Once you have made the decision to buy — whether you're downsizing, upgrading, relocating, or becoming first-time homeowners — you'll want to take some initial steps to smooth out the process: choose a realtor, get pre-approved and refine your search.
CHOOSE A REALTOR
Real estate agents advocate on behalf of their clients while guiding them through all steps of the home buying process. They can also be valuable resources for finding other licensed professionals including loan officers, inspectors, closers, contractors, and more. Realtors get paid for their services via commission, the majority of which has historically been paid by the seller.*
How do you choose a realtor? Start by asking trusted friends and family members. Most often people get connected through referrals. If your friend or family member had a good experience working with someone, you might too. Depending on your process, you may be spending a lot of time with your agent, so choose someone you like and trust. Communication is also key. Your agent should be conscientious about communicating and skilled at using multiple means for connecting with you and other professionals involved in the transaction.
A good agent will be on your side, listening to your needs and wants, advocating, and negotiating for you throughout the process. Choose someone you believe is doing so because they genuinely care about helping you find exactly what you want in the smoothest possible way.
GET PRE-APPROVED
If you want to make an offer on a house (and plan on financing it) you will need to get a pre-approval letter at the very least. Getting pre-approved differs from being pre-qualified in that it requires more than simply applying for a loan. Pre-approval involves an in-depth analysis of your financial background including credit history, employment verification, assets, etc. The process will provide you with a more realistic picture of what your payments and interest rate might be, and help determine in advance how much house you can afford.
Sellers will always favor pre-approved buyers who demonstrate their ability and intent for getting the actual mortgage. A strong pre-approval from a reputable lender is an important piece that will give you an advantage over competing buyers. It's best to get it done ahead of time to avoid a delay when submitting an offer and possibly losing out on the perfect home.
REFINE YOUR SEARCH
An infinite number of factors can help determine your needs and wants when buying a home. Common considerations include things like schools, commute time, space, walkability, neighborhood preferences and of course price. You may also be deciding between a single-family home or condo/townhouse lifestyle. Make a list of what you're looking for — decide what you can't live without and what could be a deal breaker.
Once you've narrowed your focus and established parameters you can more efficiently make use of online tools to help with your search. Your agent can also create an automated search using your criteria, enabling you to receive email notifications of new MLS listings as soon as they become active in the database. This is an easy way for buyers to access the most accurate and up-to-date new listings, and especially useful when competing with other buyers in a hot seller's market. Of course you can perform your own searches on sites like Zillow, but be aware that listings you see may be inaccurate or out-dated. Check with your agent before getting your heart set on a house you find online. Next step after finding homes? Set up a tour!
* As the industry evolves payment for real estate services may change.
Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes a blog to share information on a variety of real estate related topics including buying and selling, market conditions, homeownership trends and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.