Buying a home, whether it is a first home or a home in a long line of purchases, there are things to consider as a home purchase is typically the most important decision people will make. The meme pokes fun at the process as buyers may feel real estate brokers are going to try and “sell” the first home shown, not usually the case. Buying a home is complex process and from both the buyer’s and the real estate broker’s perspectives and every transaction presents unique and sometimes challenging situations.
Here is a list of 15 items for buyers, whether being first time home buyers or a seasoned investor, to consider and think about when proceeding with a home purchase.
15 Things to Consider when Buying a Home
1. One doesn’t simply buy the first home seen. Many times I’ve heard “I am in love with this house and want to buy it now”. After showing the home, discussing financing, and determining needs that thought usually changes as the home no longer is perfect.
2. Are personal finances in order? Financing is the single most challenging step of buying a home. Lenders require to have proof of funds, steady and current employment (VOE: verification of employment), current on taxes, low debt-to-income ratios, minimal late payments and good credit history. Having finances in order can lead to better lending terms.
3. Is there any flexibility in the personal budget? Just because a person wants to pay $150,000 for a home doesn’t mean that home will be available when it comes time to purchase. It takes time if one is looking for a needle in a haystack so bumping up the budget maybe a way to purchase the right home.
4. Are purchase expectations reasonable? One doesn’t simply find a 4 bedroom home with 2.5 baths with a large yard that’s move in ready for $150,000. Maybe at one time but not now. Determine what is reasonable and how does that fit into the purchasing budget.
5. Be prepared to negotiate. Negotiating is the one constant when purchasing a home. First the initial contract is negotiated, and depending how far the buyer and seller are, it can take some time, then the home inspection, maybe the appraisal, move in dates, rent backs, and a host of other items.
6. Understand that we’re all people. Buyers, sellers, lenders, real estate brokers, home inspectors, appraisers, underwriters, processors, escrow agents, assistants, managing brokers, receptionists, and even the neighbors are all human – for good or for worse. Unless Sauron is the seller and he is forbidding an inspection on a recent Mordor purchase.
7. Everyone has schedules. There will be times when a showing will not work for the buyers, sellers, or the real estate broker due to prior engagement or unseen events. It may seem that someone is being put out yet we would love to accommodate everyone’s schedule but unfortunately we cannot.
8. Voicemail is for a purpose. Voicemail allows people to take messages when they cannot answer the phone which we all can’t at some point or another. Also, when being with one client it is rude to answer the phone just to talk to someone else especially when it can wait.
9. Sometimes not everyone is on point. There are days when I am off, unmotivated, or just spacey. Others, I’m Johnny on the spot and seem to do it all seamlessly. Being a self employed person can make for interesting days and items can come up that takes are mind off the matter at hand.
10. Not every website is correct. Some websites don’t maintain an accurate database and posts on Craigslist can be misleading. Find a trusted site that continually delivers accurate info especially if that site’s info is crosschecked with a real estate broker. It will save a lot of frustration
11. Buying a home may take longer than planned. There are times, like now, when housing inventory is so low that it is harder to find a home that suits needs and wants. Be patient as the result may be surprising.
12. Not everyone’s standards are our own. The condition and upkeep will vary from house to house and there are inevitable times when walking in a home and wonder “how do people live this way?”. It is important to remember that many things are cosmetic and can be changed.
13. Be timely with lender required documents. Lenders, processors, and underwriters will continually ask for updated information throughout the purchase- frustrating yes; life ending no. Its common and when lending money to ensure all has been done to produce a quality loan.
14. Take it seriously. Buying a house isn’t a decision to come by lightly as the term commitment is typically 30 years – unless a person(s) sells before that. Society has become used to the idea of “walking away” when it’s the easy way out of a financial commitment.
15. Try to have fun and enjoy the process. As stressful and frustrating buying a home can be, it is important to have fun. This is a big step in one’s life and having fun may not be a top priority, however, it does make buying a home far more rewarding.
What other items would you consider when buying a home or investment property?