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Tips for Buying a Home

1. Crunch the Numbers

The first thing you need to do is figure out what sort of monthly mortgage payment (with related expenses) you can comfortably afford. Be sure when you figure this out that you include such items as property taxes, home owner insurance, and upkeep on the property. Remember, if the air conditioning goes out or you need a new garage door, there will be landlord to turn to. Further, when coming up with your housing budget consider not just your expenses today, but those that you can reasonably predict for the future. This may include such things as day care expenses, allowing one spouse to stay at home with children, college tuition, or a new car. While a $1,000/month mortgage may seem manageable now, if you have two children in six years this amount may be something of a stretch.

2. Get Pre-Approved

Before shopping for a new house you should get a pre-approval letter from your lender. Your agent can also recommend several as lenders and agents work closely to get transactions closed efficiently. The pre-approval shows potential sellers that you are a serious buyer, but will speed the process along if you find a house that you want to purchase in short order. However, the pre-approval letter should not be the benchmark by which you determine the amount of money you are willing and able to spend on a new home. Again, keep an eye on your budget and if that dictates a $200,000 purchase price whereas the pre-approval letter states a $250,000 budget, you need to stick to the lower price. You want to purchase a home you can comfortably afford, not one you can barely afford.

3. Pick the Perfect Agent

The real estate agent that you select will be intricately involved in nearly all aspects of the home buying process, so you need to find just the right one. Take the time to meet with or at least speak with several potential agents prior to selecting one for your impending house hunt. Your questioning process for the prospective agent may cover such topics:

• Do you specialize in first time home buyers?
• How often do you check your email and phone?
• How many traditional and non traditional sales have you closed and what are the differences?
• Do you live in this area?

Often, just meeting with the agent for a short period of time will give you a sense of whether you can amicably work together in your quest for a new home.

4. Do Some of Your Own Homework

Doing your own homework is important when you are house hunting in your area, but it is absolutely critical when you are looking at properties out of your neck of the woods. While your agent will do some of this for you, make sure that you also research your target area yourself and look for things such as:

• Accessibility to shopping, interstates, parks, museums, churches, etc.
• Average annual income
• Crime rate
• Local park district
• Access to hospitals and/or urgent care facilities
• School district report card

With the advent of the Internet, a great deal of this sort of research can be done quickly and efficiently online. In fact, try to find a few blogs about the new area and see what you can learn. If the new community is within driving distance, take a few trips there and get to know the neighborhoods. You may want to stop at a local diner, chat up the locals and get a feel for the area. You want to make certain that you find a community that really feels like home to you.

5. Work with Your Agent and Not Against Them

Your real estate agent works for you and wants nothing more than to help you to find the perfect home. You need to listen to their professional expertise and be open to what they have to say. A savvy agent will let you know when your expectations are too high (e.g., a $75,000 home in established area with 4 bedrooms, 3 bathrooms and an in-ground pool) and will keep you focused on what you truly want out of a home. The fact of the matter is that you may not find 100% of what you are looking for, so you really need to prioritize what you need. Further, keep close tabs on your wants versus your needs. While we would all like to have a three car garage, this falls under the ‘want’ category for most folks.

6. Home Inspections

You can not underestimate the importance of a home inspection. Professional home inspectors are specially trained to find electrical, plumbing, and structural problems. You will want to find this out prior to purchase and not be stuck with a hefty home repair bill in six months. In most cases, you should try to be with the inspector as he is examining your property so that you can ask questions and better get to know the property. Your real estate agent can suggest a local home inspector and you can expect to pay about $300-500 for their services.

7. Enjoy

Finally, relax and enjoy the process. The bottom line is that you will eventually find a house that you adore in a neighborhood that feels like home to you. Be patient with yourself, patient with your spouse, patient with your agent, act with a cooperating spirit and appreciate the pathway to home ownership.