Buying a home is a big decision, and it’s usually referred to as the largest single purchase a person is likely to make in their lifetime.
It can get overwhelming, especially for the first-time homebuyer. There are many steps in the process, and the right order makes the process run smoothly.
Are you in the market for a home? Not sure if you are?
If you’re ready to get started, check out these important steps.
Zach’s Rules for Buying a Home or Property:
- No actual shopping until you can prove that you have the money (or access to it).
- Don’t mess with the money situation.
- Be honest with me. It’s the only way I can operate effectively.
- Be ready to pull the trigger.
- Be patient.
Money Matters (Rules #1 and #2):
First and foremost, figure out your budget. Even if you’re buying a multi-million dollar property in cash, you’ll still have a budget.
Cash buyers – contact your financial institution and request a “Proof Of Funds” (POF). We’ll need that. (Rule #1)
If you’ll need financing:
- Check your credit score using a free no-obligation site.
- If you see anything on your credit report that needs to be fixed, make sure it is complete and showing correctly PRIOR TO your pre-qualification for your home loan.
- Your budget should be approximately 1/3 of your monthly gross income.
- If you’re currently renting, use your rent amount as your guideline, at least to start.
- A credit score of 640 will qualify for most of the common loans.
- “Pre-Approval” is NOT the same as a “Pre-Qualification” (“Pre-Qual”).
- Pre-Approval means you’re thinking about getting a loan.
- Pre-Qual means you already have it.
- Follow-through on the Pre-Qual.
Once you have your official proof of money Rule #2 is in full effect:
- Cash buyers – Do not touch that money. Don’t encumber that money. Don’t even admit that you have (or have ever had) that money, except to me, and the bank that issued your POF.
- Financed buyers – once you have received your Pre-Qual:
- DO NOT BUY ANYTHING ON CREDIT – not even a pair of socks!
- DO NOT ADD ANYTHING TO YOUR LIFE – Urge to get Pandora (a whopping $5/month)? Wait. Yes, seriously.
- DO NOT CHANGE JOBS – Yes, people do it. Don’t be that person.
- DO NOT FIDDLE WITH YOUR CREDIT REPORT!
- Stability is key. If nothing changes, your Pre-Qual will not change.
Completing these steps gives you the equivalent of cash in your pocket for purchasing power. Now we can go…
Shopping (Rule #1)
Let’s be honest, you’ve probably hit at least one of the on-line resources already (my property search page, or Realtor.com perhaps?). Maybe looked at a few open houses, seen a few homes you liked driving through a neighborhood. That’s great!
Make a list:
- What is important to you?
- Kids need good schools
- Boating every day
- Ultra-quiet home / neighborhood
- What would be nice to have?
- High-end kitchen
- Vaulted ceilings
- What would be a deal-breaker?
- No garage
- Hurricane Evacuation Zone
- Next to a school
Be brutally honest with yourself.
Then, be brutally honest with me (Rule #3).
Realize that we will be looking at more than 3 options. HGTV makes it look easy, but it isn’t. This is where the hard work really begins.
Some compromise will probably be necessary, especially if you have a tight budget. This is where your list, and Rule #3 make all of the difference. Feedback is crucial!
So, now we’ve found the (almost?) perfect home…
Pulling the Trigger (Rule #4)
Don’t wait. Tell me immediately –
“This is the ONE!”
Unless we are at a showing in front of another agent or the owner.
In which case, covertly give me a hand signal, or wait until we leave.
Now it gets interesting. Negotiating is an art form, and price is not the only thing that gets negotiated.
This needs to be done, but it needs to be done right. So…
Patience (Rule #5)
Negotiating takes time.
Lots of signatures, back and forth shuffle.
It can be infuriating, slow, and fraught with potential pitfalls.
Never let them see you sweat, or blink, or flinch (unless I tell you it’s appropriate).
Be ready to pull the trigger, but be patient.
There will be a lot of paperwork.
Expect your actual numbers will be different than everything you’ve seen so far. Really close, but different.
Be patient, calm, cool, and collected.
Until you walk out, with keys and paperwork in hand, you are not allowed to be excited.
After that? Once you hit the parking lot…
Jump for joy! Hoot, holler, and act a fool!
I’ll probably join you!