Most of the time when I work with a real estate client, it is with someone who is a first time homebuyer. This isn't surprising, since there aren't a whole lot of people who do multiple real estate transactions in their lifetimes. The vast majority of people only do this once or twice. This series of posts is for those of you who are entering the home buying process for the first time, or for anyone who wants a refresher.
This is the 3rd post in this series. Hopefully by now you've read the earlier posts on working with an agent and choosing a lender/first-time homebuyer's classes. And hopefully by now you've at least talked to a lender to get a feel for what you are qualified for in a loan and you have a good idea of the total amount you are comfortable paying every month. Ideally, you'll have an agent signed up and a pre-approval letter in hand.
With those steps done, it's time to go from idly browsing homes on the internet to actively looking and making offers. There are a lot of homes for sale at any one time, and some buyers want to see all of them. But that can lead to burnout for both you and the agent. A good agent will tailor a search that will help you quickly focus on the homes that are a good fit for you, and after each showing the agent will adjust the search as necessary to add or cut out features that you might not have realized you cared about when you started. You don't need to see every house, you just need to see the one that is right for you.
That means that before you start, you and your agent should have a good long conversation about what it is you're looking for. You need to cover a lot of ground in this first conversation. The rest of this post is a list of things you should be prepared to discuss. Your agent can then set up a search that is more tailored than the consumer-grade versions available on the internet. Yes, you can do some of this yourself with Zillow or Trulia or Realtor.com, but we can help you with more fine-grained search criteria and we can also look at listings with a more critical eye to help you decide whether or not it's worth looking at them in-person.
Having said all that, these are the things you should think about before beginning your search. It might be a good idea to print this out and jot down your answers, or copy and paste it into a document. But if that is too much, it will be helpful if you have at least browsed these questions and put some thought into what you really need vs what is nice to have. It's especially important to have this conversation with any partners you may be buying the house with before you sit down with an agent.
- How much can you put down?
- Where is the down payment coming from (savings, gift from family, borrowing from a retirement account, proceeds from the sale of another property, any government first-time homebuyer programs)?
- What is the max purchase price your lender will lend on, and if you are comfortable going that high?
- What is your maximum monthly payment, including mortgage payments, property taxes, homeowners insurance, private mortgage insurance, condo fees, and any HOA fees?
- Would you consider being a landlord in a multi-family home to make the purchase more affordable?
- Do you have a particular town or neighborhood that you must stay in, or are you looking for a location with a certain set of attributes (close to a T station, near the beach, walking distance from a coffee shop, etc.) and are flexible about the town/neighborhood?
- If you commute to work, what is the maximum time you are willing to commute and how will you get there (drive, public transit, bike, walk)? Are you planning on staying at your job for the foreseeable future?
- Do you need to be near a park or open space, or do you prefer to be right in the heart of the action?
- Are there any other location specifics that are important, like being close to family or staying north of the city for ready access to the mountains?
- Do you have or are you planning on having children? How many?
- Do you need a place with room for parents to live or stay long term?
- Do you want a place where you can have frequent overnight guests?
- Do you care about single-floor living vs houses with stairs? If you're OK with stairs, do you need all bedrooms on one level?
- Do you have pets? If so, do they need special accommodations (like a house with a big yard)?
- Are you planning on having roommates to help you with the bills?
- Do you plan on working from home?
- Do you love to cook or only order takeout?
- Do you do a lot of entertaining?
- How do you spend time in the evenings or on the weekends? Always on the go, with no time for housework? Lounging? Working on projects around the house? In the yard or at the pool, or inside playing video games?
- Do you want the independence of a single-family home, or do you prefer the shared costs and reduced maintenance burden of a condo?
- Do you need to be able to make a lot of noise without disturbing the neighbors? Are you especially sensitive to hearing your neighbors?
- Do you enjoy yardwork and gardening or prefer a low-maintenance exterior?
- Do you want a turnkey home with nothing to do but unpack, or do you want to make the space your own through renovation?
- If you are open to renovation, what level? Paint and floor refinishing, or ripping out walls and doing a complete makeover?
- Are you OK with living on a busy road?
- Is it important for you to know your neighbors?
- How long are you planning on staying in the home?
- Approximately what size (in square feet) do you need?
- How many bedrooms and baths do you need? Do you need a master bedroom with an en-suite bath?
- Do you need any specialized spaces (in-home art studio, storage for collectibles, big walls for art display or TV projection, record listening rooms, space for a home gym, etc.)?
- Do you want an open-concept with attached kitchen and living room, or do you prefer separate spaces?
- Do you need additional spaces beyond a kitchen and living area (e.g., kids playroom, library, home office, separate den, etc.)?
- Do you need a yard? If so, how big?
- Do you need a patio/deck? If you're looking at condos, would a shared outdoor space be OK or do you need a private space?
- Do you have any special architectural styles or features you must have or can't live with?
- Do you want a fireplace or wood stove?
- Do you need parking? If so, what types would work (street with permit, street with no permit, deeded space, driveway, garage)? How many spaces do you need?
- Do you want something brand new, renovated recently, or historic?
- Do you want any special features like in-ceiling speakers, bidets, smart home technology, etc.?
- Are you motivated to purchase a highly energy efficient house and/or a house with solar or other renewable energy features?
- Of all the things you've identified above, what are the top five things that you NEED to have in a home?
- Beyond those five things, what are three additional "want to have" or "nice to have" things that would make this your dream home?