Before you begin your home search it’s necessary to get all of your ducks in a row so you are fully equipped to take on your new role as a homeowner. Begin the process by figuring out what you want and where you’d like to buy. By getting a handle on your objective you can assess whether you’ve got the means to achieve your goal or at least what steps you need to take to get there.
Start basic, what do you want – a house, condo, duplex, multi-unit building? How many bedrooms and bathrooms? What’s the square footage and outdoor space looking like? How much work are you willing to do, or are you opposed to remodeling? Is storage a major element – closet space, garage, attic, basement? Do you plan to live alone, house your family or are you going to acquire tenants? Envision your ideal property and note all of the components that go along with it, then ask where you foresee the property’s location.
Do you see yourself in a suburb, secluded area or city setting? Consider your commute – do you need to be close to freeway access or public transportation? Is walkability an important factor? What kinds of activities and amenities do you want nearby – grocery stores, restaurants, shops, gyms, hiking trails, hospitals? Essentially you need to determine the lifestyle you want and then begin researching neighborhoods that accommodate that lifestyle. You should do plenty of investigation on your own but once you’re working with a real estate agent it’s good to ask them for recommendations as they probably have better firsthand knowledge than what you’ve read about online.
So you’ve got your criteria in mind – you know what property and neighborhood you’re aiming for and now you need to see what it takes to obtain it all. Finding a lender you trust is key as you’ll have to be in touch with them frequently from this point until you close escrow. Together you’ll have to do an in-depth examination of your financing so be prepared to pull information for your lender to get a full scope of your price range. They will ask for items such as tax documentation, bank statements and pay stubs from your employer. Your lender will also run the numbers to determine your debt to income ratio as well as your credit score. All of these elements will outline a budgetary number for you to work from and your representative will provide you with a preapproval letter to illustrate that number.
Procuring a preapproval letter means you can start interviewing real estate agents. Set expectations you want to see in your agent such as experience, responsiveness and demeanor. Once you’ve chosen your agent have a conversation with them about what you want and share your preapproval letter with them. If they’re a good agent they will be honest with you and let you know if what you can afford reflects what you want. If all is aligned it’s time to start touring with your agent, but if it doesn’t are you open to adjusting your wish list to adhere to your budget or are you going to hold off on buying until your funds can support your dream property and location?
Organizing all elements necessary to buy requires a lot of legwork, but those who are ready will make the effort to get prepared. Thankfully loan officers and real estate agents are in place to aid you through the process to make it more straightforward and they will do everything in their power to help you get what you want. Just keep in mind loan officers and real estate agents don’t get paid unless escrow closes, so be respectful of their time and only work with them if you are serious.