Wondering how to buy a home? Buying a home can seem complicated and confusing, especially if you’ve never gone through it before. From understanding local market trends to securing financing, there are many steps along the way to finding your dream home.

Key Takeaways

  • It’s important to define your homeownership goals before house-hunting. Knowing what your goals are will help you narrow down a location, budget, and desired features. 

  • The decision to buy a house depends on various factors, including personal preferences, financial stability, and long-term goals. 

  • To set your home-buying budget, you’ll first need to understand your finances. Begin by evaluating your income, expenses, debts, and savings. 

  • It’s important to have home buyer representation when purchasing a home. A realtor has an in-depth understanding of the local area and its housing market trends.

  • Top realtors typically have a successful track record built up after years in the industry. Brand new agents should at least have a strong familiarity with the local market.

What Should I Know Before House Hunting?

What Are My Homeownership Goals?

It’s important to define your homeownership goals before house-hunting. Knowing what your goals are will help you narrow down a location, budget, and desired features. 

Ask yourself why you’re looking for a new home. Do you have any lifestyle goals that require a specific type of home? For example, if you have pets, you might need a home with a larger yard. Or if you have children, you’ll likely want to find a home close to a good school.

Your exact homeownership goals will depend on your unique circumstances, but some common ones are:

  • Create financial stability

  • Have personal stability and a sense of community

  • Being able to personalize your living space

  • Long-term investment potential

  • Enjoying more space with a larger yard and a larger home

What Are My Location and Neighborhood Preferences?

Part of setting up your homeownership goals will involve deciding what your neighborhood preferences are. This will depend on your lifestyle. For example, families with children will want to think about the local school district. This means researching the quality of schools in the area. 

If you commute to a nearby city, you’ll want to consider neighborhoods that are close to your job. Depending on how far you’re willing to commute, you may end up sacrificing certain characteristics in your home in exchange for its location.

Crime rates are another neighborhood preference that’s important to many home buyers. Most buyers aim to find a home that’s in a location with low rates of violent crime and property crime.

Lastly, consider whether or not you want a location that’s close to essential services and amenities. Think about how far you want to live from places like hospitals, grocery stores, restaurants, and shopping centers.

How Do I Set My Home Buying Budget?

Understanding Your Finances

To set your home-buying budget, you’ll first need to understand your finances. Begin by evaluating your income, expenses, debts, and savings. Be sure to consider potential changes, like a new job or family growth. 

In addition, calculate your debt-to-income ratio by dividing monthly debt payments by income— this is a crucial factor for lenders assessing your ability to handle mortgage payments. 

After you’ve studied your finances, use that information to set your budget. Start by determining a comfortable down payment amount. 20% is typically common, but there are loan programs that allow you to pay less, especially if you’re a first-time buyer. 

When estimating a monthly mortgage amount, be sure to consider additional costs aside from the price of the home itself. For example, closing fees, property taxes, insurance, and maintenance costs.

Getting Mortgage Pre-Approval

Next, connect with a lender for mortgage pre-approval. The lender will consider your creditworthiness and other aspects of your finances before providing an official loan amount. They can also recommend loan programs and interest rates to find the best option for your situation.

Once you’ve been pre-approved, you can then begin house-hunting. Getting pre-approved first is important so that you only look at homes within your budget. Remember to be realistic about your lifestyle and what you can afford to avoid straining your budget. 

Seek advice from real estate professionals, financial advisors, and mortgage experts to figure out what you can comfortably afford.

What Questions Should I Ask Home Sellers?

Ask About the Specifics of the Property

Asking home sellers questions about their properties directly is a great way to learn more about homes you’re interested in. Home sellers can tell you specific details or unique features about the property as well as the local area. 

Some essential questions you can ask home sellers include:

  • What is the square footage of the property? How many bedrooms and bathrooms does the home have?

  • How old is the property, and when was it last renovated? Are there any known issues with the property, such as plumbing or electrical problems? 

  • When were major systems (HVAC, roof, plumbing) last repaired or replaced? Are there warranties for any recent repairs or installations?

  • Will appliances or any furniture items be included in the sale?

  • Does the home have any unique features?

  • What are the average utility costs for the property?

  • Are there any homeowners association (HOA) fees?

  • Why are you moving? Were there any major issues with the property that led to the decision to sell?

  • Have there been any previous insurance claims on the property? 

Ask About the Community and Long-Term Considerations

Aside from the homes you’re interested in, it’s also important to inquire about the surrounding community. This way, you can make sure the area fits with your lifestyle goals and home preferences. You can ask home sellers, realtors, and other community members questions like:

  • What is the neighborhood like? Are there local amenities, like parks or walking trails? How is the safety and security of the area?

  • What school district is the property in, and how are the local schools rated? Are there any private or charter school options in the area?

  • Are there any planned developments or construction projects in the area? If so, how might they impact the community in the future?

  • What amenities are available in the immediate area, such as parks, shopping centers, community centers, and recreational facilities? Are there grocery stores, pharmacies, healthcare facilities, libraries, and other essential services nearby?

  • What are the transportation options, including public transit, highways, and major roads? How long is the average commute to workplaces and popular destinations?

  • Is there a sense of community engagement, and are there local clubs or organizations? Are there community events, festivals, or gatherings that residents participate in?

  • Is the property in a flood zone or prone to natural disasters?

  • Are there any significant noise sources nearby, such as airports, highways, or industrial areas?:

  • Are there any zoning restrictions or planned changes that could affect the property?

How Do I Hire the Best Realtor?

Is it Important to Have Home Buyer Representation? 

Yes, it’s important to have home buyer representation when purchasing a home. A realtor has an in-depth understanding of the local area and its housing market trends. This makes it easy for them to provide invaluable guidance about where you can find homes that align with your budget and preferences. 

They also have the resources to find a wide range of property listings, including off-market opportunities and new construction homes.

On top of that, having a buyer’s agent on your side will help you at the negotiating table. Professional realtors know how to walk the line between getting you a good deal and making sure the home seller is happy with the outcome.

Your realtor will also help you navigate the complex paperwork and legal documents that come along with buying a home, especially if you are a first-time home buyer. They also provide financial advice, streamline the process, schedule viewings, and provide connections to real estate professionals like inspectors and appraisers.

What Credentials Will the Best Realtors Have?

The best realtors typically possess a combination of credentials and qualities that set them apart from their competition. First, they may or may not have chosen to become an official member of the National Association of Realtors (NAR). 

If they did, then they’ll be officially designated as a Realtor®, a status which means they adhere to the NAR’s strict code of ethics and professionalism.

Experience is another crucial factor, with top realtors typically having a successful track record built up after years in the industry. For brand new agents, they should at least have a strong familiarity with the local market and its trends, as well as knowledge of the most popular neighborhoods.

It’s also important to look for a realtor who makes the time to pursue continuing education and training opportunities. This shows they make an effort to stay informed about local real estate laws, market dynamics, and industry best practices. 

You can also look for realtors who have received awards or recognition from real estate or business organizations in the community.

What Questions Should I Ask Before Hiring a Realtor?

While interviewing realtors, you can ask several questions to gauge whether or not they’re a good fit for your needs. Asking these questions allows you to make an informed decision and ensure you have a smooth and stress-free home-buying experience.

  • Do you have any specializations, such as luxury homes, new construction, residential homes, or commercial properties?

  • Can you provide references or client testimonials?

  • What methods of communication do you use with clients? Can we contact you at any time?

  • What is your approach to negotiations?

  • What is your fee structure?

  • Can you walk me through each step of the home-buying process? Can you explain my financing options?

  • Do you have a team or do you work solo?

First Time Buyers