I find it easy to sometimes forget how daunting it can be for someone to move to new place and buy a home. It has been proven to be one of the most stressful things to do in life. Real estate agents should remind themselves all the time to be patient and understanding with clients. We all have things we’re going through and if someone is moving then that just takes the stress of normal life up to another level. Below are the top 10 things that think people should consider when buying a house. Please feel free to share with your clients and maybe we can do our part as real estate agents to make home buying an exciting experience.
As a home buyer there are several things to consider and understand in order to make the process flow more easily thereby making it less stressful. Here are what I think to be the top 10 things to consider when buying a home.
- MOST IMPORTANT – Are you qualified to buy a home? This is the most important question to answer before you even begin this process. The last thing anyone wants to do is search for their dream home, find it and then discover that it is out of their reach. So before you get started with your search, I recommend you talk with a lender about your situation. That way you can quickly check and see if this is something that you are able to pursue further. If you’re not sure who to contact then contact a real estate agent. Most real estate agents will have a list of preferred lenders.
- How much money will I need for closing? As stated earlier, buying a home is extremely stressful so the more information that you know upfront the better. When you’re talking with your lender please make sure that you understand how much money you may expected to bring to closing. This will include your down payment and any closing costs that you will be responsible for paying before taking possession of your new home. Closing costs can vary widely depending on different scenarios but you need to know and understand this to better help you when negotiating an offer.
- Complete a personal budget. You will save yourself much heartache and stress if you really understand what house payment you can afford without breaking the proverbial bank. You may see that you qualify for a higher priced home but your monthly payments will make you house poor and that’s NEVER good. Really look at your finances and know how much money you need to live on comfortably. I am a big proponent of personal budgeting and have been doing it every week with my wife for over 10 years and it has helped us understand exactly what we need and how we spend our money. If my clients are happy home owners (not stressed out due to being house poor) and I provided the right service, they (usually) will gladly hand out my number to their friends. The last thing I want are my clients to be house poor and regret their decision because I know that some of the blame (in their minds) will fall on me and my profession.
- Pick an Agent – Communication is key between you and your agent. Do they truly listen to your wants and needs? Do they respond quickly to requests in a timely manner? Are they willing to spend the time it might take? I look at a big part of my job as a real estate agent as customer service. My clients are buying a house and that’s a big deal so they deserve the best service possible. However, as a client please remember the communication is a two way street – be upfront with the agents about your needs and your timing. We are not mind readers and every little bit of information can help. Lastly, you need to be comfortable with your agent and their skills. I encourage people to go with their gut. If it doesn’t feel right then there is usually a reason.
- Criteria for Your New Home – Know what your needs and likes are when looking for homes. Really think about the number of bedrooms that you need. Consider if you need a basement, garage, how will stairs impact us, will our family grow or shrink in the next 5+ years? Make a list and look at it often. Funny thing though, it has been my experience that there is a huge emotional part of the home buying process. Some clients have walked into a house and knew immediately that it was the one and their “must haves” list went out the window!
- Know your Search Area. Real estate agents are only allowed to say so much about areas. They can not discriminate and steer you into or away from a specific area. When buying a house, you need to do your own research about neighborhoods, crime rates, schools, etc. The better informed you are the happier you’ll be with your purchase. One tip that I tell clients is to go visit a potential neighborhood after work hours during the week or Saturday afternoon. People are usually out walking the dog or playing with their kids. If you’re comfortable then ask some of them what they like and dislike about the area. Also, take notes! You may see a lot of homes before you decide, and notes will help you remember.
- Make an Offer – Once you have selected a home and want to make an offer then you need to have a few key pieces of information. What are homes similar to your potential new home sell for in the surrounding area? What concessions (money towards closing costs) were included in the sale? Your real estate agent should provide you with a competitive market analysis (CMA) or something similar. The CMA will include what the average home has sold recently for in your area of interest, what are the average prices homes are currently listed for and other useful information for your negotiating. Also, you need to know details about your financing situation. If you need some money towards closing costs then you will have to consider the in your negotiations.
- Securing the Loan – Let me start by saying that you should contact your lender before making an offer to make sure nothing has changed since you last spoke (it pays to be safe). Once you are under contract – You need to be in constant communication with your lender/loan officer to ask about information that they need from you and what are your next steps. And PLEASE do not go out and make any big ticket purchases before the sale is complete. That can and will most likely impact your closing.
- Get a Home Inspection – This can include inspections for radon, septic, well, etc.. I stress the importance of a home inspection with all of my clients. It’s essentially kicking the tires of your new home. You want to make sure that someone with a trained eye looks over the home to make sure you’re not buying a money pit. Please understand that this is not a guarantee but it can help avoid major issues. Also, sellers usually expect to have to fix some items in a home so take advantage while you have someone else paying for it. After the home inspection you will work on a “punch list” with your agent to hand over to the listing agent. The sellers have the discretion to say no to some or all of your requests. Please do yourself and the sellers a huge favor and do not nitpick over small items that you can fix yourself. Be strategic in what you ask to get repaired and ask your real estate agent for advice.
- Closing Day – Today’s the day and you’re buying a house! Please make sure that you have everything that you need to bring to closing ready in advance. This usually means a certified check and other documents. It will already be a stressful day due to the large purchase you are about to make so the better prepared you are the less that you have stress over at closing. Depending on the lender you will have MANY pages to sign and go over (now take a deep breath) however at the end you will get there keys to your new home and begin the process of starting a new chapter in your life.
Buying a home can seem like a daunting task but people do it every day and you can too. It can be a great long term investment and more importantly your new home where life long memories will be created so it’s worth the short term work. Your agent and lender can do a lot to relieve some of the anxiety so please listen to them and ask many questions. I wish you the best as you are buying a house.