Buying a home is often a highly emotional experience. It begins with the exciting prospect of finding your perfect home and the exhilarating idea of new beginnings. But as the hunt progresses, it can become an emotional roller coaster. After viewing many homes, you might fear you'll never find the right home. When you find the perfect house, you'll be dealing with frustration if another buyer beats you to the punch. When you do make an offer, you may be worried you offered too little or too much. You'll also experience disappointment if your offer is rejected.
But once you've closed on your home and you're confident you made the right decision, you'll rejoice, knowing it was worth every bit of the turbulent ride.
Before Shopping
The first thing to do is to make a list of your objectives. Are you trying to reduce your work commute? Is there a particular school district you like? What about proximity to shopping or recreation?
Also, think about the specific features you want in a home. Would you like a larger garage, finished basement, professional landscaping, a certain number of bedrooms and bathrooms, updated kitchen, ample closets, or a home that's turn-key ready? Make your list as detailed as possible. Next to each item, mark if it's a must-have, prefer-to-have, or nice but not necessary.
The reason for creating this list and then breaking it down is two-fold. First, buying a home is a significant investment. Secondly, since there's seldom a home with every feature you want, you should prioritize what's most important to you.
You can always add to your list or amend it, but it serves as a blueprint to narrow your search while keeping you on track.
When you find a home that wows you, look at your criteria to make sure the house has all or most of your must-haves. If it doesn't, maybe you'll decide your criteria have changed, and this home is just what you want. On the other hand, it might also bring you back down to earth and encourage you to continue searching.
Determining Affordability
First, prepare a budget and figure out how much you can comfortably spend each month on mortgage and interest payments, property taxes, and insurance. Also consider whether there'll be a substantial change in monthly utilities. Include an allowance for home repairs and maintenance as well.
Second, get pre-qualified through a mortgage lender. Despite what you calculate, a lender will ultimately determine the maximum you can afford. Don't risk getting your hopes up on a particular home until you know the amount of your loan.
Beginning the Search
Now you're ready to find a realtor!
When choosing a realtor, some important factors to consider are:
- Customer satisfaction reviews: do customers leave positive comments?
- Whether the realtor is located in the area where you plan to buy. (This matters because your realtor's access to the MLS system, the database of homes listed for sale by agencies, is limited to the realtor's own region.) If you're making a big move to a distant area, choose a realtor in the area to which you're relocating.
- Whether the realtor is willing to sign an Exclusive Buyer's Agency Contract. Under an exclusive buyer's contract, the realtor represents you, the buyer, rather than both buyer and seller. While in many states you can ask the realtor to write up and submit your offer, be aware that some states allow that realtor to be a dual agent, required to treat both the buyer and seller with fairness and honesty. In this capacity, "your" realtor is also working for the seller, and therefore cannot be loyal to you or specifically advance your interests.
When you meet with a realtor, make sure they feel like a good fit. The agent should ask plenty of questions to gain a solid understanding of what you're looking for. Also, find out if the agent is available to show homes during your usual hours of availability. Finally, be cautious before signing an exclusive contract. Ultimately, you'll want to do this when you find the right agent. But if you're not yet comfortable with the agent, be prepared to say you need time to think about it and stand your ground.
Home Inspection
Once you've made an offer, getting a home inspection is crucial to help ensure you're making a sound buying decision. Unfortunately, too many homebuyers learn the hard way that inspectors are not required to be licensed or have any special skills or training in many states. Do your homework before hiring an inspector. Ask about their qualifications, how long they've been in business, and get referrals. Also check with the Better Business Bureau and search online reviews of the inspector.
A skilled inspector will look at every aspect of the home, including windows, foundation, attic, roof, plumbing, electrical components, and much more. Your inspector should alert you to all defects, big and small. They should also note any aging features that could require repair or replacement in the not-so-distant future.
Make the Right Decision
Regardless of what a lender says you can afford, or whether an agent pushes you to bid higher, you are the best judge of what's really within your budget. Don't make a decision you're not confident you can afford. Remember, your financial well-being and lifestyle are on the line. Two keys to making your final choice:
- Don't get impatient in choosing your perfect home. Sometimes it takes a while to find just the right home. Although you may never find a home with everything you've ever dreamed of, make sure it meets enough of the criteria that matters most to you so you can live happily in your home.
- When you do find the perfect home, don't drag your feet. If it's a buyer's market like we’ve seen recently in Lake County, it could be gone before you act.
And finally, once you make an offer, try not to get your heart too set on the home until it's been inspected. That way, if the report comes back reflecting costly repairs, you'll be able to make a wise decision on whether to proceed.