Buying a new home is so much more than just touring a home and getting a mortgage. You need to understand your budget, the mortgage process, how to find the right home, and how to navigate the ins and outs of the purchase, from the offer through the closing. Buying a new home is a big financial transaction, so having a real estate agent to guide you through the process is the best way to start.

Young couple in their first house.

1. Understand Your Budget Early

The first step in buying a new home is to understand your budget. There are many online calculators that can help you understand how much you can safely spend on a house. You’ll set your budget based on your income, debt, down payment, credit score, and location. Generally speaking, you should plan to spend no more than 25-30% of your monthly take-home income on your housing expenses, which needs to include your insurance and taxes-these 2 items are not typically included in the online mortgage calculators, and they can add up to a significant amount so do your homework before setting your housing budget.

2. Get Your Finances in Order

Before you start shopping for mortgages, make sure that you understand your financial picture. This means knowing your credit score, amount of debt, income, and savings you have for your down payment and closing costs. Look at your credit report and take care of any potential issues before you begin shopping for a mortgage. If you don’t have savings to use for your down payment, start building that nest egg asap.

3. Look at Your Mortgage Options and Get Pre Approved

Once your finances are in order, you can begin to look for a mortgage. There are several stages to getting a mortgage. The first step is pre-qualification. In most cases, the pre-qualification is based on only a basic understanding of your finances and will just give you an idea of what you may be approved for later in the process. The pre approval is much more comprehensive. A lender will offer to loan you a certain amount with specific terms. For a pre approval, a lender will pull your credit report and review all your financial documents. This is the time to begin shopping around for the right mortgage for your situation and see if you qualify for any programs. Using a mortgage broker can help you through this process.

4. Find a Real Estate Agent You Can Work With

Once your finances are settled and you know what you are working with as a serious buyer, you can begin to look at homes with a real estate agent. Buying a new home can be an overwhelming process, and the agent is there to take you through the process with the least amount of stress. Choose your agent carefully, especially if you are a first-time buyer. Ask for referrals and meet with a few agents before deciding on a real estate agent you can work well with. You will be spending a lot of time with this agent, so you need to make sure you find an agent you can connect with.

5. Make a Wish List for Your Home and Neighborhood

Take everything into consideration and make a list of your “must-haves” as well as your other wishes. If you have your heart set on a walkable neighborhood, your agent should not waste time showing you homes on a busy street. Consider if you are looking for a starter home or forever home and take those things into account when you are making your list.

6. Visit Open Houses and Begin Arranging Showings

Open houses can be a great way to get a sense of what you are really looking for in a home. In an open house, you’ll be able to view all the details that you can’t see in the photos and description online, and it may help you narrow down your search and find the properties you would like to see. When looking at homes, either at an open house or an arranged showing with your agent, make sure you focus on the details. Go outside and listen to the traffic noise. Notice the size of the closets, any smells in the home, and the floor plan. Ask questions about the age of the roof, the plumbing, and the furnace.

7. Have Your Agent Guide You Through Your Offer and Negotiation

When it’s time to make an offer, your agent will help you put together your initial offer and then help you negotiate the final amount. You may ask the seller to lower the price to cover repairs or ask for the repairs to be made in advance. Your agent will understand the market and help ensure that you get the home you want at the best possible price.

8. Get a Home Inspection

Buying a new home can be stressful enough, but finding a problem with your new home after the purchase can make things even worse. Most lenders will insist on getting the home inspected prior to the closing. As the buyer, you are usually allowed to attend the inspection and ask questions. Professional inspectors will ease your mind that the home you are buying is sound.

Buying a new home for the first time is a big undertaking. Using a good real estate agent will help you navigate the process and help you find the right home. We’d love to help you through the home buying process. We have the local market knowledge you need, so let’s set up a time to talk about your dream house! Take the first step toward homeownership by contacting Amberwood Real Estate today.