When you’re ready to start the house hunt, it’s easy to get swept up in the excitement – designing a to-die-for landscaping plan or daydreaming of the perfect front door color. That’s why we’ve put together our first-time buyers’ checklist of steps to get you prepped for home buying success long before you ever set foot inside your first showing.
Step 1: Get pre-approved for your mortgage.
We know. Researching mortgage lenders, finding the right fit, and churning out a few piles of paperwork to get pre-approved for your mortgage probably sounds like one of the least exciting things on your list of to-do’s. But it’s also one of the most important. Because, until you know exactly what purchase price you’re approved up to, you can’t begin to set realistic expectations for your future home. What’s more, many sellers will require proof of pre-approval before they’ll even consider letting you come to the table, especially in a situation where there are several interested buyers and the potential for multiple offers.
Step 2: Do your due diligence when researching realtors.
Choosing the right home is nearly impossible if you haven’t chosen the right realtor first. That’s why you should weigh your options when it comes to your realtor just as heavily as your options for potential homes. Start by making a shortlist of realtors that seem like a potential fit, then vet them by sitting down face-to-face to discuss all the details, from how vocal and involved you’d like them to be during showings to how you like to communicate (by phone, by e-mail, etc.). And don’t avoid the tough questions – like what their sales volume is, and if they’re part of a larger, connected network of other realtors, like RE/MAX of Grand Rapids agents.
Step 3: Start seriously saving for a downpayment.
When you’re talking about a purchase as large as your first home, it doesn’t take much for even as little as a 5% downpayment to eat into your savings. So, start setting aside a downpayment little by little, well in advance of searching to secure your starter home. You’ll thank yourself when you’re not buried in the added expense of furnishing that beautiful abode you’ve just purchased!
Step 4: Get a grasp on your closing costs.
When purchasing your first home, one of the biggest shocks is getting the first glance at your closing costs. So, before you set up your first showing, use your targeted buying budget to estimate your closing costs so you can go in with a clearer picture of what you’ll need to bring to the table. Not sure how? Your mortgage lender should be happy to help you get a grasp on these potential numbers and even break down what your monthly mortgage would be based on various purchase prices.
Step 5: Decide on your walkaway number.
Long before you step through the front door of your potential future home, it’s important to know where you draw a line in the sand when it comes to your spend. Why? Because it avoids that tragic moment where you get into a bidding war, and your spouse or home buying partner wants to stretch beyond the initial budget, but you want to stay firm. These “I thought when you said our budget was $300,000 you really meant $350,000” moments are more common than you think, and they can mean the difference between ending up in your dream home, or in a big dispute.