Identifying your real estate need is the first step on your journey to a new home purchase.
1.1 First Time Homebuyers – Buying a home can be a great way to build equity, and stop throwing away money on rent. However, finding a new home can be a daunting task; particularly, if you have never had experience with real estate. You will have to rely heavily on your buyer’s agent, and have detailed consultation with them, regarding your real estate needs.
1.2 Move-up Buyer – You already own a home, but now realize more space is needed for your growing family. Your real estate needs have shifted, since your first purchase. In addition to the size of the home, what new factors are important in what you’re looking for, in your next home? Will what school district be the most important factor? You may also want to ask yourself, what will you do with the home you’re currently in?
1.3 Empty Nester – Now that your family has grown and moved out of your home, it’s time to downsize! There’s no need for all the additional bedrooms and space. At this stage, there’s a lot more flexibility in what you’re looking for. Now you can search for a home with features that you want, rather than factors that you need.
1.4 Relocation Buyer – Your career has taken you on a different path, and now you’re moving to a new city. Inquire with your company to see if they have relocation packages available for you. They may help ease the headache of a quick transition into a new city.
1.5 Investment Buyer – Are you looking to invest in a rental home? Building equity and cash flowing property can potentially be very lucrative. Address what is most important to you, and examine what types of returns you may be looking for.
Wants vs. Needs – Once you’ve figured out what type of buyer you are, the next step is to identify what your needs are. Being able to separate your “wants” from your “needs” is very important. As a first time homebuyer, your budget may be your biggest “need”. As a move-up buyer, finding a good school may be a “need”. A good method for this step in the process may be to list out everything you expect in your new home purchase. See how they rank against each other, and start putting them into the “wants” and “needs” category. “Need” items are factors that cannot be sacrificed, whereas “want” items come secondary to them.
Prequalification – An important factor to purchasing a new home is to figure out how much home you can qualify for. Speak to a mortgage lender, or banking institution to see how much home you can purchase. They will be able to discuss various loan options that may fit your needs.
Finding a well informed buyer’s agent will help facilitate your purchase process. The more knowledgeable the agent is, the easier the process will become. It might be a good idea to interview a couple different buyer agents, to see where they specialize, or what their knowledge is for what your “needs” are. Be sure that the agent you choose can communicate with you quickly, and clearly. In a strong market, timing is everything!
Now that you’re focused on what you’re looking for, and armed with a buyer agent to help you look for the home, the fun part begins. Your agent should be able to keep you updated on the newest listings to hit the market that meet your criteria. Begin scheduling previews of homes that you like, with your agent. Take notes, and give feedback to them, as it will help them with their future searches. Although, there’s no real rule of thumb as to how long you should be looking, you want to make sure that you give yourself ample time to see what’s out there. Once you’ve narrowed it down to a few homes, ask your agent for further assistance in providing market data for pricing.
Before making an offer on a home, discuss the market conditions of that particular home and neighborhood with your agent. Is the home you’re looking at priced accordingly? Is it overpriced, or undervalued? Is there high demand in the area? All these questions will factor into an appropriate offer for the home. You will rely on your agent through the negotiation process.
Once you and the seller have agreed on a price, and contract conditions, your agent will instruct you on what the next steps are. Prior to closing, you want to make sure to inspect the property thoroughly, and negotiate any further repairs that may be necessary. The length of your inspection period, along with any other timetables should be discussed with your agent. This will ensure that you and your agent are on the same page, and you have a safe and happy arrival at the closing table.