At some point in your lives, you will most likely own a home. Believe it or not, EVERYONE who owns a home was, at some point, a scared, timid, know-it-all or know-absolutely-nothing first time home buyer (trust fund babies who inherited a home are excluded… and LUCKY!).
As a real estate agent who specializes in first time home buyers, and who was once a first time home buyer myself, I get it. Oh man, do I get it. You have a dream. You will find that perfect home, move in, and life will be rainbows and lollipops! Right?
Hang on turbo. Not so fast.
While you will find a home that suits your needs, and someday, maybe rolling in a sea of rainbows and lollipops, there is an entire, long, strenuous, exciting process that goes into buying a home. I don’t want to scare you, but I want to be real. You are going to be dropping a HUGE chunk of money on this dream, and if you aren’t prepared, it can become a disaster of epic proportions both to your bank and your mental psyche.
So, where to start?
Rest easy my friends, because that’s where I come in.
I’m going to provide you with all of the information you need to know on the what-to-do and what-NOT-to-do lists as you begin your home buying journey.
Let’s get started, shall we?
GET YOUR CREDIT IN ORDER
The biggest let-down for first-timers is unrealistic financial expectations. You may think that you can afford that mansion in Beverly Hills because you make well over six figures a year. However, you may have massive amounts of debt; credit cards, student loans, etc… In turn, your credit score may be well under the “safe” zone.
DO – Before you even think about buying a home, look at your credit report and go from there. Try to pay off as much debt as possible and look for ways to raise that credit score. Some foolproof ideas to accomplish such a task are to set up payment reminders to be sure you pay on time, keep balances low on credit cards so that you can pay off the full amount each due date, and set up a time to meet with a financial planner.
DO NOT – As you prepare to buy, it would be an unwise decision to open some new credit cards. Victoria’s Secret can wait. Pay off what you have, don’t close unused credit cards, and the biggest one, DO NOT MISS A PAYMENT! Even missing a payment by one day will lower your score.
MEET WITH A MORTGAGE LENDER
Once you get your finances in order it is time to meet with a lender to figure out just how much home you can afford. These people are experts in their field and can help give you a realistic view of your current financial standing.
DO – Make sure to have the following information available for your mortgage lender: residence history for at least the past two years; employment history for at least the past two years; income history for at least the past two years; asset account balances including checking, savings, investment and retirement accounts; debt payments for credit cards, student loans, car loans, alimony and child support; and confirmation if any part of your down payment will be borrowed. Finally, get a pre-approval letter! Most agents won’t even take you to look at homes until you have been pre-approved.
DO NOT – Many people will start searching for homes before they meet with their lender. Ladies and gentlemen, please don’t do this. You will only have your dreams crushed. Make sure you know what you can afford before you open your home-browsing app. It will save you worlds of disappointment in the end.
CHOOSE A REALTOR
While many people think that the home buying process is a cinch, they soon come to realize, “What the heck were we thinking!?” By working with a REALTOR, you have someone on your side, representing you and your best interests. These people are educated and trained in buying and selling real estate. They know what goes into it. They know how to negotiate. They are the ones who will, not only be your indispensable resource but your therapist as well.
DO – Research REALTORS in your area. Ask friends and family for referrals. Read reviews. This is a person of whom you will be spending massive amounts of time, so interview them. They may have the experience, but do they have the personality? You don’t want to be working with someone who has completely different views than you or a polar opposite personality. Buying a home is a very personal endeavor and this person will be your best friend for the foreseeable future.
DO NOT – You may be in a hurry to buy a home, but don’t hire someone on a whim. Take your time when choosing a REALTOR. And while most good REALTORS will be available to you when you need them, remember this is a person too, with a life and family outside of work. Don’t call them at two in the morning, wait until the next day. Above all, don’t go behind their back. Chances are you have signed a contract with this person and if you breach that contract, there could be legal implications.
LOOKING FOR HOMES
You finally have your finances in order, have your pre-approval letter, and have chosen an awesome REALTOR! YES! Now the fun starts; finding that perfect house! However, just as your REALTOR owes you an array of fiduciary duties, you also owe them the duties of availability and trust.
DO – Looking for homes can be a time-sensitive endeavor. You need to be ready to view homes, especially in a hot market when homes are going fast. You can trust that your REALTOR is working day and night to find you the perfect house, and once they find one that they feel would be of interest to you, don’t skate around the bush. Answer their calls and texts and return their e-mails. They are working for you, so respect that.
DO NOT – Chances are you are scouring the internet day in and day out, and during that time you might come across a home that your REALTOR has not yet noticed. DO NOT try to get in to see the home yourself. It is illegal. Only your realtor can legally access a property. They are the ones who request a showing, and only when the owner agrees, can they set up the time to view the property. Also, be respectful at other homes. Many homes are still being lived in. You are in another’s personal and private space. Act ethically. Do not steal or make a mess of the property.
Conclusion
As you can see, there is quite a bit that goes into buying a home, and by following this list, you will start off on the right track. I wish you the best of luck in the most awesome adventure of your lives; homeownership!
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