Buying a home can be overwhelming. You have moved past the dream and are now ready for reality. There is nothing that could have prepared you for what you are feeling. First-time home buyers have shared the experienced with us. The doubts range from not knowing what you think you should know to not being sure what you know is really what you should know. Couples face the challenge together and single folks face it alone, but they both feel the uneasiness. How could you feel any other way? Just the basics are daunting. You are preparing to spend anywhere from a quarter of a million dollars to more than a million dollars. You have been saving, and it has taken forever to accumulate that nest egg. Suddenly, all the sacrifices you have made are staring back at you.
You have done your part. You may have spoken with a lender already or you may have just begun searching on-line looking at homes. What next? Well, before I go any further, let me share the list of things you need to have accomplished before looking at one more pretty picture of a home for sale on line.
This is your initial checklist. Taken one step at a time, it will be less overwhelming. For now, the long term goal is purchasing a home but you are going to focus on a series of short term goals, one at a time. Clear everything off your plate and follow these easy steps in order they are presented. The title by the number is the goal. The subtitles under the goal are steps taken to accomplish the goal.
- Establish your financial position.
- Make contact with your personal banker, a rival local bank and a local Federal Credit Union.
- Sit with each one and inquire about their loan programs. Share only what is necessary for them to give you a general idea of what they have to offer.
- Once comfortable (you truly understand what is being shared, if not, go back a step) ask them to give you a general idea of what you can afford based on a payment that you are comfortable with making. Do not allow them to pull a credit report at this time. It is not needed and you want to keep the number of inquiries to a minimum so your FICO score will not be impacted.
- Thank them for their time and give the information at least 24 hours to sink in.
- Make a follow up appointment to discuss anything questions you have. Unless your personal bank is an online bank, you can have them prepare a pre-approval letter for you. The only caveat I will offer is that sometimes market conditions are such that Federal Credit Unions have better products. If that is the case, have the FCU prepare the pre-approval letter. Whomever you choose, they can pull your credit reports.
- Understand, this is just the beginning of the financial process. You are not bound to any lender. As long as there is time for the loan to be processed prior to closing, you can switch lenders.
2. Determine where you want to live
- Stop the wide focus searching on the internet. Narrow your choices down to specific areas.
- In urban areas, you will find neighborhoods and in the suburbs you will find developments.
- Your focus should be on where the area is in relation to your job and what are the various ways you can commute between home and work from each area.
- Once you have some areas in mind, go spend time in them. Visit on a weekend afternoon, Drive by in the evening. If possible, park you car (if you have one) and walk around. Get a real feel for the area. You will be able to tell more about the area by actually spending time there than any website will be able to relate.
- If neighbors are out and about and you are up to approaching them in congenial fashion, stop and ask “what’s the neighborhood like?”
- You will find that your visits factored with your commute will create a pecking order of preferences for you to use as an outline for your actual home search.
3. Select a Realtor
- At this point, you really do need a guide, caretaker, interpreter and adviser. As you can see, if done properly, the process has already been quite extensive.
- The Realtor will be the person that assists you in your search. Of course, you will spend hours in front of computer screens, dreaming and hoping. Your agent will be the one charged with providing you facts.
- Your Realtor should have a deeper knowledge of the area than what you have gleaned in your visits.
- The most important thing your Realtor can do initially is listen to you. It is your home search. There is no way it can be accomplished successfully unless the agent is on the same page as you.
- Communication is vital. Keep in mind all you have put together to reach this point, You have to understand what is going on and how the process is proceeding.
- The Realtor has the tools to fine tune your criteria and match it with available properties. Keep in mind, every listing presented or suggested is only a maybe. You will turn away more than you will choose to visit and you will visit more than you will opt to purchase. Don’t be afraid to speak up and ignore a suggestion. Again, it is your home search.
4. The Search
- You are ready to begin the search in earnest. You have your financial base, your target areas and your Realtor. Now you can begin to separate the pretenders from the contenders.
- A solid search can be done based on area, price, amenities (number of bedrooms, bathrooms, parking, etc.), and style of home (single family, town home, condominium) Note: price may narrow choices regarding location and some amenities).
- It is important that you truly understand, your Realtor has access to every home that is listed in the MLS in your area. The same can not be said for the national search sites. National sites (Zillow, Trulia, etc) do not have contractual agreements with all multiple listing services and in some cases they are missing homes that are for sale or show homes for sale that have already been sold. That is just reality.
- Your Realtor should be monitoring the MLS to make sure you are notified of every home on the market that meets your general criteria as soon as it is available.
- Viewings must be scheduled. In some cases, visits have to be scheduled a day or two ahead of time. Your agent is at the mercy of the seller’s showing instructions. You should be able to give your Realtor the times that you are available to view homes and set up viewings at your convenience. It is your home search. Just remember, in many cases, it is not possible to call and set up an appointment for later in the same day.
- Re-visit any home that you are considering to purchase. The first visit was just that, the first visit. The second visit should be a bit longer and you should take the time to visualize living in the home.
- Do not be discouraged if it seems like the process is plodding along. When you walk through the doors of the right home for you, you will know it.
Now, you know you are financially ready, you know where you want to live, your agent has taken you through homes and you have found the one!
Sit down with your agent, he will help you prepare an offer that will present you in the most favorable position to the seller. You have gotten this far. The rest will be nerves. It may help you to make a list of all the reasons you have to be proud of yourself for reaching this point. Never discount the pride in accomplishment every new home owner feels when the receive the keys at closing.
Of course, if you reach step 3 and figure I might be a good choice, fill out the form. I would be delighted to assist you in your journey.