The occasional impulse buy can be fun. Just throw an extra treat into your grocery cart or pick up that great-looking jacket and plunk down your credit card. But a house? You don’t hear many people say, “Guess what I bought while I was out this morning?” and finish that thought with, “A house.”
It’s a good thing, too. A major decision like buying a house deserves some forethought and planning.
You’ve decided to buy. Now what?
You should take several steps to lay the groundwork for a successful homebuying experience. Start looking at homes for sale in the newspaper and online to get a feel for prices and neighborhoods. You can visit open houses and home shows, as well.
This is also a good time to get your finances in the best shape possible. The earlier you check your credit report and clear up any problems, the better. And, you may want to put off that Caribbean vacation or car purchase. Instead, consider saving your money for a downpayment and closing costs.
Get your priorities straight
You probably have started a wish list for your ideal home, even if you haven’t written it down. If you’re dreaming of a house with at least four bedrooms and three baths in a close-in location with a big back yard, modern kitchen, fireplace in the master bedroom, and plenty of closet space—at a reasonable price, of course—well, you may have to scale back somewhere. Most buyers find they have to compromise on at least one of their desires.
The more precisely you can prioritize your goals, the easier your home search will be. For example, if you decide that square footage and cost of the home are more important to you than the length of your commute to work, you may be willing to compromise on location. But if a particular neighborhood or school district tops your list—and you’ve decided that priority is not negotiable—you won’t go into a decision-making meltdown if you have to pay a little more for the home or settle for one with less space.
Line up your financing
Unless you plan to pay cash for your home, you will need a mortgage. The process can seem somewhat complex to those who haven’t been through it before—and even those who have. Take some time early on to learn as much as you can.
Even better, get pre-approved for a loan. When you do, you will receive a letter stating that you have been approved for a mortgage of a certain amount. This not only gives you the comfort of knowing you can get a loan; it also provides you with an edge if you wind up competing for a home against another buyer who is not pre-approved.
While you’re investigating mortgages, you would do well to learn about special assistance and loan programs offered by the Texas Department of Housing and Community Affairs, Fannie Mae, the Texas Veterans Land Board, and other organizations that help make housing more affordable. Don’t assume you won’t qualify for any of these programs. It’s certainly worth your time to find out.
Find someone to guide you through the process
You may wonder when during these preliminary steps you should contact a Realtor. I suggest you find one as early in the process as possible. Sure, a Realtor will help you look at homes, but you can also get the benefit of your Realtor’s expertise with all the other steps in the process. Realtors know plenty about mortgages and assistance programs. Your Realtor can discuss with you what options will help you satisfy your top priorities. You can learn ahead of time from your Realtor how offers work and what the different parts of the contract mean, so your head isn’t spinning when you’re ready to make an offer on a home you want.
By taking a few preliminary steps, you will set yourself up to make a good decision on the purchase of your home. Then you can make a nice impulse buy—say, on a new welcome mat.