The Basics of Buying a Home

Buying a home can be overwhelming, especially if you are a first time home buyer. It requires you to make many decisions, which can cause stress.  One could compare it to going to the airport, as it seems all you do is hurry up, then wait.  Apply for the loan, then wait to be approved.  Make an offer to purchase your dream home, then wait to see if it is accepted.  Set the closing day, then wait to see if all the many details fall into place in time.

By doing your homework and partnering with the right real estate agent, you can be assured a less stressful experience. And remember, buying your dream home is so totally worth it.

Below are a few questions to get you started on your home buying journey.  It does not include all of the questions you will need to answer in the process of buying a home, but it will get you started as you consider who you will hire as your real estate agent.

On Your Way to Buying a Home One Question at a Time

  1. What can monthly mortgage payment can I afford including insurance and property tax?
  2. What do I want in a home and want do I need?
  3. Who will be my real estate agent?

You may want to dedicate a notebook and folder for keeping notes and gathering information.  It will become your personal bible to finding the perfect home.

What can I/we afford?

Know your numbers!  If you’ve never had a household budget, this may be a good time to write down the money coming in and going out.  

When you know what you can afford you won’t set yourself up for disappointment when house hunting, or worse yet when you have a beautiful home but can’t afford to furnish it. There are many online calculators available, which can assist you.  A standard rule for the lender is that your mortgage payment (including principal, interest, tax and insurance) should not take up more than 28% of your income before taxes.  This is called “housing ratio”.

And just because the calculator says you can afford it doesn’t mean it will work for you.  It is a guideline.  Ask yourself, “What am I comfortable with?”

What do I want and what do I need in a home?

If you are buying a home with spouse or partner it is especially important to discuss wants and needs.  You may not necessarily be on the same page with everything, but at least you will have a starting point.  Once you have made the list, prioritize the list and determine your deal breakers.  

This list, along with knowing what you can afford, will let your real estate agent know you are ready to buy, which will allow them to do a quality home search.

Here is a short list of things to consider when making this list:

  • What are the minimum requirements for:
    • # of Bedrooms
    • # of Bathrooms
    • Overall square footage
    • Garage size
  • Structure
    • Do you need a basement?
    • What style do you prefer?
    • How many stories?  (Are climbing stairs a concern?)
  • Exterior Features
    • Do you want a no maintenance exterior such as vinyl siding or brick?
    • Gardens/Landscaping - Do you enjoy working in the yard?
    • Outdoor entertaining - Patio or deck
    • Do you need a fenced in yard for pets or privacy?
    • Pool/Hot Tub
  • Interior Features
    • Flooring preferences
    • Open concept
    • Laundry room location
    • Granite countertops
    • Handicap accessible
  • Heating and Air Conditioning
    • Age of equipment
    • Energy efficiency
    • Central Air
    • Forced Air
    • Fireplace/Woodstove
  • Fixer upper or move in ready
    • Do you have the budget to make changes? How extensive?
    • Are you a DIY person or would you hire a contractor?
  • Location
    • Schools
    • Commute
    • Easy access to entertainment and desired activities
    • Waterfront
    • Views
    • Cul-de-sac
    • Quiet Neighborhood
    • Neighborhood with same aged children

Who will be my real estate agent?

You’re a serious buyer and you’re now ready to hire a real estate agent.  Where to begin?  

Start by choosing an agent that knows the area you intend on purchasing in.  The agent should be very familiar with homes that have sold in the area you will be buying and in your same price range.  They must know your market.

If you know a friend or business colleague, who owns a home in the area you intend to purchase, ask them for recommendations.  If you are completely new to the area browse the online listings and take note of agents that present well.  

Start making a list of possible agents, which can be narrowed down with further online investigation and interviewing them by phone or in person.  Forbes article, “How to Vet a Real Estate Agent:  10 Questions to Ask Before Hiring”  will prepare you well for this phase.

Being prepared and hiring a professional is key to having an enjoyable and less stressful home buying experience.  

And of course, if you’re buying or selling in the Red Wing, Hastings, Zumbrota, Inver Grove Heights area, or anywhere in between, I can certainly help you!

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