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If you have been following the Moreira Team Blog, you will have seen our ongoing series breaking down the seven key steps you need to take when buying a home. If you haven’t read the previous articles, we highly encourage you read them before you finish reading this article. The first three steps are absolutely crucial to take before you are ready to move onto step 4: starting your home search.
Step 1: Getting Your Finances in Order
Step 2: Hiring a Realtor®
Step 3: Getting Preapproved for Your Home Loan
Step 4: Are You Ready to Start Your Home Search?
Step 5: How to Make Your Home Purchase Offer More Attractive
Step 6: Understanding the Home Inspection and Appraisal Processes
Are You Truly Ready?
It may sound a little crazy to think that starting your home search is the fourth step to take when buying a home. However, any real estate or mortgage expert will definitely tell you you are not ready to buy if you have not completed those first three steps above. Your financial situation should be good. You will gain many important benefits from hiring a real estate agent. And, you would be making a huge mistake by not being preapproved for your mortgage loan before looking at any homes. It will help you know what you can truly afford and it will give you a leg up when making a purchase offer on any home you wish to buy!
Now that you have completed these preparatory steps, you are officially ready to start looking for your new home. You are mentally and financially prepared, which will make the home search process go much smoother. Buying a home can be exciting!
Searching for your home is obviously the most exciting and fun part of the entire home buying process. It’s easy to understand why people naturally want to jump ahead to this step.
Buying a Home – What Are You Looking for in a New Home?
While you are taking those initial steps, you can start thinking about what type of home you would like to purchase. It’s okay to plan as long as you resist the urge to start your search before you are truly ready.
Where Are You Looking to Buy a Home?
So, what should you be looking for in a new home? Here are some criteria to consider as you begin your home search:
Location, Location, Location
It is often said that these are the three most important words in real estate. The location of the home definitely makes a difference. You want to look at areas that are convenient for your work. If you have kids (or plan to have kids), you should look at school districts and other neighborhood amenities (parks, shopping, etc.) suitable for your family. You want to find a nice neighborhood with low crime rates and healthy home values that will offer positive equity appreciation over time.
Make a list of all the things that are most important to you in a new home, in order of priority. There may be some qualities that are “must have” features—home office, minimum number of bedrooms/bathrooms, garage, etc. Then, there may be some things that you would like to have, but aren’t necessities. It would be great to have a swimming pool in your backyard, but is it really necessary? Figure out the key features that you need first and start your home search based on those items.
Assuming you have been preapproved for a mortgage loan, you will know how much house you can actually afford. This doesn’t mean you have to borrow the full loan amount you are qualified for. Remember that is probably the highest end of your purchasing budget. Be careful not to stretch yourself too thin. Find a home that you like and that suits your needs without breaking your budget. Crunch all the numbers and understand all the expenses that come with homeownership beyond just your monthly mortgage payments:
- Upkeep (Repairs, Maintenance, Lawn Care, etc.)
- Homeowners Insurance
- Hazard Insurance
- Property Taxes
- Homeowner’s Association (HOA) Dues, if Applicable
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It’s rare that anyone stays in their first house forever. It is usually just a stepping stone toward bigger and better living situations in the future. Look for property you know will appreciate in value while you own it and have good resale potential when it is time for you to move onto your next home. If the property has been sitting on the market for a long time and has had multiple price reductions, there may be some red flags to consider. If it needs some work, be prepared to do the work.
Explore Your Options
It’s common for someone to fall in love with the first house they see. The process is exciting, but don’t let your enthusiasm cloud your judgment. Always look at multiple properties and weigh the pros and cons of all the homes you see before making a purchase offer on the one you like best.
Be Decisive and Ready to Act
We are in a strong seller’s market right now. Buyers have to be more decisive and ready to take action. Take your time to explore your options and consider all the pros and cons before making an offer, but don’t procrastinate too long or you will likely miss out on the house you want most. Decisions need to be made smartly, but they also need to be made swiftly in today’s ultra-competitive real estate market.
Are you ready to start your home search, or do you still need to get preapproved for your mortgage loan? If you are ready to buy a home, contact Moreira Team to get your home loan process started on the right foot.