Like any process, buying a home involves a series of steps. When the steps are taken in a logical order, the process moves quickly and it’s less confusing.
Take these steps out of order and you may run into trouble. It’s a bit like algebra: follow the PEMDAS formula and you’ll get the right answer. Mess with the formula and who knows what you’ll come up with?
1. Find out how much you can afford to spend on a home
It astounds me how many folks start looking at houses before they know how much they can spend on a home.
This involves more than the amount the lender has pre-approved. Find a mortgage payment that fits your budget and use that as a ceiling on price when you’re shopping for a home.
Finding a lender to help you determine how much you can afford every month getting you pre-approved for a mortgage is the first and most important step in the process.
2. Decide which features you want vs need
Once you’ve seen a lender and know for certain how much you can afford to spend on a home, it’s a good idea to make a list of items that you just can’t live without.
Add to the list the features that you can live without but it sure would be nice to have them. And, naturally, which features would be an absolute deal-breaker.
This list is important to share with your real estate agent and to keep with you when you house hunt.
3. Find a real estate agent
House hunting is just so much easier with a good real estate agent in your corner.
Not only does it save you time you would otherwise spend poring over websites full of listings, we typically know of homes that will be coming available long before the general public does.
Best of all, our services are free to you. Please add us to your list of agents to interview.
4. Look into neighborhoods
Before you look at even one home, decide on several neighborhoods in which you’d like to shop.
If you need help choosing, we’re happy to help. Home prices in each neighborhood, for instance, will help us whittle down the list.
If commute is a concern, choose neighborhoods close to public transportation or near highways.
Think about amenities you want in a neighborhood, such as parks, recreational facilities, walkability and proximity to schools.
Give us a copy of your “wants” list and we’ll help you determine which neighborhoods you can afford to live in and which meet your needs and desires.
5. Consider the buddy system
It’s always good to have two sets of eyes when shopping for the biggest purchase of your life.
If you’re married you have an automatic “buddy” to accompany you on home viewings. If you are single, find a buddy who is willing to house hunt with you.
Give your shopping buddy a copy of your wants and needs list so he or she can help keep you from becoming starry-eyed over a house that doesn’t fit your criteria.
Which brings us to step 6.
6. Plan to leave your emotions in the car
Buying a home can be an emotional process. After all, you’re spending a lot of money on it.
In the end, however, it’s a business transaction and if you approach it as such, the process will be much easier.
Remember as well that cosmetic issues are easy to fix. Don’t let them keep you from buying a home that is otherwise perfect for you.
7. Take notes
Note the address of each home you viewed that you were even slightly interested in and their good and bad features.
This will help jog your memory when you sit down later to weigh the pros and cons of each.
8. Do or don’t “sleep on it” before you decide on a home
While sleeping on a major decision is always a good idea, in a fast-moving real estate market you simply do not have that luxury.
In multiple offer situations, by the time you wake up from sleeping on the decision the home will be under contract with another buyer.
9. Don’t spend money
Many first-time homebuyers are so excited when their offer is accepted and the closing date is approaching that they decide to splurge on items for the home.
That’s a huge mistake
Lenders perform what is called a “soft pull” of your credit report shortly before closing. They do this to ensure that your financial picture is the same as when they agreed to lend you the money.
If you purchase big-ticket items on credit (such as new furniture or appliances), your debt-to-income ratio will change and you may find out, days before closing, that you no longer qualify for the mortgage.
Don’t switch jobs, don’t buy any expensive items on credit and pay your bills on time. Save the splurge for after closing.
I’m happy to answer any questions you have about the home buying process Feel free to contact me.