When it comes to shopping for a new home, it’s important to know that there have been millions of people before you who have gone through this exciting process.
Along the way, they’ve made mistakes.
We’ve talked to seasoned professionals who have witnessed firsthand the common “uh-ohs” that new homebuyers tend to make. Here are their recommendations for dos and don’ts of shopping for a new home.
Don’t start the process underprepared.
“Know your budget (pre-approval for a loan will assist with this), the neighborhoods you want to be in or want to avoid and the specific deal-killers,” says Sam Gonas, a licensed real estate broker and attorney based in Miami Beach, Fla.
If you do your research correctly, you can help whittle everything down to a correct price range and nail down your must-haves and your nice-to-haves.
But if you begin the process without settling on an appropriate price range, you could be disappointed by how things don’t look as nice as the pricier homes you toured, says Gonas.
Efficient research is also important from a loan perspective. This way there is a little more wiggle room in case unplanned circumstances occur.
Don’t get emotionally attached.
“Do not fall in love with a house without checking it all out first,” says Rob Levy, principal broker with Keller Williams Realty Professionals in Portland, Ore.
Don’t just think about acquiring the home, consider its resale value, he says. Inspect its location and the proposed siting, and, most important, how livable it is for you.
“Make sure that you are thinking financially first, and living with your budget,” says Scot Smith, president of Salt Lake City, Utah-based CreditRepair.com. “Too often buyers get emotionally connected to the idea of buying a home in a specific neighborhood or of a specific size, rather than buying the home that matches their financial budget.”
This heartbreak can be avoided with a little self-honesty and a little planning.
Don’t be impatient.
Don’t rush your search — really research areas and builders to find the right fit.
“Finding a new home can take some time and there will likely be some stressful moments during the search,” Gonas says. “Keeping your emotions in check will prevent you from making rash decisions and settling for something suboptimal.”
Do your research.
“Slow down and do your research,” says Levy. “Think about where your life is. Think also about livability.”
Is this an easy commute to work? Where do your friends and family live? Is it a good neighborhood? Can you enjoy the environment and get back to all your favorite hobbies?
It’s also extremely important to research your budget. If you find that you are nearing your budget cutoff while on your new home hunt, Smith suggests asking yourself the following questions:
- Is it possible to find a more affordable home in the same area?
- Could future expenses affect my ability to pay my mortgage?
- On a scale of 1 to 10, how would I rate my job security? Is now the right time to buy?
“The answers to these questions will gauge your buying power,” says Smith. “Don’t get lost in abstract math — find the best solution for your budget.”
Do walk away if the home or builder is not the right fit.
Opposed to allowing your emotions to take over your attachment, treat each new home tour like you’re the boss — a nice and understanding boss.
“If … you feel like the purchase just isn’t right for you, before you commit to a contract, be willing to simply walk away and look for other properties,” says Gonas.
But on the other hand, be willing and able to quickly pull the trigger on a home that you feel is right for you and your budget.
“Delaying whether to submit an offer often leads to missing out on the property and heartbreak,” he says.
Do keep it real.
Finally, what will save you the most pain and agony will be to gather all your financial information well in advance.
“Your lender will keep you informed of any financial documentation you will need to provide,” says Smith, “but be prepared to provide tax records, including copies of tax returns and other relevant documents, for at least the past two years.”
Also be prepared to provide proof of employment and recent bank statements for your lender to document that you have the available funds for things like down payments and closing costs, he says.
Additionally, Smith says to pull your credit report early enough to make sure there are no errors or surprises, which can take the form of late payments, collections or accounts you have not authorized. And be sure to correct these issues long before applying for a mortgage.
Make sure you keep it real: keep your views on how much you can afford realistic and make sure you stick to a stringent budget.
And if all else fails, just remember this bonus tip: Communication is key!
“Having a clear line of communication with your (builder) will help you avoid many of the common problems that arise from being unprepared,” says Gonas.
“Communication is essential to a good homebuying experience — they can’t help you if they don’t know your wants and needs.”