Thinking about moving? If your current home is too large or too small, in an area you no longer like, or you are just craving a fresh start, it may be time to plan a move.
As stressful as buying a home seems, with strategic planning you can move through the process more quickly and smoothly. We have gathered information from loan officers, real estate agents, and buyers to compile the ultimate homebuying checklist.
Hire an Awesome Real Estate Agent
Finding an experienced, dedicated real estate agent will boost your chances of enjoying a smooth homebuying process. They listen to your wants and needs, keep your price range in mind, and are adept at the negotiation process. Your agent is your best friend during your homebuying journey, and you’ll be relying on him or her to guide you with good advice and helpful information. Take the time to find one who is a good fit for you!
Get Pre-Approved for a Mortgage
Meet with a loan originator early on to discuss your options for a mortgage loan. Complete the application and agree to have your credit checked so you can get pre-approved. (Remember, it is good practice to double-check the accuracy of your credit report prior to the lender pulling for pre-approval, just in case you need to make corrections with the credit bureaus.) Being able to show that you’re already approved will give you a leg up when you find a house and begin negotiating with the sellers. Your mortgage lender can also assist you with the next item on the list…
Determine Your Budget
Lay out your monthly bills, debts, and any other financial obligations. Compare that to your income and decide how much you can spend on a house. Don’t automatically buy as much house as you think you can afford, especially if you’re currently renting. Factor homeowner association fees (HOAs), insurance, and taxes into your budget. The last thing you want to do is buy a home you can barely pay for and be forced to scrimp by every month.
Double Down on Saving Money
Hopefully you’ve already built up a tidy nest egg of money to use for your down payment. Now it’s time to start adding to it as fast as possible. The bigger the down payment, the less chance you’ll need to pay for costly mortgage insurance and the more loans available to you. Cut out all extra spending, chop your cable and cell phone packages, and postpone big shopping trips, new vehicles, and exotic vacations. Stash every dime you can get your hands on into your down payment fund.
Pinpoint Your “Must Haves”
Unless you’re blessed with an unlimited budget, you can’t have everything you want in a home. Pick three to five amenities that you want most and tell your real estate agent to keep an eye out for homes that offer them in your price range. The more realistic your expectations, the smoother the process will go for you.
Target the Neighborhoods You Like
Location may not be everything, but it’s a big thing. Choose the areas of town you in which you want to reside and ask your real estate agent to concentrate your search within those areas. If you like hot, trendy neighborhoods, be prepared to spend more or get less.
Find Your Home
Take your time and look at several homes before you make your mind up. Putting pressure on yourself to find a home fast will only stress you out and frustrate you. But once you find a house you really like, be ready to act on it. Have your earnest money ready and make your offer. Your real estate agent can advise you on a reasonable offer and other requests you may need to add to the deal.
Expect to Negotiate
Rarely do buyers and sellers agree to the first offer. Be prepared for them to counter-offer and think about your next move in advance. Don’t be shy about asking for extra concessions if the seller won’t budge on the asking price. This is where your real estate agent’s advice is going to be invaluable. Don’t get frustrated or give up, even if you end up in a bidding war. While negotiating is often uncomfortable, it will be worth it in the end.
Avoid Big Purchases
Once you and the seller agree to terms, it’s smooth sailing to closing! Well, maybe not. Loan officers pull your credit on the front end, but they also check it again right before closing to see if you’ve acquired any new debt. A furniture spending spree funded with credit cards, or a new vehicle to park in your new driveway, can end up knocking your ratios off and hindering you from getting your mortgage.
Take everything you need for closing and leave early enough to get there on time. Be ready to sign your name dozens of times and pay the closing costs via cashier’s check (if that was the terms that were negotiated). If there are any unexpected issues, try to stay calm and negotiate your way through them.
This homebuyer checklist is a valuable tool you can use to stay on track and make progress during your buying journey. Use it faithfully and soon you’ll have your perfect house that didn’t break your budget.