Shopping for a home isn’t as simple as finding a dress or a pair of shoes. A lot of thought goes into acquiring a home because it’s a huge purchase to make and one that’s likely to impact the rest of the owner’s life. Yet, with the importance buying a house has in modern society, there are still a lot of details that many people simply overlook when they start looking for a home.
Unless you’re an industry insider, chances are you’ll never be aware of these crucial steps toward homeownership. To help homeowners come to grips with these critical elements, 12 members of Forbes Real Estate Council talk about the steps they see as the most important in finding and buying a home that most people simply ignore.
1. Calculate What You Can Afford
Most buyers don’t calculate what they can afford. Buyers should always start with a budget, what monthly payment are they comfortable with including all expenses. Payment shock can be overwhelming. With a very high in-demand market because of lack of inventory and record low interest rates, buyers need to budget and be prepared before they enter the buying arena which is presently very competitive. – Ralph DiBugnara, Home Qualified
2. Access Grant Money Assistance
Accessing grant money assistance for down payment and closing costs is one step in buying a home that most agents and buyers simply don’t know about. There are programs available in every state for both Federal Housing Administration (FHA) and conventional buyers. Even if buyers have the cash on hand, you may still benefit from accessing grant money. A good resource for buyers in all 50 states is The Federal Savings Bank. – Daniel Breslin, Diamond Equity Investments
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3. Consider Potentially Hidden Costs
When shopping for the perfect new home, buyers should carefully consider potentially hidden costs—the heating and cooling costs of a larger home can add to your bottom line. Ask your agent to obtain copies of recent utility bills from the sellers so that you can understand these expenses and add them to your monthly budget. The best way to prepare for unexpected home repairs is to get a home warranty. – Tara Hotchkis, Compass
4. Develop An Exit Strategy
“What’s your exit strategy?” Few agents ask their clients this question but it could help close a deal and open the door for future business. If the client responded, “We are only here until the kids are out of school,” you could then run analytics based on historic pricing for when they exit. You would also help have the property listed again and help your clients on another sale. – Michael Valdes, eXp Realty
5. Consider The Buyer’s Lifestyle Needs
I run a brokerage in Mexico where location is critical, not just what’s inside the four walls of the home. Many realtors focus only on the home and not the buyer’s lifestyle needs, which are greatly influenced by location-controlling factors like walkability, safety, neighborhood amenities or neighborhood cultural events. The home is important, but in Mexico, lifestyle is king. – Gregory Gunter, Berkshire Hathaway HomeServices Colonial Homes San Miguel
6. Pick The Right Agent For You
Picking the right agent for you is essential. Oftentimes, we are so focused on finding the right house, aligning our finances that we forget the other part of the equation includes finding an agent who will go to bat for you. You want someone who is the right fit for your team. After all, this is a big emotional and financial investment, so don’t settle for just anyone. You want that A+ team player. – Pam Scamardo, TPK Properties LLC
7. Get Home Insurance
You might be surprised to find that homeowners often forget to secure home insurance, especially when purchasing all cash, since it’s not a requirement for closing escrow. But even buyers using financing often struggle to purchase the right insurance or don’t purchase enough coverage to cover the full amount of the loan. Talk with your lender first to confirm what you need before you go shopping. – Jennifer Anderson, Anderson Coastal Group
8. Check Permit History
I have encountered multiple accounts where a property did not have proper permitting, such as a pool and septic system that never had a final permit inspection or improvements that never even had a permit application submitted. These properties had been sold multiple times with the buyers and their agents never catching the issue. I advise my clients to research the permit history. – Kristee Leonard, The Leaders Realty, LLC
9. Set Up A Yearly Maintenance Account
One important step that is often overlooked when purchasing a home is the creation of a yearly maintenance account. Just like humans, our homes need yearly check-ups to ensure that any future catastrophes can be mitigated. Maintenance can come at a higher price the larger the home, and can also cost you thousands down the road if not repaired in a timely fashion. – Ivan Estrada, Ivan Estrada Properties
10. Prepare For Functional Obsolescence
Preparing for functional obsolescence is very important. By this, I mean educating a buyer about the need to budget for future replacement or repair of various systems of the home. Also, the costs of maintaining a house if a buyer has not owned one before are very important. This is often not discussed but important in order to take care of the property properly. Buyers are so caught up in the emotion they often do not plan for this. – Melinda Estridge, Estridge Group
11. Check Who Lived There Before You
Who lived in the house before you and does the property have any bad stigma? From criminals to extremists, the bottom line is why would you not want to be in that home? The fear of not knowing who may come to your door for retribution would be a terrible thing to have to live with. This stuff is often found out after you have already bought the property and you start talking to the neighbors. – Chris Ryan, Beyond Properties Group (eXp Realty)
12. Check Out The Immediate Neighborhood
Be sure to check out the immediate neighborhood on foot or via bike. Get out of the car and check out the neighborhood “vibe” at different times of the day. Check for noise levels from traffic or nearby commercial areas. Walk the streets on a warm day when neighbors are out to see if there are welcoming waves and smiles, and just to get a “feel” for how it would feel to live in that neighborhood. – Michael Zaransky, MZ Capital Partners
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