Earlier today, I was speaking with a couple planning to purchase a home in the next six months. We’ve just begun the process, and this is always a fun time to work with someone…looking through home listings, picking out favorites, talking about their dream home. Over the next several months, we will likely tour a number of homes together and eventually find the one they will purchase and have the pleasure of calling their home. This is the start of an important and sometimes overwhelming journey, and the great responsibility I have towards them is to make this experience as stress-free as possible. Here are 5 tips for all homebuyers to consider to help ease the process of buying a home.
1. Be Patient
Buying a home can be a lengthy process. Unfortunately, unlike the house hunting shows on TV, you will most likely tour more than three homes before making a decision. It’s a rare treat for all parties involved if you find your ideal home on day one and all goes smoothly to the closing table. Experience has taught me you will need patience and a lot of it. Hopefully you won’t have to walk through a hundred homes before finding the one, but you will probably need to overcome a few obstacles along the way. By having the right mindset from the beginning, you will save yourself some heartburn along the way.
2. Get Pre-Approved
One of the first questions I ask buyers is if they are pre-approved for a mortgage. Hopefully the answer is “Yes! We are working with so-so lender. Here is our pre-approval letter. We want to keep our monthly payment below x amount. When can we start looking at homes?” If a buyer isn’t pre-approved, I recommend a lender and ask they make a call to get this important step done. Without knowing how much home a buyer can afford and a maximum monthly payment, I really can’t begin my job of finding them a home. Not to mention, most sellers will not even consider an offer to purchase their home without first seeing a pre-approval letter.
If you are curious what you can afford, the rule of thumb is your monthly income should equal 3x the mortgage payment. For example, a $1,500/month payment means a buyer needs to make at least $4,500/month or $54,000/year. How much home can this buy? Well, that will all depend on interest rates, your down payment and loan terms, and a home’s property taxes. For example, if your interest rate is 4% on a 30 year mortgage and you put down 5% on a $225,000 home with $5,000 in property taxes, your payment will be around $1,500/month.
3. Be Prepared
Remember those obstacles I mentioned earlier and the need for patience? Here are just a few issues buyers might encounter:
- Sellers that make buyers work around their schedule to see their homes.
- Sellers that don’t want to reasonably negotiate.
- Home inspections that discover your dream home is a real nightmare.
- Sellers that refuse to make any repairs recommended by a home inspector.
- Appraisers that think you are paying too much for a home, even though you’ve seen 40 homes and know the price is right.
- Lenders that will want everything but a blood sample to approve your mortgage.
- The closing date getting pushed back because someone forgot to push a piece of paper to the lender.
- The closing date getting pushed back because the seller waited until the last minute to hire movers and now needs an extra week to get out of the house.
You get the idea. Until you get to the closing table and get the keys into your hands, anything is possible, but I will do all I can to prepare you and help you overcome anything standing in the way of buying a home.
4. Work with a Professional
By this point, you probably don’t need to be convinced that working with a real estate professional will make buying a home easier. It should, at least. The key, of course, is to work with someone that is in fact a professional, has the experience of working with numerous buyers, navigated through all sorts of circumstances, and can prepare you for all the “what ifs.” After a decade of working as a Realtor, I’ve seen enough “what ifs” to help buyers navigate the process with few surprises. Besides experience, look to work with someone with knowledge of the local marketplace, integrity to always tell you the truth and put your interests first, persistence to get you the best deal possible, solid communications skills, and hopefully someone you will end up calling a friend. This is the greatest reward of being a Realtor- establishing lifelong relationships and helping people realize their dreams of homeownership. Here are a few recommendations from people I have worked with over the years.
5. Stay Positive
There will be plenty of highs and lows along the way to finding your next home. This is something you will most likely do only a few times in your life. Enjoy the experience! By staying positive, you will find the search for a home is a fun and rewarding time. If you are ready to begin, let me know!