So you think you want to buy a house? Congrats! Don’t start packing the china just yet. There are lots of things to consider before you take the plunge into homeownership. I bought my first home just weeks before my husband and I met (oops), and we are now in the process of buying our first home together. This series documents my experiences and tips for making this major purchase go as smoothly as possible.
The very first thing to do is to determine what you can afford. I have found that the best way to really know is to do a thorough household budget (you should be doing this monthly anyway.) There are many online calculators to choose from, but you know your situation best. This will give you an idea of what monthly payment would make you feel most comfortable. Remember to account for costs like homeowner’s insurance, property taxes, and private mortgage insurance (PMI is typically required if your down payment is less than 20% of the purchase price of your home). Once you have an idea of the monthly payment you can afford, it’s wise to consult with a mortgage lender to get pre-approved and discuss your loan options. There is nothing worse than finding the perfect house then learning that it’s out of your price range! I’ll discuss financing in more detail in the next post.
I would also advise getting a copy of your credit report from all three major reporting bureaus before getting too deep into the process. This will give you a chance to correct any errors so that they don’t cause problems with your financing. Federal law authorizes you to obtain one free credit report per year from each of the major reporting bureaus. You can download these reports from www.annualcreditreport.com. Don’t worry about paying the extra fee for your credit score, your mortgage lender will be pulling it for you and can give it to you.
Next, determine what you need from a home. I like to make a list of my “must-haves” and another one with my “want-to-haves”. Consider what school district you would like to be in and how your family may change over the next few years so that you can choose a home that will work for you now and into the future. It’s rare to find a home that meets all of your needs and wants (in your price range at least), so consider what you might be willing to compromise on to achieve the majority of your list and which items are highest priority. Most of us, me included, struggle with this part!
The next step is super important!!!! Take all of the things you just did, and find a great realtor! I watch A LOT of HGTV. I will admit that when a friend recommended that I call our friend Chelsea Meng, I was skeptical. I like to be in control and felt confident that I could do this on my own. Boy was I wrong. It became obvious pretty quickly that a realtor was real asset. Chelsea was able to pull MLS listings for homes meeting our specifications and make all of the appointments. She also had extensive knowledge of the local neighborhoods and wasn’t afraid to tell me if a house I found online was in a less than desirable area or in a flood zone. Could I have done that myself? Probably. But it would have taken a significant amount of time and effort. As a mom, I try to be as efficient as possible with my time, and working with an expert was the best choice for me.
There’s a bit of an art to finding the best agent for you. You will get recommendations from everyone you meet. For me, Chelsea was a friend of a friend (and is now my friend, too!). We had met once before, and I knew that we think similarly and would work well together. Buying a house typically means lots of communication and sometimes means having to move quickly when things come on the market. Make sure to choose an agent who uses your preferred mode of communication. Your great aunt’s friend who has been in real estate for 60 years is probably a great agent. But, if you prefer texting and immediate email responses, she might not be the right fit for you (No offense to my elders. I know many of you text, which is awesome!). I also wanted an agent with similar taste in homes as I have. I trusted that if she told me a house was worth seeing, she was generally correct. She dealt with my freak outs and my impatience without blinking an eye. She was worth her weight in gold when it came to our home search.
After seeing close to 30 houses, hubby and I are under contract!
Next in the series, I will discuss what we chose and the financial side of becoming a homeowner.