7 Steps to Successfully Purchasing Your New Home

Throughout your house hunting journey, you probably will have many questions. Is the home in a good neighborhood?  Will the schools provide a high quality education? What renovations can I add to my new home to make it more valuable when it comes time to sell it in the future?

These are just a small sample of questions that real estate agents are ready to answer for their clients. They know buying a home can be an overwhelming prospect. Whether it's your first home or your fifth, there is a lot to consider. So, how do you decide whether buying a home makes sense?

Fortunately, I want to share with you my 7 Steps to Successfully Purchasing a Home. Reading this plan will help you discover how to research effectively, finance appropriately, and choose wisely.  

Step 1: Establish your needs and wants

Begin your home search by carefully thinking about what you need and what you want. Write down the top 5 most important things you need in your new home, like “must have a 2-car garage” or “must be in a good school district.” Then, write down the top 5 things that you wish you had in your new home, like “should be on the water” or “wish it had a pool.” I will then find you a home that closely matches your list of needs and wants.

Step 2: Determine how much you can afford

Set up a budget so you know how much money you have to spend. Most lenders suggest that your monthly housing payments be no more than 28% of your total monthly income. It is important to set up a financial plan for purchasing your home that best reflects your finances now and in five years from now.

Step 3: Get Pre-qualified and Pre-approved by a Lender

You will save yourself time and heartache by meeting with a lender early in your home search. Lenders help you understand what it takes to qualify for certain loans. By reviewing financial documents you provide the lender, they can qualify you for a loan amount range. This is the pre-qualification stage.

To be absolutely certain that you can be approved for a loan, ask to be pre-approved. In the approval process, all of your documentation is completed and submitted to an underwriter. The pre-approval that you will receive is an actual loan commitment from a lender.

Step 4: Highlight the 3 Top Priorities for a Real Estate Agent

Today’s real estate agents are expected to be many things for their clients. To be sure you are selecting the right agent for you, make sure they possess these 3 important priorities: a Trusted Advisor, a Skilled Negotiator, and an Expert Facilitator.  If your agent can not provide these 3 skills for you and your family, select an agent who can.

Step 5: Finding the Perfect Home for You

Give your agent a detailed list of your needs, wants, and any research you have already completed about homes you would like to see. Make sure that your agent is aware of your time schedule and your expectations. With this information in hand, your agent will provide a narrowed list of homes for you to take a look at and make an offer. 

When looking at homes, tell your agent what you like and dislike about a particular home. That way, your agent can refine your search and hone in on the exact right home for you.

Step 6: Making an Offer on Your New Home

Your real estate agent will act solely on your behalf when making an offer on a home. It is their duty to represent exactly your needs and wants. After conducting careful market research, your agent will provide you the best offer to present to a seller. Then, as a Skilled Negotiator, your agent will make sure to refine the details of the deal to best fit your needs.

Step 7: Follow a Smart Financial Plan

There are two major investments to consider when buying a home: initial investment (including down payment and closing costs) and the monthly payment (including principle, interest, taxes, and insurance).

To save on your initial investment, choose a low down payment loan. You do not necessarily have to put 20% down. You can put as low as 3.5% down on some loans, but be aware of added monthly private mortgage insurance.

As part of your offer, ask the seller to pay some or all of your closing costs. Sellers are usually allowed to contribute to a buyer's closing costs. In many cases this is a negotiable item.

Shop around for your home insurance. A little shopping can save you a significant amount of money.

To keep your monthly payments low, qualify for a loan with no monthly mortgage insurance premiums, or PMI. You may be able to reduce PMI by paying a more at closing. Or, by putting 20% down, you may be able to eliminate PMI payments entirely.

With any financial planning, be sure to always contact a certified accountant and tax professional.

So there you have it, my 7 Steps to Successfully Purchasing a Home Plan. Hopefully, with this information in hand you are ready to buy your new home.