Once you decide it’s time to purchase a new home, it can be difficult to know where to begin. There are decisions to be made, paperwork to get in order and open houses to visit. You'll want to get your finances in order and be preapproved for a mortgage with a lender and determine your search parameters for what you need in a home, while also keeping your options open to a property you might not expect to be a perfect fit.
Here are four steps to get you started on the right foot for your home search.
Get preapproved. Before you seriously begin your home search, it’s a good idea to get preapproved by a qualified lender. Getting preapproved will work to your advantage in several ways and many real estate professionals will require it in order to work with you in your home search. Preapproval will ensure you won’t waste time looking at homes that are outside of your price range.
If you're searching in a competitive marketplace, preapproval is even more important. When you finally find the home of your dreams and you’re ready to make an offer, you don’t want to be held up or have to scramble to get preapproved. Most sellers won’t consider an offer with financing unless it is accompanied by a preapproval letter as well as proof of funds.
Particularly in multiple-offer situations, it’s imperative to have everything in order to put your best foot forward and stand out among competing buyers. Another option that is less intense is to get prequalified. A prequalification will give you a general ideal of what you can afford, but will not be as thoroughly vetted as a preapproval. A seller faced with multiple offers will likely look more favorably on a buyer that's preapproved over one that has only gone through prequalification. Working with the lender from the beginning of your search will mean you're ready to go when you finally find the right home. Plus, knowing what you can spend will make for a simpler and more efficient search process.
Identify your wants and needs. The next step in your process is to identify both what you want and need in a home to make it comfortable. Make a list of your must-have features and also the things you would like to have, but are not necessarily deal-breakers. How many bedrooms do you need? What neighborhoods do you like? Are you looking for a condo or a house with a yard?
This is the time to consider your lifestyle and your long-term goals. Think about the architectural style of homes you like, whether you’re willing to do work or not and how location can affect school districts, commute times and the proximity of amenities.
Keep an open mind. You may begin your home search with specific goals and expectations. But once you start looking, you may realize you need to compromise on certain points, or that you actually need something different than what you originally thought.
Setting unrealistic expectations can lead to frustration and road blocks to finding your ideal home. For example: Even though you may have your heart set on a very specific neighborhood, being willing to explore similar or nearby areas could greatly open up your search options. You may find an area that meets your needs even better than your original search parameters.
A buyer could also start out thinking that she only wants a house with a super-modern and sleek aesthetic, only to walk into a classic Spanish-style home and fall head over heels for the charm and exquisite detailing. Keeping an open mind and being willing to compromise on certain features or aesthetics, especially in the beginning of your home search, can really help you narrow down your options to your final decision.
Think long-term. For many buyers, a home is a long-term investment. During your search process it’s important to think of your current and long-term needs. Maybe you're thinking of having a family and will need extra bedrooms, or you're planning to retire in this home and want to find a single-story floor plan.
It’s also important to consider resale value. Are you able to update or add value to the current home? What are the trends in the neighborhood? Are there any factors in play that could affect resale values in the foreseeable future? Being honest with yourself about your long-terms goals and working with an experienced real estate agent who understands the market trends can be significant factors in your home search.
She is currently Executive Director of Luxury Estates with Compass in Beverly Hills, California. Her team, SFJ Group, is comprised of agents and a full-service staff ranging across experienced marketing, listing, transaction, and operation experts.