Finding the home of your dreams is the result of being well-prepared. Even if your home purchase is a year away, you can jump-start the process by figuring out what you want in a house, including location, and the types of homes that fall into your price range.
Here are some house hunting tips that help you to make the right choice.
Get pre-approved for a home loan
Tracking every fantastic house you find online is exciting. But doing so without knowing your budget can result in disappointment if your bank doesn’t love you the way you love that 3-bedroom Cape Cod that just listed.
Start your house hunting by getting pre-approved for a home loan. You might ask your friends for mortgage lender recommendations, or reach out to a handful of banks. Being pre-approved gives you an idea of what a bank thinks you can afford, and it shows sellers that you are ready to commit. Remember, just because a lender approves you for a certain amount doesn’t mean you should spend that much on your house. You should spend what you can comfortably afford.
You’ll also want to review your savings as well as your income. A larger down payment means less debt and may give you an edge in highly competitive markets. You might be able to spend less than the recommended minimum 20 percent on a down payment if you pay for mortgage insurance, according to The Motley Fool. You’ll also need to take closing costs into determining how much you can afford. Check out our blog post that provides more in-depth information on how to determine how much home you can afford.
Know where you want to live
Your location determines which school your children attend, the length of your commute, how far you’ll travel to a grocery store, and possibly where you’ll socialize — in other words, where and how you’ll live your life.
Consider the type of neighborhood you want. Do you prefer a large gated community, a cozy area with tree-lined sidewalks for your daily jog, or grand acreage with no neighbors? Think about the lifestyle you want. Do you want to be surrounded by nature or live near bars and restaurants? Are there bike lanes? Is there sufficient street lighting?
If you know someone who lives in a neighborhood you like, ask that person for insight. Check out websites like NeighborhoodScout and StreetAdvisor for stats and reviews by locals about their neighborhood.
Few houses or neighborhoods have everything — the perfect location, feel, community, schools, and pricing. But the earlier you start weighing pros and cons, the more time you’ll have to decide what is most important to you about your home’s location.
Assess the must-haves of your dream home
Almost as critical as the location is knowing the specific features and amenities you want and need.
Before your search begins, list features that are absolute must-haves, like the number of bedrooms, yard size, number of stories, age (do you prefer a historic feel or something built in the past decade?), and general condition. Some owners might be willing to tackle a fixer-upper, especially for a lower price-point, while others want something move-in ready.
Then consider which features you’d love to have but can live without, or could add yourself. Maybe you’ve always dreamed of a wrap-around porch, but it’s not a deal-breaker. Maybe your spouse wants a pool but is willing to bend for a two-car garage. Also consider architectural style. The National Association of Realtors (NAR) offers a useful guide to the most common residential styles so you can see what appeals to you most.
Remember your checklist during the home search
More than likely, you’re going to discover your dream home online before ever stepping foot inside. According to a 2017 study conducted by NAR, the majority of home buyers start their hunt online. Only potential buyers age 71 or older turn to a real estate agent first.
So how can you make the most of your online search? Favoriting every home you like probably isn’t a good idea—you can get bogged down by the number of homes that have something attractive. Instead, review your checklist to see if a home meets your criteria. If not, move on. If it does, review the location. Make sure you and your spouse or partner agree, then put it on your list of homes to visit.
When you’re finally ready to tour houses, you’ll have whittled down the options, which will save time and make the decision process much easier.
Canvas the area
Driving around to spot “For sale by owner” signs is a fun way to spend a lazy Sunday, and it’s possible that you’ll find a home you haven’t encountered online. The same 2017 report by the National Association of Realtors found that 49 percent of home buyers sought out yard signs during their house-hunting experience.
You may find homes being sold directly by the owner or a bank (if the home is a foreclosure) instead of a real estate agency—and that could mean less buyer competition and possibly a good price or easier negotiations.
If you see a large number of homes for sale in one area, there could be a reason, like a new construction project nearby that might block views or cause traffic congestion. You could stop and talk to some residents to get the inside scoop.
Visit open houses, for the win
Even if you aren’t buying soon, visiting a few open houses can help align your online results with reality. Photos and virtual tours can’t replace seeing a house in person. For example, you might go to several open houses in the same neighborhood and realize that those beautiful big trees lining the streets are also blocking most of the sunlight in the homes.
You’ll also get a good sense of the home’s dynamics. Spending time at an open house allows you to assess the flow of the home’s layout, open doors, check out the basement, listen for creaks on the stairs, and stand in the yard, soaking in the sights and sounds (good or bad) of the neighborhood.
Other potential buyers could also ask questions that elicit important information from the owner or real estate agent. At the same time, you’ll get an idea of how much interest a house is receiving and how eager people are to buy.
Explore pre-market home listings
Some houses haven’t yet been put up for sale on a multiple listing service (MLS), and are considered pre-market.
Finding a pre-market home could mean less buyer competition. In some cases, you might get wind of someone readying a home for sale, and can negotiate a sale before the home is officially listed.
Traditional MLS sites may not list pre-market homes, but Opendoor’s home listings include many pre-market homes. You can also ask friends, family, and colleagues if they know of anyone who plans to list a house soon or post your request on your social media networks.
Although there’s a lot to consider before buying a home, starting early can be a game-changer. Try to allocate time each week for the process. Set monthly or bi-weekly deadlines. The more time you focus on planning, the easier it will be to recognize your dream home when you see it.
Find a home just right for you
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