Look at this adorable crazy family. Why on earth are they in boxes? Honestly, I have no idea. All I know is they are stupid excited because they just bought a house. It happens. If buying a house is in your plans for 2014, here’s what you need to know to make it happen!
Step 1: Talk to Your Real Estate Agent and Your Lender
YES. This is step 1. Even if you’re not buying until next November, it is time to put together your team! Running your credit and discussing the best loan for you (and how to make good financial decisions in the months to come so you qualify for that loan when the time comes) is the very first step. You’ll want to know:
1. What type of home loan you’re going to be getting.
2. How much of a downpayment you need to save.
3. Whether there are any dramas on your credit report you need to fix in the meantime (or things you should avoid buying, like a car!)
4. How much your monthly payment will be for the amount you’re going to borrow.
If you’re not sure how to find an awesome real estate agent or lender in your neighborhood, check out this video Anne and I made on the subject or contact me. If I’m not the right agent I’d be happy to recommend someone great who sells houses in the neighborhood you want to live in!
Step 2: Start Saving
After talking to your lender in Step 1, you should know what kind of loan you’re getting and how much you will need to put down. In addition to the downpayment, plan on another $1000-$1500 or so for inspections and the appraisal. This can vary so talk to your agent for an idea of what the costs will be for you. While conventional loans are 5-20% down, there are programs that allow you to bring less money. Downpayments range from $0 for Veterans using their VA loans to 5% for Homepath and 3.5% of the price for FHA. Find out which loan you’re getting and then save what you will need!
Step 3: Start Shopping on the Interwebz
While it can be torture to look at the houses for sale before it’s actually time to buy, this is a really important step. This way you can figure out what homes are selling for and figure out what you can afford. You can set up saved autosearches on my site here that will email you when houses you like come on the market, or you can use apps like RedFin or Zillow to track listings and sales right from your phone. Whichever tool you use, the point is to start getting a feel for what things cost, so by the time you start looking seriously you’ll already be an expert!
Step 4: Explore Neighborhoods
This is where you become a bit of a stalker. If your new years resolution is to get more exercise, consider taking strategic walks through areas that interest you. Tacoma is a street-by-street kind of town, so start getting familiar with the streets you like best and the areas you feel most comfortable. Start noticing the architecture (oooh, this neighborhood has a lot of Victorians, I like Victorians!) or whether or not the neighbors are taking care of their yards throughout the year. As you start to find your favorites, you can do research into crime stats and schools (if that’s your thing) by clicking here.
Step 5: Become a house nerd
The terminology around buying a house can be very intimidating. Title. Escrow. Points. Appraisal. Amortization. I remember feeling like I didn’t understand half the things people were saying to me in the beginning. While you should always stop your agent and lender and ask them to explain a term you don’t understand- There are some GREAT books out there that demystify the process of homeownership. My favorite is The Automatic Millionaire Homeowner by David Bach. Other ideas would be to try a service like Doorsteps (a free service that walks you through and teaches you about the whole process) or just watch the videos I’ve made with my real estate friend Anne about the different parts of the homebuying process. An empowered and educated buyer is the best kind of buyer there is!
Happy New Year!
