So you're thinking about buying a house...
5 steps to ensure a smooth ride.
Whether it’s your first home or your tenth home, buying a home is a big decision. Financially and mentally you should be prepared. In addition, it’s important to take these steps before you even start shopping, to ensure a smooth ride.
1. Are you ready to own a home?
- Responsibilities: Take into account the responsibilities of home ownership, like mowing your lawn, fixing a plumbing issue, or replacing a furnace.
- Length of Residency: Do you plan to stay in that space? If it’s not a flipper, there’s a “5 year rule” that says if you don’t plan on staying in the home for at least 5 years, you’ll take a hit financially. In a hotter market, like Seattle, this is can be drastically lower.
2. Get your finances in order
- Check your Credit: Credit is a large factor in your loan amount and rate. Check your credit score as a guide and clear up anything that may be lingering.
- Save for a Down payment: Unlike renting, have a down payment saved as well as other funds for closing costs.
3. Figure out what you want
Must Haves: Brainstorm and make a list of your must haves- open kitchen, particular location, school district.
- Prioritize and Sacrifice: Prioritize the list and know what you may be willing to sacrifice. With a little work, you can add some of your must haves to the list.
4. Hire a buyer's agent
- Realtors: Real estate agents have a large role in helping you find a home
- Knowledge: They have a fiduciary to work in your best interest, will help with negotiations, neighborhood knowledge, pricing, contracts, and information not available to the public.
- Realtor Search: Search online for reputable companies and interview potential agents that work in your desired neighborhood.
- Best Part: The best part of having a buyer's agent, you don’t pay them a penny.
5. Hire a lender and get Pre Approved/Pre Qualified
- Hire a Lender: Before you shop, you want to figure out how much you’ll be able to afford.
- Pre Qualification/Approval: At no cost to you, a mortgage company will interview you, ask questions about your finances and provide an estimate of how much you can afford.
- Search: Typically your buyer's agent will have recommended lenders you can work with, but do your own diligence when choosing by asking around.
After you’ve taken these essential steps, you and your broker are ready to get serious about your home buying journey!
If you have any questions about the steps laid out, or need additional resources, please don’t hesitate to reach out.