Are you ready to buy a home, but don’t know where to begin? This one is for you. Today I’m going to be talking about what you should do BEFORE scouring Zillow or Trulia for your dream home. Whether you’re a first-time home buyer or a seasoned pro these tips help you set realistic expectations. Start the home buying process off on the right foot.
Know exactly how much income comes in each month and how much is going out. Don’t forget about any debt you have. If you don’t already have a budget system, set one up to track your income and expenses. Use an Excel spreadsheet or download an app such as EveryDollar or Mint.
You know your exact income and expenses. Now, it’s time to budget in a monthly payment that would make you feel comfortable. Knowing your budget and sticking to it is a key piece of the house hunting puzzle.
Don’t forget to factor in expenses for your new home. Are you budgeting for necessary updates? What about an increased electricity bill?
Find a REALTOR® that is going to be on your side. You want someone who is going to listen to you and educate you throughout the entire process. They should be able to explain how they work with their clients and the home buying process. They should address any concerns or fears you may have. If you aren’t pre-approved for a loan they can help connect you with a loan officer.
You might get pre-approved for an amount larger than what fits into your budget. Knowing the monthly payment you want to have keeps you in check, and reduces the temptation of looking at that home that’s $15,000 above your max price. The last thing you want to do is get blindsided by a beautiful home and blow your budget. The main takeaway: talk to a loan officer BEFORE you walk through that house you’ve been eyeing. Your loan officer can also help you determine your down payment and approximate closing costs.
Your REALTOR® should explain how the market is doing in the area or areas you are house hunting in. They don’t have a crystal ball, but they can give you information on pricing and what to expect in your price range. Once you understand the market conditions, be realistic about how far your dollar will go.
This sounds like a no brainer, but this simple step tends to be a big hang up for home buyers. Your needs and wants can often blur, so it’s important to look at true needs. Do you need granite countertops or is that a want? Grab a piece of paper, make two columns, and jot your wants and needs out. If you aren’t finding anything that fits all your criteria it might be time to see if any of those “needs” can move to “wants.”
Follow these steps and you’ll be on your way to feeling confident about finding the place you’ll call home. Being prepared can make a world of difference for you now and in the future.