Beginning the search for a new home can be stressful.
The more you feel in control of the process, the more confident you will be as you begin the journey. As a real estate professional who has spent thousands of hours with clients, I get asked a lot of questions.
Here are some of the ones I hear most frequently. In nearly every case, there is some nuance to the answer, since no specific situation is exactly the same. Use this as a starting point to understand the process, and I hope it will answer some of your questions, too.
How Many Homes Will I Look at Before I Find 'the One?'
I like to compare this to finding the perfect wedding gown. You may find your dream dress on the first try, or it may take several visits to multiple places to find the right one. This is the same as looking for homes. You may fall in love immediately or look at 10 or more properties for months before you find the one.
Another factor to consider is your current living situation. Is your lease for your rental about to end, and therefore you need a new home right away? On the other hand, if you have no immediate timeline and would like to just dip your toes in the process, then you may look a little longer to find the perfect dream home. Taking more time or less time to find the right home doesn’t mean that you won’t achieve the same result.
Sometimes this answer is more tied to the inventory on the market at the time that you are looking at homes than anything else. A home might come up at the beginning of the process that checks all your boxes, and sometimes you have to wait for the right home. However, don’t wait if you find the one, and trust me, you will know it.
How Should I Prepare for Buying a Home?
Get preapproved for a mortgage so you are able to move forward quickly. You will have to include your preapproval when submitting your offer. Aside from letting the seller know you will be approved for a loan, it also signals to them that you are serious and have done your homework.
Make a list of your top priorities, as well as those that you’d like but aren’t dealbreakers. The “must haves” will help you narrow down your search, and some of the other items on your list might end up being more or less important to you as you become more educated during your search. Remember, you will not get every single item on your wish list. At every price point, you will have to make compromises.
Once I Find the Home I Want, What is the Timeline to Closing?
Again, there are factors to consider when answering this:
With financing, it usually takes between 30 and 60 days from contract to closing, especially if you’re already preapproved for a mortgage.
Without financing, it’s possible to close in 30 days or less if the seller is also willing to move quickly. Of course, the seller may have mitigating circumstances that could speed up or slow down the process, which is beyond your control.
How Much Would a Renovation Cost if I Buy a Home?
Many aspects come into play when determining this (gut renovation vs. small section or surface upgrade, location, timeframe, etc.). Your broker should have a team of professionals who can arrange to meet with you in the potential home to discuss the project and give you a ballpark estimate (you aren’t obligated to use that contractor). Knowing whether you are looking at a $200,000 upgrade or a $1 million renovation will impact your bidding price.
What’s the Neighborhood Like?
If you’re working with a local broker, they should be able to give you a list of local information (grocery stores, coffee shops, tailors, etc.). Keep in mind that a broker is prohibited from discussing the local schools with you, according to the Fair Housing Act. They can, however, direct you to information sources to help you find out everything you need to know. If you decide you really like a home, your broker should take you around the neighborhood and point out places of interest. They might even be able to connect you with former clients who live nearby.
Is This a Good Price?
One of your broker’s jobs is to review “comparables” – similarly sized homes in the area (or building for apartments) to see what the sale price has been recently. That is always a good baseline to determine whether the asking price is fair. Of course, you need to compare apples to apples – as pricing is not only determined by size but also by condition, acreage (for homes), amenities (for buildings), and more. A large home in poor condition can sell for less than a smaller home in mint condition. It is your broker’s job to evaluate all the variables, as well as the current state of the market.
What Should I Bid? Above the Asking Price, Below or Meet It?
Again, there are multiple factors to consider. After your broker reviews the comparables, they should find out as much as possible from the seller’s broker to find out if there’s been a lot of traffic or not. This is another reason why having a well-connected broker with good relationships in the industry is important. They can try to find out if there have already been offers. If your broker can find out the circumstances of the sale (moving for a new job, downsizing after becoming empty-nesters, or needing a bigger home due to an expanding family), this may provide some color on how much you should bid since it helps determine how quickly the seller needs to move. If they are crunched for time, they may accept a lower offer.
Your broker will also have a sense of the current market. If it’s a hot market and properties are moving quickly, they will encourage an offer matching or exceeding the asking price. In a slower market, they may advise you to underbid and see what happens. If a home has been sitting for a long time, the seller might accept an offer below the asking price.
Some Good Questions You Might Not Think About
Here are some questions I would recommend asking, although they are not the ones I get asked most frequently. These are also important factors to consider:
What’s included in the sale?
What are the closing costs?
How old are the appliances/major systems (such as HVAC, furnace, hot water tank, etc.)?
The More You Know, the Better
These are all really great questions that you SHOULD be asking when you are purchasing a home. The more you know, the more you will feel confident in making such a large purchase. It is important that you use a local real estate agent that you trust and is patient in answering your questions thoroughly.
Read more at RealEstate.USNews.com
Related Links
The Difference Between an Inspection and an Appraisal
How Long Will It Take To Sell My House?
5 Confidence-Building Strategies to Empower First-Time Homebuyers
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
