It’s not often that a real estate agent says, “wait, don’t buy yet!” Well, I am the exception, I guess.
The idea of buying a home is exciting. Once you’ve got the cash saved up, or you’ve been approved for a mortgage loan, it’s easy to think, “alright, let’s get out there and buy.” However, you should never just dive right into the real estate market. There are a lot of things to consider, and even reconsider, before you take on the title of home owner. Here are five things that should help to prepare you for your home-buying journey.
- Make Sure You Can Afford Buying a Home
For this step, you should create a written household budget. A lender’s approval for “x” amount doesn’t mean you have to spend “x” amount. That’s just what their willing to let you borrow. The house you choose should not be more than one-fourth of your monthly income, after taxes. Life happens before and after you buy a home. Appliances break. Roofs leak. Cars break down. You could lose your job. If an emergency occurs, and you’re barely scraping together your house payment every month, then you’ll be in a lot of trouble. If the houses you like just don’t fit into that budget, then it’s okay, and recommended, to be patient. Ever heard of Dave Ramsey? If you need help with creating a budget, then here is a good place to start: www.daveramsey.com
- Save Up for a Solid Down Payment
VA loans might not require a down payment, and FHA loans offer financing with down payments as low as 3.5%, but the cons outweigh the pros in both cases. You should try to have at least 10% saved for a down payment before buying a home. Why? For starters, you’ll be able to lower your monthly payment. Second, you will have more buying power. If a buyer is choosing between two offers: One with an FHA loan and 3.5% down, and the other with a standard loan at 10% down, they will almost always take the standard loan, even if it’s at a lesser price. FHA & VA requirements are very strict, so the seller may have to take on added costs, such as seller’s assistance or home repairs. Finally, if you’re able to save up 20% for your down payment, you’ll avoid private mortgage insurance (PMI), which is tacked onto your loan amount. Save up, and you’ll win every time!
- Hire a Good Real Estate Agent (how the heck is this third on a real estate agent’s list?!)
Once you’ve done all of the painful work of getting your finances in order, you’ll be able to start scouting real estate agents. At this stage, it’s important to choose a Realtor® who knows the market, and will go to bat for you. You should think of your agent as part of the home-buying package, and interview him/her as such. A bad agent just wants to get you into a home so he/she can collect commission. I will make sure that you’re informed, and that you have the right tools available to you at all times. I’ll also tell you which houses are solid investments, and which ones will lose value over time.
- Buy With the Future in Mind
Are you currently in a long-term relationship? Consult your significant other first. Are you planning to have children? Consider yard space, extra rooms, school districts, and neighborhood safety. You should always buy a home with the future in mind, or else the house you love could become your worst enemy later. It’s also important to see a house for what it can be, rather than what it is now. If you don’t like the wall colors, then you can paint. If you don’t like the flooring, then you can replace it. Don’t let your emotions cloud your judgment. I’ve been working in real estate for a long time, so I will make sure that you’re buying a home with good bones, and great potential.
- Be Patient
Just because you’re able to buy a home now doesn’t mean that you should buy a home. Unfortunately, some buyers feel pressured to “buy now!” simply because they’re ready to own a home. If you buy simply because it’s available and affordable, then you’re making a huge mistake. Don’t settle for a house you like; wait for the home you love.
You’re sure to have more questions about buying your home, and there are a lot more things to discuss. That’s why I am never too busy to meet with you, talk with you over the phone, or even message back-and-forth with you. I’d love to help get you into the home that you deserve. I promise that, when you’re ready to buy a home, I will be there to guide you along every step of the way.
Contact me today, and find the best home for you.