So you’re ready to get the ball rolling on buying a home. Congratulations! As a licensed Realtor with 21+ years of real estate experience, I bring you this helpful 20-point checklist for buying a home.
Buying a home is a big decision and there are many important steps to consider, from being sure you have weighed the legal and tax benefits/consequences to making sure you are doing your due diligence and research on the location and property itself.
Whether you have bought a home before or you are a first-time homebuyer, it can be easy to forget some of these details. So, we have compiled this list of tips for buying a home!
These home buying tips aren’t all-inclusive but will hopefully give you a broad perspective and help make your house purchase go more smoothly and worry-free.
This is for informational purposes only and should not be considered as financial advice.
Getting Started: Preparations To Buy A Home
There are a few steps to consider before you head out and start looking at properties to consider buying.
You need to have a game plan, a strategy. You need to get your ducks in a row so to speak. Before you even look at the first house, you should know the process and what to expect. You might be surprised that many sellers and their real estate brokers won’t even consider an offer from you if you haven’t been through the pre-approval process or have a “proof of funds” statement when paying cash.
Tips 1-5 will help lay the foundation.
1. Get Professional Help
Having a reputable lender and experienced real estate broker in your corner to start will be key to protecting your interests and negotiating the best terms for your circumstances. They understand the process and will be able to guide you through all the twists and turns, from gathering all of your needed documents to advising you on property benefits or issues.
PROFESSIONAL help is strongly advised. We know mom, dad, siblings or friends want the best for us, and they all have an opinion. It’s like having a baby… everyone has advice, but it doesn’t necessarily translate to your particular situation.
Professionals have been through the process hundreds if not thousands of times and most likely have an answer or solution to almost every scenario. They are as close to a fortune-teller as you can get and good professionals are amazing problem solvers!
2. Get Pre-Approved
This will help you narrow down your search, so you aren’t wasting time looking at homes that are beyond your price range.
Being pre-approved lets sellers know that you are serious about buying a home. Oftentimes, the seller is more willing to negotiate with someone who has been pre-approved.
It is highly advised to be sure you are working with a REPUTABLE lender that is local in your area. They understand your local market and will be quicker to respond if issues or questions arise. Often your real estate broker will be able to point out the good lenders from the bad.
3. Know Your Budget
Just because you are approved for a certain price or payment doesn’t necessarily mean you are comfortable with it or should commit to a home that is at the top of your budget.
Keep in mind that homes require upkeep and ongoing maintenance. Taxes can and do go up and so do other costs like homeowners insurance.
Don’t stretch too thin. Make sure you can budget 1%-5% of the purchase price per year toward home maintenance. Also, you need to consider whether or not you want to sacrifice vacations, daily coffees, date nights, etc. to live in your “dream home”.
4. Consider Your Needs vs. Wants
Be realistic in what you need versus what you want. Do you “need” a gourmet kitchen and a pool or do you “need” four bedrooms within a twenty-minute drive to work. Your budget may or may not have room for the wish list. Maybe you can make a three-bedroom home with a loft or flex room work instead of having that fourth bedroom. Keep an open mind!
5. Understand That The “Perfect” House Doesn’t Exist
Realistically, you will have to compromise on at least a couple of needs or wants. If you find a house that has 80-90% of your needs and wants, consider this reasonable! You may have to consider homes that are slightly outside of your desired area, maybe a little smaller than you wanted or maybe dated.
The House Hunt
You now have your “team” in place and are confident of your budget as well as what you need versus the “wish list”. It’s time to get out and start looking at homes!
Tips 6-10 will help you with the house hunt.
6. Plan To Be Flexible
In some markets, houses go under contract very quickly. If this is the case, you may have to go look at home within the first 24-48 hours before it goes under contract. You will also have to consider any time constraints the seller puts in place. They may only allow showings on certain days or times.
Plan to look at no more than 3-5 houses in one day or they start to run together, and you will be tired and exhausted. House hunting is not always as “fun” as it sounds!
7. Google Is Your Friend
Do an address and/or neighborhood search of the house you are interested in before looking. You might find news stories or information about the house or neighborhood that deter you from that location or you might find that it is exactly what you are looking for.
You can look up local crime statistics, school reviews, upcoming construction projects. You might be surprised how much information you will find!
8. Use Google Maps
Look at the satellite map to see what is in close proximity to the property. Is there a water treatment facility down the street or a landfill that could make for unpleasant smells during family barbeques? Maybe it is a shooting range or a hospital with a helicopter pad. Are you okay with that?
You can also use maps to calculate distances to shopping, work, etc. Make sure you are okay with what you see!
9. Drive The Neighborhoods
If you find a home or neighborhood you are interested in, drive it! Drive around on a weekend to see who is out and about walking, doing yard work, playing, etc. Can you see yourself living there? Maybe you want an active community or maybe you are hoping for a quiet retirement community? Stop and chat with some neighbors to get a feel for the community.
10. Check Services
Make sure you are satisfied with the service providers and the quality of those services. Maybe the only option for reliable internet is satellite. Or perhaps, water is more expensive than the neighborhood in another area. Some people assume that services are similar to what they already have but end up with a rude awakening in a new area. It’s also best when viewing a home to take a quick look to make sure there is cell reception in the house.
The Transaction – Offer Accepted, Now What?
You have looked at homes, researched the neighborhood and services, and think you have found “the one”. It’s time to make the offer and go under contract!
Tips 11-15 guide you through the transaction process.
11. Read Before You Sign The Offer
Be sure to read and make an effort to understand the contract and disclosures you are about to sign! The paperwork can be overwhelming, but it is crucial you understand what you are agreeing to. Ask your professionals for clarification if you don’t understand. Don’t over-promise what you are willing to give and end up with “buyer remorse”.
12. Deadlines Are Important
Your offer gets accepted! You will have several deadlines that your lender and real estate broker will guide you through. These deadlines offer you legal protection and that protection is often lost if you miss a deadline.
13. Home Inspection, Appraisal, and Insurance
A professional inspector will be able to point out any issues that may not have been disclosed in the paperwork. The appraisal will assess the value of the home, so you and your lender know if what you offered is within market value or not. And talking to your insurance agent will let you know what the cost of insurance will be for the home. You don’t want any surprises!
14. Ongoing Negotiations
There will be several places along the way that additional negotiations can take place. Maybe the inspection uncovered something that needs repairing or the appraisal came in too low. Patience and communication with your “team” are key to negotiating through any unforeseen issues. Remember to keep emotions in check and understand that this is just as stressful for the seller as it is for you.
15. Prepare For Closing
Before you sign your closing documents and get the keys, you will want to make sure you do a final inspection of the home to be sure no damage has occurred during the contract period. You will also want to call to set up services for your new home. Your real estate broker will help get you started. Once the appraisal is done and you are satisfied with inspections and repairs, you can find your moving company!
Closing To Move In
The contract period is a series of steps that make sure you are comfortable with your decision and ready to move forward to making the home your own. All of the previous steps get you to the “closing table” where you sign your lender and title documents, making you the official new owner.
Tips 16-20 give you a guide on what to expect for closing.
16. Day Of Closing
You will be expected to sign a large package of documents. Make sure to review the documents with your lender and broker to be sure you understand what you are signing. It can be overwhelming, but your team will be sure to explain anything you have questions about.
17. What You Need
Be sure you have your ID, your funds for closing and have uninterrupted time. The process can take between 1-2 hours. It is advised to leave children at home or in care.
18. Gather Final Intel From Seller
This is probably the last chance you will get to ask for information from the seller. Be sure you ask about the trash pickup schedule, perhaps where the mailbox or bus stop is or who they used to service the lawn or sprinkler system if applicable. Ask if there is one neighbor that is a reliable resource if you need assistance for anything.
19. Change Of Address
If you haven’t already, be sure you have submitted a change of address notice to the post office and to all of your family and friends. You can do a change of address notice online with the post office at no charge. Also be sure to go through all of your accounts (banks, store cards, etc.) to be sure your new address is updated in their system.
20. Moving In
It is advisable to change the locks on the doors since you may not know if there are keys still with a neighbor, etc. Also, consider changing out smoke detector batteries for good measure. Then go introduce yourself to the neighbors and schedule your housewarming party!
Buying a home is one of the largest financial decisions you will make but can also be one of the most rewarding.
For these reasons, the process is often a very emotional one. You are excited about the home, new possibilities, or lifestyle you will create and that can lead to making emotion-filled decisions or forgetting/skipping important steps in the buying process.
Having your lender and real estate broker as a sounding board or voice of experience and reason will help keep you on the right track. Hopefully, these tips will help give you some guidance and a little bit more understanding of the importance of each step in the process.