Whether you’re a first-time buyer or a seasoned homeowner, searching for a new home can be discouraging at times. In fact, 56% of buyers said that “finding the perfect property” was the most difficult step in the home buying process. Purchasing a home is a significant commitment of your time, effort and money. If done right, it can significantly improve both your current quality of life and your future financial security, so the stakes are high.
Follow these five tips to outline your goals and streamline your search so that you buy your next home with confidence!
TIP 1: Define Your Why
The first tip to finding your ideal home is determining Why you want to move. Do you want more space? Access to better schools? Less maintenance? Or are you tired of throwing money away on rent when you could be building equity? Pinpointing the specific reasons why you want to own can allow you to truly outline your goals for your next home search.
Don’t forget to think about how your circumstances could change during the upcoming years. Do you expect you’ll change jobs? Are you planning to have children or get a pet? A good rule of thumb is to opt for a house that will meet your family’s needs for at least the next five to eight years. Make sure you set your goals accordingly.
TIP 2: Determine Your Budget
Many financial professionals recommend following the “28/36 Rule” to determine how much you can afford to spend on a home. This principle says that you should spend no more than 28% of your gross monthly income on housing expenses (e.g. mortgage, taxes, insurance) and a maximum of 36% of your gross monthly income in your total debt obligations (i.e., housing expenses PLUS any other liabilities, such as a car loans, student loans, credit card debt, etc.).
Of course, the 28/36 rule is a rough guideline. Ultimately, getting pre-approved for a mortgage BEFORE you start shopping for a home will give you a more accurate idea of how much you can borrow and what your max purchase price will be. This will make the home search process most productive for all parties involved!
TIP 3: Pick A Location
In regards to buying a home, WHERE you want to live is just as important as WHAT you decide to purchase. Some things to consider:
How long of a commute to work are you willing to make? What neighborhoods have the best schools? What restaurants, cafes, gyms and grocery stores are nearby? These things will impact your day-to-day life.
Another important factor to consider is how the location is likely to appreciate over time. Deciding on the neighborhood area can raise the profit potential of your home when it is time for you to sell. Look for communities that are well maintained with high home-ownership rates, low crime rates and access to good schools, desired retail establishments and highly sought after employers.
I always say that you should to buy with a seller’s mentality!
TIP 4: Outline Your Wants & Needs
Start with the basics, such as the ideal number of bedrooms, bathrooms and square footage. Do you prefer a one-story or two-story layout? Keep in mind, not every home will include all of your “wants” and “needs”… at least not at the most competitive price points. The reality is, most of us have to make a few compromises when buying a home.
Some buyers can opt for a longer commute to get a larger, newer home in the suburbs. Others are going to sacrifice hardwood floors or even an updated kitchen so that their kids can attend their desired school.
If you’re faced with a tough choice about exactly how or what to compromise in your home search, go back to STEP 1 to remind you of your Why. What exactly were your original goals and motivations for moving? Reminding yourself of your original goals can often provide the clarity that you need.
TIP 5: Find A Real Estate Agent
An experienced real estate agent will remove much of the stress and uncertainty from the home search process. From identifying your wants and needs to selecting the ideal neighborhood that meet your requirements, to negotiating the best deal on your behalf, your real estate agent will be there to assist you every step of the way.
Your real estate agent will setup a customized search that alerts you as soon as a new listing that matches your criteria goes live. A well connected agent will get notified about many of the hot homes even BEFORE they hit on the market.
What’s even best about working with an experienced real estate agent is that they represent you through the entire home buying process at NO COST for you. The home seller pays a buyer agent’s fee through the close of escrow, so you can take advantage of their experience and expertise without paying a dime. No wonder why 87% of buyers choose to purchase their home with the help of an agent!
Whether you plan to purchase today, next month, or in a year, I hope you can use these tips to prepare for your next purchase.
Call us today to schedule a free consultation!