Typically, most buyers are out and about buying homes in the Spring market. The Spring market around here starts as early as February. But there are already homes coming on the market, and you could be the “early bird” buyer who gets the home!
Here’s how to get started:
Look at your Finances & Budget
- Completely analyze your finances and collect any necessary documents. Your lender will need to review your W2′s or 1099′s, bank statements, proof of current income, copies of tax returns, and brokerage account statements.
- Don’t do anything now that could damage your credit score. Postpone making any big purchases like a car or rack up a slew of credit card debt.
- Ensure you keep saving money and curtail your spending to have enough for a down payment, closing costs, and more. Owning a home requires extra money for maintenance costs, utilities, condo fees, etc.
- Go through your budget to determine what you can afford (and feel comfortable paying) monthly toward your new home. Focus more on your monthly budget and desired payments and less on the purchase price right now.
Get Pre-Approved for a Loan
You must get pre-approved BEFORE you get too far into looking at homes (Don’t mix this up with pre-qualified!).
Sellers like to work with buyers who are already pre-approved for a loan. It means you’re a serious buyer and can make a purchase.
Once you’re pre-approved for a loan by a lender, you will know:
- how much house you can afford
- what your down payment requirements are (you can buy a home with as little as 3% down nowadays), and
- what your monthly mortgage payments could be as well as expected closing costs.
To do this, meet with a mortgage lender who can explain different loan products and their requirements (such as credit score and down payment) and give you an overview of current interest rates and their future outlook.
The better your financial picture, the better the rate and loan … it’s that simple. However, most people are approved for more than they want to spend every month, so be sure to understand the correlation between your price point and your monthly payment.
Tell your lender you are interested in understanding what price range to look in based on the monthly payments you feel comfortable with.
Explore and Window Shop
Before buying a home, you need to understand your needs and wants. Take these steps to help you learn what you like and don’t like so you’re all set (and confident!) when it comes time for serious house hunting and the rush of putting in an offer.
Think hard about your day-to-day life and what you want and need in your home. It helps to make a list of your must-haves (e.g., three bedrooms or a large primary suite) and your deal-breakers (e.g., no eat-in kitchen or no garage).
Get to know the neighborhoods in which you are considering buying. Go there for normal activities such as coffee with friends or grocery shopping. Try some local restaurants and see what it’s like there at night. You can even take your children to different playgrounds. Your agent can also guide you on other neighborhoods that are more affordable but have the same feel and amenities you are looking for.
Start by casually visiting open houses to get a sense of pricing for the space, location, and features of homes. Think of this as window shopping, but leave the wallet at home! This will help educate you about the local market and how much of your “wants and needs” are realistic within your budget. You can also view homes for sale online to get a sense of what you like and don’t like, your locations, and what’s in your budget.
It’s the Final Countdown
Before you get swept up in the house-hunting process, it’s time to stop and ask yourself some serious questions.
Hopefully, you understand your personal needs and budget at this point, but it’s good to do some self-reflection to determine whether moving forward with a home purchase is right for you at this time.
Is your lifestyle ready for homeownership? Do you plan to be in the area for at least another five years? Is your job stable and income consistent?
It doesn’t hurt to put some feelers out and realize that you might need to wait another year before you are comfortable or ready to settle down. Having your own timetable is okay, and your agent will understand.
When You’re Ready!
If you know you want to buy a home this year, let’s get started before other buyers make offers. Reach out to me so we can make a plan—this is an essential step BEFORE going out to see homes. Especially if you also need to sell a home, we must time everything perfectly so you don’t end up with two or no homes. It’s never too early to start the planning process, and I’m ready when you are. Email me at kia@kiapattonrealty.com to get started.
