Buying a home is exciting! In fact, it so exciting that a lot of buyers jump right in without any prep work at all. It’s understandable; we are used to instant gratification and things being easy. We have become so spoiled with apps and being able to Google anything that it’s easy to assume that we can wing it. Sometimes it works out great. Other times it leads to someone begging their landlord to let them stay even though they gave their notice and someone else is ready to move in. The good news is that a little bit of prep work can go a long way in the successful purchase of a home.
Follow these easy steps and you will be set up for success!
Understanding your budget is vital in purchasing a home. Sit down and figure out how much you are spending on all of your monthly expenses. How much is your car payment? How much is your current rent? Do you have any big expenses coming up? Do you have an expensive hobby? How much do you spend on food and gas? Do you buy a venti triple shot caramel macchiato every day on your way to work?
Your lender will pre-qualify you biased on your debt to income ratio. Sometimes they will qualify you for a loan amount that is more than you can afford because they don’t factor in your lifestyle. It is up to you to be responsible and know how much you can afford. You may have to make some changes in your spending habits in order to afford the home you want.
2) Build a Team
Start building your team of professionals that will bring you to the finish line. Ask your friends and family for a referral to a good Real Estate Agent that they trust. Consider interviewing more than one agent to make sure you are with someone that you trust and mesh well with. Make sure they listen to you and are invested in your interest over their own. Repeat the same process to get lined up with a good local lender. Your Real Estate Agent can also make recommendations on Lenders, Inspectors, Insurance Agents, etc. This team will be able to advise you on all the aspects that go into your home search so you are ready to go.
3) Get Pre-Qualified
After you have your lender selected, you will want to work with them to get pre-qualified. This easy process will look at your credit score, debt to income ratio, work history, etc. in order to determine how much money they are able to lend you. The lender will discuss different loan programs that you qualify for. These loans programs all have their own criteria for income, geographic boundaries, and property types so make sure and pay attention to what type of loan they are pre-qualifying you for. Discuss the loan type and amount with your real estate agent so they don’t show you properties that will not work for your specific situation.
4) Begin Your Home Search
There are several different outlets to finding a home and it is important to understand that this is a team effort between you and your Real Estate Agent. New inventory is coming on the market every day and can fly off the shelves. It is important to have the correct tools in place so you don’t miss out on the perfect house. Sites like Zillow and Trulia are very popular and can be a great resource, but they are also notorious for errors and phantom properties. They are great at getting properties onto the site, but not nearly as good at getting properties off the site that are no longer available. A better resource that your agent can set you up with is your own custom real estate portal that is tied directly into the Multiple Listing Service. The MLS is a giant database that your agent uses for listings and research. They can set up email alerts specific to your search criteria and get notified as soon as a match is available. As properties begin to feed into your portal, let your agent know what you like and don’t like so they can get a better feel for your preferences and set up showings.
Attending open houses is also a great way to learn about the market and homes in a specific area. When you go to an open house be a little bit tight lipped. The agent hosting the open house often represents the seller and anything you say can and will be used against you in a negotiation. If you fall in love with the open house keep your cards close and call your agent right away.
Following these steps will get you set up for success. When you are prepped and ready to go, the process will smooth and a lot less frustrating.
If you are currently looking for a Real Estate Agent to partner with in buying a home you can learn more about me here. Good Luck in your home search.