My wife and I sold our home and bought a new home last fall. During our approximately 6-month real estate journey, we learned quite a bit, and I hope you may be able to benefit from some of what we learned about buying a home.
- Prior to deciding to begin your search, PRAY!
- This is especially true if you don’t have to move! After fervent prayer, if you know that it’s in God’s will for you to move, trust Him to bring it to fruition. If after praying you feel uneasy about moving, stay put!
- Will moving actually improve your day-to-day life?
- Evaluate why you want to move. For us, the main reason was to have more space for our toddler as our home had very little yard and lacked indoor space as well.
- If your reason for moving is that you want to “move up the ladder,” you may want to rethink your priorities.
- Visit open houses.
- Even before we started seriously searching for a new home, we started going to open houses. We were able to get an idea of pricing and speak to various real estate agents about the neighborhoods, market outlook, etc. Plus, seeing a variety of homes enabled us to start figuring out which features we liked and disliked.
- Make a list of requirements and desires for your new home.
- Once you have your list, rate each home you see that has an inkling of potential. If you can tell right away that it’s not the home for you, there’s no need to fill out your ranking, but if you’re the least bit interested, go ahead and fill it out as soon as possible after viewing the home.
Download my example checklist, based on a 1-5 scale:
- Be willing to compromise on your needs/wants, but not on all of them. Ask the Lord where He wants you to live? We finally found the right house for us in just the nick of time to be able to move (rising interest rates, rising prices, holiday season approaching, etc.) when we stopped and asked the Lord which house He had for us and not where we had envisioned living.
- Choose your real estate agent carefully.
- Just because an agent has a high profile or works for a large company doesn’t necessarily make them the right choice for you. Ask your friends who they recommend. Look for someone who is experienced and knowledgeable of the local market.
- Are you selling a home in order to buy a new one? Which agent will be able to sell your existing home and be there for you to help you find the right new home for you?
- Choose your mortgage broker carefully.
- Thankfully, I knew who I wanted to take my mortgage business to, as I sought out the same person that had helped me 10 years prior, and knew the quality of work she performed. She was available for all of my questions (dumb and not so dumb), and made the process as smooth as possible. If you’re not sure where to start, ask your real estate agent if he or she has any recommendations. If they are experienced in the market, they will know who is good.
- It’s better to get started early. Get pre-approved for a mortgage before you start earnestly searching. In this market, if you find a home you want, you don’t have time to begin this process because someone else more prepared will snatch it out from under you.
- You’re approved for how much? Chances are you’ll need to borrow far less to purchase a home than what you’re approved for. It’s really a shame what banks will approve folks to buy that they really can’t afford. We were approved for a loan amount almost twice what we ended up borrowing. Know your budget, what kind of house payment you can afford, and whether your income is likely to increase in the years ahead or not.
- Know what you can afford.
- Use detailed mortgage calculators to give you an idea of what you can afford. I like the one Trulia offers. You’ll need to plug in numbers like your down payment, purchase price, and so forth. And you’ll need to click “Advanced” and plug in property taxes for the home you’re interested in and divide by 12 to see how they will affect your payment. You can usually find property taxes posted on the city or county government website where the home is located.
- We made an offer on one house we really liked, but it was at the very top of our budget. It had just about everything we were looking for. We put in our best offer pretty much knowing it would be rejected because of the extensive interest in the home. Sure enough, our offer was rejected in favor of an offer that was above asking price. And that was okay. We decided it wasn’t worth it to stretch our budget so much that we would be house poor if our offer was accepted. It’s okay to periodically reevaluate your budget as you search, but do not break your budget! There will inevitably be unexpected expenses once you settle on a home.
- Look for a good value.
- In a seller’s market, it can be difficult to find a good value when purchasing a home. But they still exist—if you can get to them first! Don’t give up!
- You never know when you might move again, so try to find a home that is likely to increase in value over time. Some factors that contribute to this are:
- School zone
- Appearance of surrounding properties
- Nearby zoning (i.e. residential, commercial, etc.)
- Quality of home construction
- Convenience to local employers, shopping and recreation
- Check to see if the home has sold within the last 10 years. If it has, note the sale price. Then, determine with your real estate agent if the current asking price is reasonable based on inflation, market trends, and condition of the home. The home may have had improvements since it was last sold that might make it more valuable. Alternatively, it may need improvements that have been neglected that might make it less valuable than the asking price. In a seller’s market, homes will generally start off at an asking price that is equal to or higher than its actual value. Don’t get stuck paying more for a home that needs a lot of work, unless the owner agrees to fund substantial repairs prior to closing.
- Try to meet the neighbors before making an offer.
- Unless you are buying property with acreage, you’ll be living in close proximity to a new set of strangers. Make efforts to at least acknowledge neighbors who are outside while viewing a home. This is not always possible of course, but take advantage of it when you do see folks. We spoke with neighbors of several homes we viewed. We liked the neighbors surrounding one particular home so much, we almost overlooked numerous negative aspects of the home!
- If you don’t have an opportunity to meet the neighbors prior to making an offer, be on the lookout to meet them when you go to the home inspection, or if you just drive by the home during the contract period.
- Consider municipality.
- Is the home you’re interested in located in a compatible municipality? Consider whether the local government is working for its citizens and doing it in a fiscally responsible way. Are public facilities up to standard? Are schools above or below average? How do property taxes compare to surrounding areas? How much travel time will you face on a daily basis to and from work or school?
Good luck on your home search! I hope you find these tips helpful.
Leave a Reply