You have finally made the decision that you want to buy your own place. You don’t want to rent. You don’t want to live with anyone else (unless they are paying you rent). And you don’t want to pay someone’s else’s mortgage. That’s great! But where do you start? I hope this post can help you create a plan and feel confident in your next steps forward.
Step 1: Create a wish list and decide your whys.
You want to live in Kirkwood because you love the small town feel so close to the city but the houses are outside of your price range. What about Webster Grove or Oakland? Could these towns also give you the vibe you are wanting but at a price point you can afford? It is important to know what you are looking for but it is equally important to know why. A good agent will encourage you to discover the why in your wish list because needing a separate space for each of your five kids to sleep, is not the same as needing a six bedroom house. A three bedroom house with a large unfinished basement at a great price could also meet your needs. I encourage you to sit and really think through why you are wanting each of the items on your list.
Step 2: Research the market.
Now that you know what you want and why. It’s time to start seeing what is available in your areas. Budget is less important at this point. Obviously you probably have some idea of what your budget is but don’t be afraid to look at homes that you are sure above your price range. If they include everything on your wish list, look at it! Use Zillow.com and Realtor.com to find listings and open houses online. Then go the open houses. I encourage you to go to at least 5 open houses. Ask yourself these questions: to get everything on my list what is the normal asking price? What seems to be the high dollar features that drive the price up? What do the lower priced homes not offer? Would I be okay without that feature?
Step 3: Find an agent/Choose a lender and get pre-qualified.
Now it’s time to find an agent. Obviously if you are reading this post on my site, I would hope you would at least be considering me. But there are a ton of agents out there. There is a stat somewhere that every person knows of at least 4 real estate agents – the number may actually be higher. I can’t remember the actual stat but I know it was kind of a lot. Take a second, can you think of four agents you know in your life? Come on, I know you know someone: a friend from high school, a relative, your friend’s dad. Now just because you know these people are agents doesn’t mean you would use them but you are aware of them. And there are a lot of people that would use someone like that or worse be assigned randomly to an agent via Zillow or Realtor.com. Don’t get me wrong, I have gotten some great clients through online leads like Realtor.com but that is a huge risk for the client. They don’t know why they will get. Not all agents are created equal!
Meet with at least two agents. Of course it is important that they are knowledgeable about the market and that they showcase they are a skilled negotiator but these should be far from final decisions makers. Check out their brokerages. Do they have a strong support system within their brokerage? If they do, then you can guarantee if the need should arrive they have the resources to get you the info you may need about a house. They will also have access to mentors who can help them through a tough negotiation.
Also check out their vibe? Are they listening to you when you speak? Are they letting you do the majority of the talking instead of selling themselves? You want an agent that hears you and understands you. It is going to be a frustrating process if you are constantly having to reexplain yourself to your agent. It won’t be long before you are going to wish you had chosen someone else. Basically, make sure you like and get along with your agent.
While your choosing an agent, you will also need to be vetting lenders. Just like agents, lenders are not all created equal. If you are unsure where to start, ask your agent for a referral. Their referral will likely be the best you are going to get as it is someone they work with often. They aren’t going to refer a bad lender as that would make them look bad in turn. And kickbacks between lenders and agents is illegal so don’t be concerned that their referral is being bought – though if you did a good job choosing your agent you should already have some level of trust with them. Beyond a referral from your agent, where do you bank already? That’s a great place to start as well. Ultimately, you want to choose a lender that you trust, is knowledgeable about the various loan packages, they are responsive to your questions, and obviously, offers you a great rate and loan.
Step 4: Start touring houses with your agent.
Your agent will probably show you a few homes before you are fully pre-qualified with a lender but once you have that piece of paper, the fun can really start. Looking at homes in the beginning can be fun and exciting but after viewing 20 or more homes, it may feel like you will never find a place. This doesn’t happen for everyone but if it does for you, don’t get discouraged. If you need to take a week or two off to reset, do it! This isn’t a race and as long as you stay diligent, you will find a home.
Step 5: Put in an offer.
Once you find the perfect home for you, your agent will draw up all the necessary paperwork. This market still favors the seller but if you did a thorough job choosing your agent and lender, your agent will go over the various options available to you to strengthen your offer. I’ll explain this process in another post. You may not get the first house you put an offer in on. Right now, buyers will typically submit around five offers before they get an accepted offer from a seller. As I mentioned in step 4, don’t let this discourage you. It’s all part of the process.
Good luck!