Buying a Home 101 series – Week 6
This step-by-step series will take you through the entire home-buying process — from finding a buyer’s agent to settlement day, and all the details in between. Every first-time buyer will find this information-packed series easy to follow and understand. Make sure to tune in for the next few weeks!
Now on to the part you’ve been waiting for! SHOPPING!! But before we start intrusively scouting other people’s homes, let’s take a look at our checklist first.
You’ll need to carefully consider your budget, location ideas, and the criteria (number of bedrooms, etc.) of your future home. By doing all this prep work, your house hunting experience can be so much more fun and hopefully low stress.
These search strategies also will help you make it more enjoyable and easier overall. Better yet, you’ll have the confidence and the ability to put in an offer and, ultimately, have a successful closing.
First, Understand the Process
Your first step is to become educated about buying a home by meeting with an agent who will go over all the steps with you. As a first-time buyer, you don’t want to rush ahead to house hunting until you know about the entire process from beginning to end.
Check out How to Find the Very Best Buyer’s Agent (LINK to that article on your website!!!!!!!!!) in this Buying a Home 101 series for more details on working with an agent.
Next, Know Your Three “Buckets”
You want to house hunt with a plan and a purpose, and that’s were these three “buckets” play a key role – budget, location, and criteria.
Using this analogy of three buckets, each and every factor you need to consider when house hunting fits into one of these three buckets. Each bucket doesn’t have to be equal in “weight” but the total weight combined of the three buckets must balance the scale they sit on. That’s your ultimate goal.
It’s also important for you to understand the following two requirements before you start viewing homes:
• Know where you are with the specifics for each one of the three – budget, location, and criteria; and
• Know how each one can affect or influence the others in your search for a home.
Undertaking this step and seeing how each is linked is essential! If you “pour” too much in one bucket, you’ll need to adjust another bucket, and so on.
For example, if you need to lower your budget, then you might need to change the location if homes are more expensive there OR you might have to consider getting a smaller home (fewer criteria) if you want the location to stay the same with that new budget. As you can see, one adjustment leads to another adjustment!
Looking at budget, location, and criteria in this way can help you find the alignment you are seeking, which can lead you to a home that is affordable, in a location that meets your needs, and that satisfies most of your wants.
Let’s do a review of the three buckets:
1. Budget — How Much Can You Really Afford?
One of the first steps before you house hunt is to get pre-approved for a mortgage by a lender. Being “pre-approved” carries more weight with sellers than being “pre-qualified.”
Going through this process requires you to know your monthly budget and what you can afford to pay toward a mortgage. You should emphasize monthly mortgage payments, first and foremost, before you move on to price range.
Once you’re pre-approved, you’ll have narrowed down a price range you can afford. Then you can search for homes within your approved amount. (But remember, even if you are approved for more by a lender, stick to your own monthly budget requirements!)
You can review this budget process in two previous articles from our series: Do the Math – A Mortgage You Can Afford (LINK!!!!!) and 5 Steps to Obtaining a Mortgage. (LINK!!!!!!!!!!)
2. Location – What Lifestyle Are You Looking For?
Once you’ve got your budget done, it’s time to move on to location, location, location.
Remember that the location of your home will affect everything about your lifestyle and day-to-day life – from whether it has urban conveniences or will mean a longer commute to work. So always keep that in mind.
First figure out WHERE you want to live. Which specific neighborhood or even another similar neighborhood do you picture yourself living in?
Think about the characteristics of a neighborhood and ask yourself why is that important to you since it could be replicated it in a similar, less expensive neighborhood. Don’t be hesitant to even look at another similar neighborhood that wasn’t originally on your radar. It could meet your wants and needs too!
Really think about your daily life. Love walking to work and don’t want that to change? Then, that becomes a “must” and some of your criteria could change (size, condition, etc.). Then you know you are willing to buy a smaller, more affordable home if you must live in a neighborhood you absolutely love near work.
There are certain factors in a location – both desirable and undesirable — that you should consider when you look at a home for yourself and for resale value. Does the neighborhood have good schools? Is the home on a busy corner lot?
Also, keep in mind that revitalizing neighborhoods can be on your list if “desirable” neighborhoods are out of your price range. An up-and-coming neighborhood could be a bargain if you time it right, but you do need to tread carefully.
Once you narrow down a location, your budget will determine what type of home you can afford in that particular neighborhood – such as a detached home, townhome or condo unit.
Not happy with the results? Then you will need to adjust your “buckets.” Decide whether it makes sense to change neighborhoods, tweak your budget a bit, or maybe rethink your list of “must haves.”
3. Criteria – What Do You Want and Need in a Home?
When we say criteria, we mean things like how big, how many bedrooms, condition, etc. Aspects about the home itself you require. It can include both needs and wants.
You should have a written a list of your needs and wants in a home from when you first met with your agent. Now is the time to look over that list again carefully and REMEMBER these items!!
It’s very easy to get sidetracked once you start looking at homes and forget what your deal breakers are in a home.
This list will make your search much more efficient and keep you focused on what is important to you and your family in a home, in a location, or in a lifestyle that you picture yourself in every day.
You might never find the “perfect” home but you must decide what you need and also want in your first home.
Remember that your needs are different than your wants. You need two bathrooms but want a master bath and suite. You need three bedrooms but a fourth bedroom would be nice for guests. See the difference.
It definitely can be hard to choose what you prefer more (location or three bedrooms) or what you’re willing to do without (large backyard or updated, renovated kitchen). That’s why you need to keep referring to your list of must-haves and deal breakers to stay focused.
Go back and review How Your Needs and Desires Lead to “Home Sweet Home” (LINK!!!!!!!!) to get more details.
Then, Put It All Together
Now that you understand the three buckets – budget, location, and criteria – it’s time to put them all together. We’ve shown you a little bit of how you need to adjust each bucket at times in order to find a home. Let’s now go into a bit more detail.
Depending on how long your plan to live in your new home, you should rank the three buckets from most to least important. Yes, they are all important, but what is YOUR #1?
Now You’re Ready — House Hunting Basics
Now that you’ve got your three buckets aligned (or know how to keep adjusting them), you are ready to actually go see homes. And, more importantly, will have the confidence to put in an offer when you see one!
Here are basic tips for this part of the process:
Stay Organized and Focused Each Time. Keep a record of all your research and handouts on the homes you visit. It’s very important to set up a system that works for you so you can easily refer back to homes that day or the next.
Write down comments of your likes, dislikes and any other helpful, more detailed observations. Use a system that you know works for you, whether it’s on paper, in your Notes app or whatever. Do it as soon as you’re done or during a viewing. Did you get a positive first reaction walking in there? Did you enjoy the brightly-lit rooms? Did you smell odors from a nearby restaurant?
Don’t forget to take lots of pictures or videos to help jolt your memory when a day of house hunting is done. You’ll be amazed that you start to forget what you’ve seen in certain homes: beautiful hardwood floors, amazing fireplace or a view of a dumpster. Take a picture of the front door/home number of each home first so you know the pictures/videos that follow belong to that home.
If you do this, then you can easily go through your notes and pictures to compare costs, neighborhoods, and home features. This also helps you stay focused on your needs and wants. And if you do need to make an offer quickly, you’ll have more confidence in your decision since you have your research right in front of you.
Create a Schedule That Works for You. This is sometimes the hardest part of the entire process because life gets BUSY. I try my best to be available when my clients are available so nobody has to miss out on any homes that may go quickly. I will say, the most homes I like to show in a single day is topped at six. I have found that if I go above six homes, they all start to string together and everyone (myself included) starts to get hangry.
Communicate With Your Agent (and Yourself). Honest communication is essential. Express your likes and dislikes after seeing a home. Don’t be afraid to tell your agent what you really think since they won’t take it personally … they don’t own the home!
If you are more open with your agent, then they will know your personality better and can identify homes that will appeal to you. They will get a better sense of what you are looking for after each visit when you are honest with them.
Never feel guilty or pressured! Even if you may see a home that is in pristine condition and move-in ready, don’t be afraid to say this isn’t the home for you if it doesn’t meet one of your “must-haves” for some reason.
Or, you may be interested in a home that’s a major “fixer upper” or is being sold “as is,” which means the seller has no intention to do any repairs. Your agent can help you determine if you are ready to undertake such a project in order to become a homeowner.
By following these smart house hunting strategies and knowing your three “buckets,” you will find your new home in no time (and maybe have some fun along the way)!
I take a completely different approach to home buying, as you can see with my three buckets analogy. Hopefully this helps you think through all the criteria flowing around in your head. If you want to talk more about how to organize your thoughts when it comes to buying a home, I’d love to talk with you! Email me and let’s make what’s in your head a reality!
Stay tuned for next week’s Make a Winning Offer Without Going Overboard. You’ll get the rundown on figuring out your offer price, your earnest money deposit, and some clever negotiation tactics in this eighth article for our Buying a Home 101 series.
Buy
My Listings
Sell
