First, you must determine that you want to buy a home. Sounds simple, yet many people find that getting started is the hardest part. There are perceived obstacles in the minds of many would-be homeowners:
Can we save enough money for the down payment? How can we get out of our current lease? Where can we afford to live?
The goal is home ownership, and there are many steps to reach the goal. You may not be financially ready yet, but you need to ascertain where you are NOW in relation to your goal.
Get your finances in order. Accurately determine your financial situation and review your credit profile to determine how a potential lender will see you. Look at all of your available assets for your down payment and examine all of the finance options available to you. If you have some credit blemishes, take the time to make timely payments to your creditors to present the best financial picture to your home lender. Make sure that you have a track record of stability in your employment history. Postpone any major purchases such as cars, motorcycles, or large appliances until after you close escrow. Your actual home purchase may still be 12-18 months down the road, but you can still prepare for it now.
Get pre-approved for your mortgage. Once you’ve cleared the financial hurdles, talk to your lender or broker to find out how much you can afford to borrow along with the expected out-of-pocket costs you will need to incur for the closing. This will include the required down payment (if necessary) along with funds for closing costs, which can run 3-4% of the purchase price. Pre-approval also allows you to shop for a home with an accurate price range. If you are buying in a seller’s market, you may want to search for homes that are considerably below your approved price range, so that you can have the most room for negotiation.
Find a credible licensed real estate agent. Look for an agent that can work with you based on YOUR needs and your schedule. Evaluate references of previous clients and make sure that he or she is responsive and available to you.
You may not know exactly what you want in terms of a new home, and your agent should work with you to determine your needs and help you find a property that meets your immediate and future needs. Your agent should be familiar with the area where you plan to move. Talk to your family and friends for successful agent referrals. Ask them how satisfied they were with his/her services and if they would use them again.
Become an informed and practical buyer. Once you determine where you would like to live, determine what factors are most important for your family. Calculate your new commute time and research school information for your children.
You may want to consider the proximity to a place of worship and shopping in the area. Make sure to evaluate the surrounding factors that are most important to you, along with factors that are least important.