Why is Searching for a Home Important?
The home search is an important aspect of the home buying process because it’s your opportunity to fully understand the market — getting a feel for price ranges and availability in the neighborhoods you’re interested in, exploring new neighborhoods, learning about school districts and tax rates and fine-tuning your list of criteria for a potential home are all a must when you are getting ready to buy.
Buying a home is often the largest financial commitment a person will make in their lives, so getting a full understanding of the above factors is more than worth the effort. You want to feel confident that you got the best deal for the best price, so be persistent and look at house-hunting as a second job. Homebuyers who work hard at it usually end up getting a good deal on a home they love. Here’s how you can do that as well.
How Should I Conduct My Home Search?
Chances are you already have a good idea of the kinds of homes you like and dislike and the kinds of neighborhoods where you feel most comfortable. After all, you’ve been living in one form of housing or another your entire life and you’ve likely been in numerous homes of other people.
Make a List of Priorities
Take what you already know and use it to your advantage. Before you even meet with a real estate agent, have a list of must-haves pulled together. How many bedrooms do you absolutely need? Do you want a garage? Is a walkable neighborhood important to you?
Make a list of the most important criteria for your new home, then, divide your list items equally into two categories: “top priority” and “nice to have.” You might find a home you fall in love with — one that has huge windows and hardwood floors. While these features might be desirable, they may not be your top criteria. It’s not as fun having a beautiful home if your commute is two hours each way.
Keeping your list of “top priorities” and “nice to haves” will help you stay level-headed when searching for a home. As you search, you may shift some of your priorities. If you do, be sure to update your list, keeping it with you as you search. Write it all down so you’re ready.
Get Pre-Approved for a Mortgage
The next item on your agenda is to get pre-approved for your mortgage loan. This is important for several reasons. First, it helps you determine whether you can afford everything on your list of priorities and what neighborhoods might be out of your reach. Second, it tells your real estate agent that you’re serious and are ready to make an offer on the right home when you find it. You can begin your pre-approval process by checking your credit scores to see where you stand and by pulling your credit reports to ensure there aren’t any errors that are dragging down your scores. You can get two free credit scores on Credit.com.
Keep in mind that you could be approved for more home than you might actually feel comfortable buying based upon your personal spending and saving habits. There are several important factors in determining your monthly housing budget, including what your long-term financial goals are. That’s why it’s important to have a monthly budget already established that accounts for not only your expenses, but also savings and an emergency fund.
Find a Knowledgeable Realtor
Finding a good Realtor who is knowledgeable about the neighborhoods you’re interested in can be a huge help in your home search, so take your time to find an agent you are comfortable with and who understands your needs. Don’t be afraid to interview several agents before choosing one. While you may not be paying this person out-of-pocket, you are hiring them to make a very important financial decision, so don’t just assume the first Realtor you talk to is the right one for you.
Re-Evaluate Your Priorities
Now that you’ve found a Realtor, your first step with them isn’t jumping in the car and starting the home search. It’s important that you thoroughly review with your agent your list of priorities. Your Realtor will be able to tell you how much on your list is realistic given your price range and preferred neighborhoods and be able to set your expectations accordingly. You might be able to afford more home than you originally thought, so perhaps that pool in the backyard can be added to your list of priorities instead of nice-to-haves. Of course, the opposite is more likely, so be prepared to whittle down your list a bit.
Think of Your Agent as Your Partner
Don’t rely solely on your Realtor to find homes for you to see. They will be focused on your priorities and could pass by something they think you won’t be interested in. So jump online and check out the local listings yourself.
What happens next is a function of the marketplace in your area. In many markets today there is a huge inventory so you and your agent will have a lot to choose from. You can review all of the existing listings that meet your criteria, then narrow down the list to the best ones. Then you can arrange to see them and, if one happens to strike your fancy, you can make an offer on it.
Remember, too, that there are other buyers out there competing for housing. When you find the right home, be prepared to move quickly. But that doesn’t mean you shouldn’t take the time to knock on a few doors around your neighborhood and ask about what it’s like to live there. Are there noise problems? Any other nuisances? Most of the time, of course, there will not be problems, but if there are, let them be someone else’s problems. Buy somewhere else.
To learn more about buying a home and how the financing process works, read more from our experts by visiting our Mortgage Learning Center.
This article has been updated. It was originally published Aug. 8, 2013.