Purchasing your first property can feel daunting; having a team of specialists to walk through the process makes all the difference. As a real estate agent, my mission is to educate so that my clients feel empowered at every step of the homebuying journey.
As a buyer in today’s market, you need to be flexible, open, and prepared. Here is my step by step guide to becoming a homeowner:
The first step is developing a budget and defining your monthly fixed costs. If you’ve already created a budget and a monthly savings goal, kudos! — you’re well on your way!
Open a savings account and label it “home.” Stash your excess funds in the account before you are tempted to spend them in other places. Then add extra funds at the end of the month after you’ve implemented cost-saving strategies like changing your grocery shopping habits.
I recommend saving at least 5% of your desired home purchase price and $10,000 for closing costs. (Closing costs are lender fees, escrow fees, and property taxes for the year.)
Pro Tip: Don’t forget to consider your credit score — if you are buying with another person, the lender will use the lowest score of the two.
Meet with your agent to learn about the process and discuss priorities for your future home. My shortlist of key factors to consider:
Desired Home & Lot Size
Timeline for Moving
Bedrooms / Bathrooms
Needs vs. Wants
Desired Price Range
Establish Mutual Expectations
Meet with your mortgage lender to determine the price range that you are pre-approved for. I encourage you to work with a lender that will educate you on all the costs associated with purchasing. Out of pocket costs, in addition to the down payment and closing costs, include inspections and appraisal fees. Inspection fees can be variable, but I recommend budgeting $1,000.
Start Your Home Search With Your Agent
Using the guidelines you have identified together, your buyer’s agent will set up a property search for you in your area’s proprietary Multiple Listing Service (MLS). That system has vital information to each listing not visible by the public only available to licensed agents.
Finding the right home is an exciting journey. It is important to realize that some strategic scheduling is part of the process and that constant communication is key to ensuring you are able to spend the most efficient time touring properties. Communicate with your buyer’s agent if you have plans to attend an open house so that your agent can research the property for you. In today’s hot markets where inventory is low, time is of the essence!
Once you find a home that meets your needs, it’s time to write an offer. Working on the best strategies to make your offer stand out is essential. Make sure you choose a buyer’s agent that is a skilled negotiator and can help you write the most attractive offer and guide you through negotiations. I’ve developed a contingency cheat sheet to help my buyers win in competitive offer situations.
I hope this article makes you feel empowered to start the journey. Happy home ownership planning my friends! If you want to learn more about the buying process, please reach out to me here.