It is the question many would be home buyers are afraid to ask, “how do I buy a house?” I think many are afraid a real estate professional would say, “get pre-qualified for a loan, find a house, make an offer.”
That’s lovely advice, but I don’t think it addresses the real concern. I think the REAL concern is, “How do I avoid a horrible, expensive, mistake?” Or, better yet, “How do I avoid getting “sold”?”
Set your priorities for the house
Sit down and think about what you want from this house. Everyone has some basic priorities: investment value, convenience, safety, schools, aesthetics, recreation/entertainment are some of the most common.
However, no one has these values in the same order or intensity. To help you set those priorities ask these questions:
- How do you imagine living in the house?
- How long do you plan to live here?
- What do you want the house to do for you?
- How much time or money would you spend on the home after you move in?
- Who will be living in the house and what will they be doing, there?
Set your priorities for your agent
Another part of the equation is the agent you chose to represent you. Typically, the buyer does not pay a commission to a Realtor (the fee is paid by the seller), so it is common for a buyer to default to the most convenient Realtor possible.
I think this is the biggest mistake a buyer can make. Before you see any homes or meet any agents you should know what you want in an agent. Do you want an advocate to look after your best interests or do you feel an agent’s advice is unnecessary?
Knowing how you will work with an agent will protect you from assuming a Realtor is looking after your best interests when, in fact, they are just trying to make a sale.
Set your budget
I think we all know, by now, that just because the bank says you can buy a million dollar house does not mean you should.
Several factors should help you decide your housing budget.
- How much money needs to stay in your account after the purchase? Most people feel the need for a cash cushion
- What life style do you expect after the purchase?
- What are your best guesses for you career? Are you likely to remain steady, move up or is your job in peril?
- What do you expect for household income? Do you expect a change in your partner’s work status in the next 5 years?
Select your neighborhood
The hottest topic in the buyer sector of Real Estate is “Lifestyle Search” . The idea is that a house is less important than the neighborhood and the neighborhood amenities.
So, we are back to priorities. What neighborhoods suit your lifestyle? Do you want a walkable area? One suited for your family or your recreation or your work commute?
Once you know your priorities for the neighborhood, it is far easier to narrow down for budget and then house.
Now you can go shopping
If you take the time to do these step, first, you are far less likely to make a big mistake.
By the way, if you decide that you want an advocate as your Realtor, I woud love to interview for your business.
