Thinking about buying a home this year? Congratulations! That’s a big first step. While starting the home-buying process can seem overwhelming, there are many things you can do to set yourself up for success. The right preparation can be the difference between a smooth home-buying experience and tons of added frustration. Plus, there are several traps that you’ll want to avoid too. If you are getting ready to buy a home, make sure you check these five things off your to-do list first:
Know your budget. Sure, when you get your pre-approval letter, the lender will tell you how much they think you can afford. But, have you considered exactly what that monthly payment will mean for your finances? It is crucial to make a budget and stick to it BEFORE you start shopping. Just because you can technically afford the payment, doesn’t mean you should max out your budget. Sit down and audit your finances. Look at your regular monthly expenses and keep in mind any additional expenses you might incur as a homeowner that you aren’t already paying. Use these numbers to determine how much you can afford to spend on a house per month and your budget range for the purchase price.
Talk to multiple lenders. Skipping this step can be extremely costly. Did you know that lenders have widely different fees, interest rates, incentives, and programs? These differences can cost you thousands out of pocket upfront and even more over the life of your mortgage. That’s why price shopping is critical. Sit down with three different lenders and walk through the costs of each one. Ask about any programs they are running that might provide you with additional assistance. If you find you like a lender that is more expensive, price shopping can give you leverage to negotiate to get the best possible deal. It’s also worth mentioning that a good local lender is worth their weight in gold.
Do your research. Yes, your real estate agent should be incredibly knowledgeable about the area in which you are searching and should be able to guide you in the right direction to make the best decisions for your individual situation. However, it is still important that you educate yourself on the housing market in the area you are searching. Before you begin your search, take a look at exactly what your budget in your target area will get you. If there is a large discrepancy between the homes you love and your price point, discuss with your agent ways you can maximize your budget. You may have to consider which features are most important to you and which ones you may be able to add or modify later. This research helps to create realistic expectations around your house hunt and can allow you to adjust accordingly, avoiding unneeded frustrations.
Know your priorities. But know they can change, and that’s okay. While yes, I absolutely recommend you have your budget nailed down and a target area identified, you don’t have to have every other detail of what you’re looking for solidified before you start your search. You should have a basic idea of the home characteristics you need like size and type. Other details can be ironed out during your search, and they will likely change a bit anyways. As you see homes in person you will find you will get much better at determining your highest priorities, and they may not be what you expected. You may also find specific features of a home may become complete deal-breakers that you had previously never even considered before. All of this is normal.
Don’t wait for the “perfect” house to start your search. The truth is if you wait until the perfect house hits the market you’re probably already too late. Odds are, you’re not the only one that thinks it’s perfect. Homes that are updated, priced well, or are in a desirable location typically go under contract quickly. Getting everything in line to submit an offer can take days, if not longer. Plus, even if you can pull everything together, you won’t have time to do your due diligence or price shop which can cost you big time in the end. Most pre-approvals last between 60-90 days and can be easily renewed so if you’re just waiting for that perfect house to pop up, it’s best to make sure all of your ducks are in a row first.
Buying a home can seem like a daunting process but a little prep work can go a long way in making the process smooth and stress-free (or as stress-free as a major purchase can be anyways). What lessons did you learn when you bought a home? I would love to hear about your experience and your advice in the comments below! If you're looking to purchase a home in the Atlanta area, I'd be honored to speak with you further about how I can help you with your search. Not in the area? No worries. I've got a global real estate agent network that can help!