Checklist for Finding the Right House
I'm in the market for a house.
No doubt, this realization sparks both excitement and anxiety in the heart of the average person. Unless you are a seasoned home buyer, real estate professional, or have been planning for this since you were a child, the process can be overwhelming. There are many places to go for help - real estate agents, web sites, television, financial planners, mortgage lenders, etc.
Many people begin the process by house hunting. Either browsing through listings for sale, inquiring about a property they are interested in, or falling in love with a neighborhood.
There are actually many steps that will save you time and money if you plan ahead before you house hunt.
1. Save money for a down payment. Put money aside. Some people just come into a sum of money and decide to use it for this purpose.
2, Be aware of your credit, keep it as clean as possible. Stay away from debt but make sure you create a good credit history.
3. When you are in the market for a house, talk to your credit union, mortgage lender (shop around) find out what kind of mortgage you could comfortably afford. Find out the highest you could comfortably go, and what that costs you each month. Get pre-qualified for a loan, or at best, pre-approved. This will give you a lot of leverage when you want to write an offer. You can always have the amount amended later for the exact price of your offer.
(There are many choices in financing a house purchase: Cash, FHA, VA or Conventional loan, or owner financing)
Only when all of this information is taken care of, then you are ready to go house hunting.
What do you want vs need?
We all have wants and needs. Needs are necessities for living. Wants are nice-to-have, but not necessarily imperative. Everyone has their own definitions of what is a want vs. a need. Sometimes these are dictated by budget. What usually falls under a need is:
3. Some amenities
Once you receive your budget, the next thing you need to determine are your needs, or must-haves.
1. Location: You cannot change where the house is. You may need to be closer to work, farther from or nearer to a city. Within a certain school district. Closer to family. Near public transportation. Near city center. Waterfront. Oceanfront. Farmland. A yard for the children or a dog. No yard, no maintenance.
2. Size/Type: How big is your family? How much space do you need? How many bedrooms, baths, other rooms? What kind of budget do you have and what can you buy for that price? (a real estate agent can answer this question after a market analysis when you've decided the location) What type of house do you want? What kind of dreams do you have? What's available? Do you want a single family home, a condo, a townhouse, a multi-family dwelling? An office? Basement? Yard?
3. What about amenities? New houses? Can I get one already remodeled? With a master suite? New Kitchen? Pool? Sunroom? Landscaped?
4. See several houses so you can compare, but not so many that you see everything on the market and find something wrong with all of them. No house is going to be perfect unless you build it yourself - and that is always an option.
Building a new house is another ballgame...that won't be covered here. But up until this point, its the same. Its just an exercise in patience and budgeting until it's finished.
What NOT to do while house hunting
1. Do not call the number on a for sale sign and see the house with another realtor.
This will give the agent the impression that you are not represented by a real estate agent, and you could give them information that could work against you in negotiations if you end up loving the house. Ask your agent to show you the house.
2. Do not write off a great house because of furnishings and paint or light fixtures.
A really great house can be hiding behind someone else's junk. Sometimes new paint and carpet can make all the difference to a house. Know small fixes from big fixes. Like remodeling a kitchen and all the bathrooms - that would be a big fix.
A house that is too small now will still be too small later.
3. Don't hesitate to be nosy before writing an offer.
Open everything. All closet doors, all included appliances, all crawl spaces. Make sure you've investigated all the doors to make sure you haven't overlooked any rooms and you know the quality of all included appliances.
ALWAYS GET A HOME INSPECTION!
This should give you a place to start on house hunting. This is what I consider to be the most important points in this article:
- Save for the down payment. Typically, a mortgage loan requires a 20% down payment to avoid PMI (Private Mortgage Insurance) which can be very expensive.
- Find a mortgage lender you are comfortable with and get pre-qualified, or at least pre-approved for an amount. Decide what you are really comfortable with paying per month though, regardless of what you have been qualified for.
- I would advise always using a real estate agent for a number of reasons:
a buyer's agent is usually paid for by the seller, a real estate agent knows real estate law and will always look out for the buyer's best interest, a RE agent will have the best access to the market and to other agents, and having an agent represent you in negotiations for the property sale is priceless.
- No matter how well you are versed in construction, or what you think will help you in negotiations, never waive the right to a property inspection! You can back out of a deal based on a huge problem found during that property inspection and it can save you thousands of dollars, if not more.
I hope you find in here some nugget of information that is helpful to you. Good luck in your house hunting and many years of happiness in your new home.