Home Buying Tips

Buying a house is a HUGE DEAL! It's normal to have the hundreds of questions running through your head, and while I'm here to answer any question you have for me, I've compiled some of the most popular questions below to help you get started!

#1 Getting Started

Q: Where should you (and your significant other, if applicable) start your home buying journey? What should you do first?

A: The first step should be to have some super-honest conversations with yourself and anyone else involved regarding your goals with buying a home. Once you set up your home-buying consultation I will be able to provide you with an in-depth assessment to help you through this process.

A few items to get started now:

Where do you see yourself in five to 10 years? What neighborhoods do you want to stay in? Is commute to work an important factor? What are some of the things you're looking for in a home? Will this purchase affect your current finances and lifestyle?

Lastly, check your credit and make any changes necessary to maximize your home buying potential.

#2 The Down Payment

Q: Do I need to have 20% saved up before I can purchase a home?

A: While it's ideal to have 20% of your down payment ready, it is very common to put down less than 20%, and can even go as low as 3.5% for FHA loans, 3% for Conventional loans, and 0% if you qualify for a VA loan.

However, when you put less than 20% down on your purchase, you will probably have to pay for a Private Mortgage Insurance, a monthly fee that the bank will charge to secure their investment into your purchase. However, this additional fee can often be removed once you've reached 20% equity in your home.

#3 Agents and Listing Sites

Q: How should a first-time home buyer work with an agent? What do agents do that property sites don't?

A: Purchasing a home can be a really confusing, stressful, and involved experience. Your agent will be there to help you navigate through it. Experienced agents have been through a lot of deals, and bonus if your agent also values staying on top of changes in real estate and law, so they know what can go wrong and have seen many of the mistakes buyers make most often.

But beyond that, they're your sounding board. You will have many questions and decisions to make thoughout the process, it's a huge relief to have a third party with experience on your side to help you through.

Listing sites on the other hand are great in providing property information and available homes in the market. But agents are on the ground in your community every day, and because of that, they know a lot more than what you see online. Sometimes they've seen the same listing in person many times, or they know about geographic considerations you'd never think of.

Listing sites might help you find a home, but your agent will help you buy the home while protecting your interests through the process!

#4 Finding a Lender

Q: Getting a mortgage is a big deal for most buyers. How should they get started on securing a loan? And what about online lenders like Rocket Loans? Is there a disadvantage or concern with using this type of lender rather than a local or traditional bank?

A: The very first thing is just getting all your financial documents together — W2s, your last couple years of tax returns, bank statements, and pay stubs. You also need to know where your credit score and history stands in general.

Even before you start looking at houses, you should get pre-approved. That might seem premature, but you need to know what kind of loan you're going to be able to get so you can determine your price range.

A pre-approval doesn't mean you're applying for a mortgage -- just getting an idea of what you’re approved for.

Having a pre approval not only shows your agent that you're as commited to the process as they are, but is often required when submitting an offer to a seller. You don't want to find a house first and lose it to another buyer because you are waiting for a pre approval after the fact!

When it comes to lenders, whether online or otherwise, your choice will depend on your personal situation. Check out our blog on finding a lender to help you with this search!

#5 The Loan

Q: Do you suggest a government loan over a private bank?

A: It depends on your situation. If you have time and a lower credit score, consider a government loan. If you have a higher credit score and are in a really competitive market, consider private. But the true answer can only be found after speaking with a mortgage lender.

#6 Open Houses

Q: How can I make the most of open houses?

A: Open houses are a great opportunity to learn about a home and the neighborhood. However, if you're really serious about a home, schedule a private showing with your agent. This way you can see the home at your own pace and form your own opinions without other buyers or the sellers agent/representative up-selling as you tour.

#7 Finding the Right One

Q: How many houses should I look at before I make an offer?

A: Pre-internet days, it was common for a buyer to look at 20-30 homes before finding the one. Now, with the power of online listings, photos, and video-tours, it's easier to narrow down your list before going to see homes in person. I find that buyers that have done their work to figure out their wants and needs have a better time deciding on homes that are the right fit for them vs. those that are easy eliminations.

There is no easy answer here, but the right answer is to look until you find the one. I have had buyers make an offer on the first day of touring, and others that have looked at 20+ homes. The right number is when you find the right home.

#8 Making an Offer

Q: What are the top things a buyer should keep in mind when making an offer?

A: Among all the variables, the three most important are:

1. The market. What are other people willing to pay for this house, and how does that fit with your offer? If you can't offer top dollar, what other things can you do to be more competitive (like being flexible with the closing date)?

2. Your budget. In this crazy market, it's easy for first-timers to get caught in a bidding war and push themselves to their financial limits. But you'll have to live with your decision for a long time, so make sure you're OK with any and all sacrifices you might need to make.

3. This might not work out, and that's OK. Your offer might not be accepted. Or maybe your offer is accepted, but structural damage is uncovered in the inspection, or the seller has contingencies that don't work with your timeline, or you have to walk away from the deal for some other serious reason. That's OK! It’s not uncommon, and there will be other fish in the sea.

#9 The Inspection

Q: If the inspector finds issues, what does that mean for the buyer?

A: Typically, you will have an "option period" - a time to terminate the contract for any reason whatsoever during which you should schedule the inspection. If the inspection finds issues with the home, depending on the magnitude of the issues, you can choose to walk away from the deal, or renegotiate with the seller to reduce the purchase price, contribute to closing costs, or repair the items mentioned. Some of these options may vary depending on the loan type, so be sure to discuss with your agent before choosing what to negotiate.

#10 Mistakes to Avoid

Q: What are some of the biggest mistakes first-time home buyers typically make?

A: Buying your first home can be a real roller coaster. It's the excitement of seeing a great listing online and then the crash of being disappointed in person, the challenge of the offer and negotiation process, or the ups and downs of the inspection and appraisal.

One big mistake to avoid is not being on the same page as your partner, if you're buying with someone else. Talk everything through; it can cause real heartache later on if you don’t.

It's important to step back and keep things in perspective. No matter how sideways things go, remember how lucky you are to be in a situation where you can own your own little kingdom.

Have more questions? Call me!