Time to read: 3 ½ minutes
Few things match the excitement that comes with deciding to buy a home. If you’re like most homebuyers, the first thing you do is start looking at what’s available in your area. You may quickly discover that there are a lot of homes on the market (141.95 million in 2021, to be exact).
Key Takeaways
- Work with a real estate agent to simplify the process and open up your options.
- Consider the cost of features you want, and renovations you plan to make.
- Spend some time considering the locations you’re willing to live.
Here are nine tips to narrow down the options so that you can find the one that you want to purchase.
1. Use a Real Estate Agent
Find a real estate agent who has been working in your area for at least a few years. Their experience will be advantageous as they guide you through the process of buying a home. You can buy a home without the assistance of a real estate agent, but you may find the process time consuming and confusing. You also might miss out on some listings as real estate agents have access to MLS listings not available to the public.
2. Look at Recently Sold Listings
Home-sale history is public record, and easily searchable online. There is benefit in knowing what the average sale price has been for homes similar to the ones you’re looking at, especially when it comes time to make an offer.
3. Make a List of Must-Haves
Everyone has certain features in a home that they can’t live without, and that’s okay. Just be sure to write them down. Shopping for a home with a clearly defined, written list of must-have features will help you eliminate “really nice homes” that don’t quite fit the bill. You don’t want to make an emotional decision out of excitement that ultimately causes you to compromise on what you really want.
4. Make a List of Nice-to-Haves
You’ll find that when writing out your must-have features there are also some nice-to-have features. Write these down as well, as it will help guide your decision in the event you find multiple homes that meet your mandatory criteria. Imagine what it would be like living in a home that has all of your must-haves but none of your nice-to-haves. This will help you decide which list to put each feature on.
5. Keep Search Parameters Within Your Budget
A three-car, fully finished, attached garage will naturally complement any home purchase nicely, but can you afford it? Make sure you know how much home you can afford before you start going on tours. CNBC reported that according to a poll of homeowners who purchased a home in 2021-2022, 30% regretted the purchase because they spent too much.
6. Consider Location
You’ve heard the mantra “location, location, location”—but what does it mean? We have a list of six tips for figuring out where you should live, but simply put, your quality of life depends in part on your proximity to the places you need and want to go. Factor in commute times, distance to grocery stores, schools (if you plan on raising a family in the home), and leisure-time activities.
7. Look into the “Ugly Homes”
You remember the story of the Ugly Duckling, right? Well, some “ugly homes” can be transformed with a few minor renovations. A home with old carpets and peeled paint on the walls can be to your benefit. These minor repairs won’t cost a lot to make, but they’ll drive down the price of the home due to the lower curb appeal.
8. Include Renovations in Your Budget
Be sure to factor in the renovation cost your home may need, and figure out how you’re going to pay for it. Should you ask the seller to make a concession and pay for all or some of the anticipated renovation, or will you be paying for it out of pocket after you close? You can avoid potential aggravation by comparing the initial cost of the home against any repairs or renovations you plan to make after you move in.
9. Get Preapproved
A preapproval letter demonstrates to your real estate agent and home sellers that you are a serious buyer. Being preapproved means a lender has verified your income and debt (by checking your credit), and concluded that if nothing changes with your finances they would be willing to offer you a mortgage. You don’t need to be preapproved to tour a home or make an offer, but you might find real estate agents and sellers are reluctant to work with you until you’ve demonstrated you can financially back up any offer you make.