Seller – The current owner of a property.
- Agent – Agents work for either the seller or the buyer – but actually they work for themselves. Their goal is to get you to buy or sell a house, and serve as a liaison between you (the buyer), the seller’s agent, and the seller. Agents aren’t financially motivated to help you get the best deal because their commission is a percentage of the price of your house. A small price reduction barely affects their fee, even though it matters a lot to you. You are not legally required to have an agent in most states.
- Mortgage broker – These folks help find your mortgage – assuming you aren’t paying all cash. They’re very salesy and eventually sell your mortgage to someone else. The benefit is that they’re available all hours and can get you information very quickly.
The companies you’ll work with:
- Real estate brokerage – Agents work within brokerages, and split income, usually 50/50, with an agent. Brokerages also list houses for sale. There are small, boutique brokerages and also national chains like Compass and Coldwell Banker.
- Mortgage company – The company that ultimately holds your mortgage. If you get a mortgage with a specific bank or credit union, they’re not likely to sell your mortgage to a third party.
- Title company – The company that ensures successful transfer of ownership between the buyer and seller.
The terms you’ll hear:
- Buyer’s agent vs. listing agent – Typically, the Buyer and Seller each have an agent, and agents discourage you from communicating directly with the other party because it keeps them as the middleman.
- Pre-approval vs. pre-qualification – These are terms you’ll hear from your mortgage broker, and represent whether you are qualified for a mortgage. Pre-qual is a soft estimate of how much you’ll be able to borrow. Pre-approval is documented and stronger.
- Foreclosure – When a bank is selling the property, instead of a person. Not for the faint of heart.
- In contract – An agreement between buyer and seller that the buyer will purchase the real estate, assuming specific conditions are met
- Earnest money – Money you put down (usually 3%) to show proof that you are serious about buying a specific property
- Contingencies – The requirements that need to be met before you buy.
Our adventure started in February of 2025. My then-girlfriend and I were planning on renting, when – seemingly out of the blue – she texted me a house for sale. A house we saw that weekend – a dilapidated mansion with spectacular views – became the focus for my learning for the next five months.
The mansion had a lot going for it – great views, extremely quiet, an abundance of indoor and outdoor space, pool, garden, easy rental opportunities, and more.
It was also a completely ridiculous project. It had been a party house, built in the 1970s and then illegally rebuilt, which, we later learned, triggered county requirements like seismic retrofitting and a sprinkler system. There were three levels of decks with incredible views, but they had been poorly built and were on the verge of collapsing. We discovered two nests of bees in the walls – so active in the spring that the buzzing could be heard inside the house!
After five months of research and seven offers on the property, we walked away. More than the repair and reconstruction required, we walked away because of the county requirements. The onus on a new owner to make up for the previous decades of illegal construction was too high.
We bought another house in the same city, which also has views, a pool, and rental opportunities. Our new house isn’t a mansion, and needs only modest repairs – and we’re very happy here. But I learned more about real estate during this months-long sprint than I ever thought possible.
These are some of my biggest takeaways.
Mindset
1. Don’t fall in love until after you buy
It's really helpful if you don't fall in love with a single property until after you own it. This is the single biggest purchase most people will ever make, and the decision is usually made emotionally. Instead, try not to get too excited until after you've purchased. Obviously, you don't want regret. Make sure you like the house you’re about to buy! But too often people fall in love and then get into a bidding war out of the desire to win a deal.
2. An entrepreneur’s mindset
The thing that helped me the most through my real estate learning journey was what I'll call an entrepreneur's mindset.
We wanted a home, yes. But I also didn’t want to lose money on a project – if anything, I wanted to make money.
Know how to protect your downside and plan for contingencies in case things go wrong.
If your circumstances change and you can no longer afford your mortgage, what are you going to do? What are the ways this property could cash flow, even if you weren’t living in it? Are there cosmetic repairs you could make that would improve the value of your home?
3. They treat you like the product, but actually you have all the power
I'm fascinated by how different industries talk about their customers. At Robin’s Cafe, we had diners. At Zander Media, we have clients. At Responsive Conference, we have attendees. Facebook, OpenAI and most software companies have “users” – which is the same term that drug dealers use to describe their customers.
In real estate, agents call real estate “inventory” and us, the clients, are called “buyers.”
There's a sense as you begin to get serious about a property that you are a cog in the machine. Agents will push you to bid on a specific property. Mortgage brokers request that you sign before you're ready.
The most important thing to remember is that you hold all the power. As the buyer, you can walk away at any time. (Though if you wait too long and contingencies are past, you stand the risk of losing your earnest money.)
You always have the power to walk away.
Research
4. Know what you want
We had lots of criteria starting out:
- We wanted a house that was not too far from San Francisco
- That was safe
- And that we could afford
- We wanted within walking distance from an interesting town
- Ideally we wanted open space nearby
- The house should have rental opportunities
- And best case scenario for it to have a pool
- Weirdly, we both had a thing for double front doors just because that felt fancy
However big or small, list out the criteria you want in a house. You’ll have to settle on some of them, but the clearer you can be on what you want, the more likely you are to get it.
5. See lots of houses
The best way to learn about houses is to see lots of houses. Agents are great for this – but don’t commit to working with one agent for a long time, or maybe ever. You can call the listing agent – the person who is showing the house – and ask to see it. I prefer not going to Open Houses because there are other people and a (false) sense of urgency. Even driving by houses for sale is useful to get a sense of regions and neighborhoods
6. Do your research
In this industry more than anything else I've ever experienced, it's essential to do the research. The more thoroughly you get to know a specific region, neighborhood, and even a specific street, before you decide which house to buy, the better off you’ll be. Use ChatGPT to do Deep Research on a variety of topics related to things you see in each house you visit. Ask real estate agents a lot of questions. Talk to people on the street.
7. Get lots of (free) quotes
I’m surprised that home buyers don’t visit homes they are seriously considering with an entourage of contractors, plumbers and electricians.
There are two different types of quotes – those you pay for and those you don’t. If you call a local HVAC company and request a pre-sale quote, they’ll charge you. But, instead, if you say that you are planning to buy this house and just want to plan for your future, they’ll likely come to the house, look around, and send you an estimate of costs.
A lot of the difference depends on whether they write up a multi-page summary of their findings or just a single page with a price. Either one works fine when it comes to negotiating down the price of the house.
But even if you did have to pay for every technician at every house you’re considering, those few hundred dollars would save you tens of thousands in having avoided bad decisions.
8. Talk to the city or county
One of the most under-leveraged aspects of real estate is talking to your local jurisdiction - the city or county within which your property falls. Even just the question “What’s this city/county like to work with?” which any agent or contractor should be able to answer, will help inform your decision about the amount of work you’re willing to tackle and the amount of bureaucracy you are willing to wade through.
The county where the mansion sits is quite a bit easier to work with than the city within which we now reside. But since our new house requires so much less renovation, we decided that trade-off was worth it.
Moreover, the city or county will have some amount of records about the property in their files and some people within the city/county may even be familiar with the property itself.
Talk to your local jurisdiction before you buy!
9. Read the fine print
I'm continually shocked that most people don't read every bit of fine print in every document. The very first real estate agent who showed us a house requested that I sign an exclusive agreement with him even in order for him to show us the property. Had I not read the contract in advance, we would have been stuck with him without recourse.
The title company who transferred ownership of our new house from the previous owner to us was surprised that I requested the 250 pages of legal documentation in advance of the day of signing. And that we protested that they had only given us one hour to review the documents in person.
Is reading fine print and intentionally obscure legal language a difficult question? Yes, of course it is. And as you go into a hundred thousand dollar project, it is also a necessity.
Never, ever sign without reading the fine print.
Cautions
10. Everyone has something to teach you
Real estate, especially when you're just starting out, is a matter of talking to a thousand people. And everybody has something to teach you.
In the last seven months, I've been on the roof of ten properties with at least a dozen different roofers. Every time I go up, I learn something new about roofs from a casual comment the roofer makes.
Talking to an abundance of people, even if you only learn one new thing from each, will enable you to make better decisions going forward.
11. A false sense of urgency
As with most forms of unethical selling, everyone will try to create for you a false sense of urgency. Agents will tell you to bid now. Mortgage bankers will tell you you have to sign today, or else deadlines won’t be met.
And it is true, especially in a competitive real estate market where time matters. But it rarely matters as much as the people you're working with will have you believe.
Don't get swept up in the adrenaline of the rush and lose sight that you are considering among the biggest purchases of your life.
12. Agents are out to get you
There are a lot of good people in the trades. But it has been my experience (and is widely agreed) that people who make their living in real estate – agents, brokers, mortgage brokers, etc. – are out to get you.
But of all of these, real estate agents are my least favorite.
I'm reminded of the Charlie Munger quote, "Show me the incentive and I'll show you the outcome." The money circulating around real estate is large. Most of us don’t otherwise handle transactions in the 100s of thousands of dollars. And when someone is compensated purely on a percentage basis of the cost of the home, their incentives are – at best – only loosely aligned with yours.
It’s hard, but not impossible, to buy houses in the United States without an agent. And how to choose an agent – or avoid getting one – is a longer topic than this article will allow. But know, going in, that “your agent” is not on your team.
13. Read How to Buy a Used Car (and then do that for houses)
Last week, I revisited my article, "How to Buy a Used Car." There are a lot of similarities between buying a used car and buying a house.
14. Read Abundance (and know that’s not the world we live in)
Ezra Klein’s Abundance is a hopeful picture of what the world might look like if we were to build in the United States. And it isn’t the world we live in.
Instead we live in a world where the accelerated rate of change exists in stark contrast to the slow tedium of hundreds of years of bureaucratic process. Even as technology enables us to move and think faster than ever before in human history, the lethargy of governmental bureaucracy stagnates growth.
That’s how it is right now – unfortunately. Plan accordingly.
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Conclusion
I’m thrilled with our new home, and the sensation of being a first-time home buyer. But perhaps even more importantly, I’m no longer overwhelmed by an industry that previously felt impenetrable, overwhelming, and ridiculously complex. Hopefully this article is a first step for you to achieve the same.
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3 things I’ve loved this week
Quote I’m considering
"Show me the incentive and I'll show you the outcome." - Charlie Munger
Book I’m revisiting
Abundance by Derek Thompson and Ezra Klein
I read Eza Klein’s new book Abundance in the spring, but have referenced it enough throughout the course of our home buying adventure that I picked it back up to re-read. The book is a mix of hopeful about “a future that builds” and realistic about the ways we don’t do that now.
Tool I’m using
Speedo Unisex-Adult Swim Training Pull Buoy
I taught myself how to swim in my twenties. Since, I’ve taught perhaps half a dozen people how to improve their technique. The most useful tool is always this Swim Training Pull Buoy.
Swimming is hard because you’re trying to do too many things at once – use your arms, use your legs, breath, and all the while not freak out and drown.
Having a floating buoy between your legs allows you to focus on your upper body alone, improve technique, and get more comfortable in the water.
Now that I have a pool, I also have a swim training buoy.
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When you're ready, here's how I can help
I've begun teaching a cohort-driven course about sales. This is a new approach to selling for people who aren't quite comfortable - yet. If you're interested, join the waitlist here.
Everyone has a story. At Zander Media, we help startups and global brands clarify their message and make videos that change people.
Responsive: What It Takes to Create a Thriving Organization is a book for any startup founder or enterprise change lead who wants to improve their organization. And if you want to learn to do a handstand, check out How to Do a Handstand.
Responsive Conference is an annual summit that brings together 300 executives, founders, and entrepreneurs who want to make work better. Join us this September and equip your team to respond to change!
Until next week,
Robin
