12-Month Plan for New Buyers
Rick Richter
It’s never too soon to start planning ahead if you hope to buy your first home within the next year.
Variables like loan qualifying guidelines, interest rates and house prices aren’t within your control and might change before you’re ready to move forward. But it’s still smart to start educating yourself about factors you can control, such as your down payment, credit score and housing needs and wants, as early as possible. It’s important to have a plan in place to ensure you’re on the right track for qualifying for a mortgage.
How much can you borrow? To come up with your one-year plan, you’ll need to talk to a lender or mortgage broker who will help you figure out what type of home loan will meet your needs and how much you can borrow to buy a home based on your personal financial situation. There is no reason to set your sights on a home that does not mesh with your financial situation or long-term goals. A mortgage lender can identify a target price that fits your goals and budget. The lender can also help you review your credit history so you can dispute any errors and make other changes that will better position you to purchase a home.
Where do you want to live? By setting your target price range early, you’ll spend less time finding the specific house you want. Your real estate agent will be able to provide listing information for only the properties that fit your target price range.
Starting early can also help you figure out whether you want to live in a denser, more walkable community or a spread-out place where you’ll have to drive to shops and other amenities. Think about whether you want to live in a certain school district or near a particular public transit line.
Find a no-pressure agent. Once you’ve settled on an area, talk to one or more real estate agents. Select the agent you want and rule out agents who won’t be patient with you.
If you’re working with an agent who’s going to push you into making a decision when you’re not ready, you’re probably not working with the right agent. House hunting should be enjoyable, your are trying to identify where you will call home. This is not something that should be rushed. That is why it is good to identify which agent you feel comfortable with early on.
Research homes online. If you’d rather shop online, you can research neighborhoods, homes and agents on real estate web sites that contain a wealth of information and data. This has become the new normal and web sites like Zillow, Trulia and Realtor.com give the potential buyer tons of information and analysis. This is a great first step. Then once you are becoming familiar with certain areas and homes, speak with your agent to fine-tune what you have learned. There is good and bad with these sites, a lot of misinformation – nothing beats a realtor who knows these neighborhoods like the back of their hand.
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