Lots of preparation goes into buying a house. By the time you get to the point where you actually start looking you have to have already done lots of prep work. Buying the house, in a way, is actually the beginning of the end of the whole process.
Below are 7 tips that will help you lay the groundwork for one of the largest and most important purchases you will make during your lifetime.
Tip #1 Consult with a Mortgage Broker
It is one thing to assume you know what to do to get pre-approved for a mortgage, it is another thing to actually know. I talk to future buyers every day and many of them do not have a clear idea of how to prepare their finances in order to buy a home.
I always recommend talking to a mortgage broker in order to get prepared to get pre-approved. A mortgage broker will be able to tell you what your finances need to look like in order to pre-approve you. By taking the time to talk to a mortgage broker, you will avoid being surprised 3, 6 or 9 months down the road by something you did or didn’t do that ended up jeopardizing your chance of getting pre-approved.
Tip #2 Prepare Your Credit
Based on the consultation you have with the mortgage broker, prepare your credit. The better your credit the better the interest rate, loan terms and down payment you will be able to secure for yourself.
Tip # 3 Save for a Down Payment and Closing Costs
Knowing how much you need for a down payment and closing costs is important in order to close the deal.
Depending on your credit score and general financial situation you will be required to put a certain amount of money down. Down payments can be as low as 3-3.5% to over 10%. By having consulted with a mortgage broker you will know what percentage you need to put down and that will help you save the right amount of money.
Calculate that you will need an extra 3.5-4.5% toward closing costs. You may be able to get lender credits or a seller contribution but don’t count on those. Factor closing costs in to your budget and if you can lower them through negotiation then you will have a few extra bucks in your pocket at closing.
Tip #4 Get Pre-Approved
After you have prepared your finances the next and most important step is to get pre-approved. The pre-approval will help you determine your budget and is your Golden Ticket to seeing homes.
Most importantly, though, your Realtor® will need the pre-approval in hand in order to put in any offers. So if you don’t have it and you find the house of your dreams, you will be scrambling to get a pre-approval to make an offer and in the meantime someone else who is already pre-approved might just scoop up your dream home. Don’t miss out, be prepared!
Tip #5 Create a Wishlist
Create a wishlist of the things you want and rate them according to importance. Don’t expect to find the perfect house, do expect to find a house that has between 85-90% of the features for which you are looking. Share your list with your Realtor®.
Tip #6 Do Some Preliminary Research
Starting looking in areas that are within your budget and in which you would like to live. Get a feel for what is out there and share what you find with your Realtor®. Together you can create a game plan for finding the house that will be your home.
Tip #7 Align Yourself with a Great Realtor®
The Importance of Choosing a Great Realtor®
When I did my doctoral studies in Educational Technology research revealed that the teacher and not any sort of technology was the most important factor in student learning. Based on that knowledge and my experience, I theorize that in real estate the Realtor® is the most important factor in your buying and/or selling experience.
Choosing the Right Realtor® for You
Find out which Realtors® work in your neighborhood and ask friends and family for recommendations. Create a list of potential Realtors®. Interview them and see how you connect. After the interviews, take the time to evaluate which Realtor® you best align with and go for it!
Before we conclude on this point, let me leave you with one last consideration when choosing a Realtor®.
Chances are you know someone who is licensed. Before you choose them be sure that hiring them will be in your best interest. Some questions to ask yourself about them are: Do they work in real estate full time? Are they experienced? Do they have the time to dedicate to me? Do they have the knowledge to help me throughout the process? Do they have the right network set up to get me from contract to closing?
There are many ups and downs in real estate and there is no amount of friendship or family bond that can replace experience. So do your research, consider carefully and choose well! Remember the choice you make will make all the difference in your real estate experience.
Buying a house is one of the most important purchases you will make in your lifetime. Preparing to buy is just as important as finding the right house. By taking to heart the 7 tips in the article above you will lay a firm and secure foundation for the purchase of your first home.
If I can do anything in the world to help you prepare, just contact me and let me know how I can help you.
Désirée is a licensed Florida Realtor® and Real Estate Influencer committed to a high-level of professionalism and to helping others with their real estate endeavors through education. Désirée Ávila was an award winning teacher for 10 years and has a doctoral level education in Educational Technology. Désirée is a lifetime local resident of South Florida and is fluent in Portuguese, Spanish, French and Italian.