Dos & Don'ts of Home Buying

So you are thinking about buying a home in the near future. Here are some key tips to help you along the way.

While many people think the process is simple, it does require consideration of not only where you want to live, how many beds and baths, and how much you can afford. Following this outline can save you a lot of time and trouble along the way to ensure you can reach your goals.

First and foremost, most people think they just hop online and find something and call the realtor listed as first time home buyers, or call their friend that is a realtor and neighbor that is a lender. Wrong! Let's start with the very basics.

Before we begin to take a single step toward our new threshold, first we must consider the following Who, What, How, When, and Where:

1. Who do I want to be my A Team buyer's agent and lender? These are people you should be able to speak with directly and sometimes our friends and family are not ideal. Who will be my insurer? Do I have some connections and if so, are they reliable for what I am trying to achieve?
2. What is the current interest rate and how long do I want to finance? Do we have money saved?
3. How much can I afford every month for my mortgage? How much are taxes?
4. When do I want to move into this home? Are we going into hurricane season etc.?
5. Where do I want my new home to be? Where in the suburbs or town? Where are the conveniences and or schools and how far am I willing to drive for work and necessities?

Once we have answered these questions, then we can delve into details of each and why it is SO important to partner with the right A TEAM of realtor and lender to guide you in the process. The first step is pre-approved so you know what you can afford from your lender and your realtor can assist with matching homes to that value with the attributes you want.

Steer clear of someone promising the moon but cannot even deliver a flashlight. Avoid those trying to make a ton of money on loan origination and realtor commissions for a house you cannot afford.

Let's dig into finances. Finances are not only considerations of what we make or can afford every month, which is also influenced by interest rates, but how much unexpected repairs will set you back.

Consider this scenario. I buy a house and that house has an older AC unit, because let's be honest AC is a requirement in Houston Texas. I know the life of that sucker from my inspection is short but I have a home warranty to go with my cute little bungalow my friend Suzie turned me onto (even though Suzie never negotiated repairs or money back). Year one passes and my home warranty lapses because I decided I did not have anything go wrong year one and I wanted to take that cruise to Alaska. What could possibly happen? BOOM I hear a crash and the AC has gone out mid July!

I call Bobby the AC repairman. He comes out and says it is the condenser and the replacement cost if $7000. Well guess what. I have not saved and am maxed on credit cards from my cruise. Now I am trying to figure out a way to replace that AC as I sit in my hot kitchen strapped for cash hearing my father's words play back in my head you should be more thrifty.

While I had more money to put down and could have, but my neighbor lender told me he could get me in a home with very little money down even though I had 25% which would have put me over having the minimum threshold to do away with my PMI which adds another $300/month to my payment. He and my agent also failed to counsel me that I could potentially have the seller buy down my rate OR better yet, could have negotiated the AC replacement which would have also saved on my high electric bill all year. We have to be smart with our money because let's face it, it does not grow on trees.

I think you get the point. It is very important to surround yourself with trusted advisors in the home buying process and find your A Team. We have to know all option and what we can afford is based on the interest rate, as well as taxes and insurance, or what is commonly called escrow. Escrow is the estimate of taxes and the monthly fee for insurance for the next year.

Next we want to look at when we want to move and when we are able to move. Sure you may want to move into your new house in June 2024 when everyone else is home shopping because school is out. However, if you have the ability to do it before June or maybe even after August there is a trend for values to decrease later in the summer and early fall. It often cycles around school.

Finally, we are on the Where and What I look for in a house. What are my specifics?

How many bedrooms and baths?

Do I need a garage?

How old of a house do I want to buy?

Do I want one story or two?

Are schools and the district important? If so, what aspects are for my family?

What part of town do I want to be in? Can I afford the area?

What are the taxes on the house?

Is a brand new house in the suburbs that is brand new going to maintain it's value while I drive 100 miles to work everyday? 

Now you have examined the big questions. Considered them and weighed your decision. Time elapses and your search concludes. You made your offer and it was accepted. Now what?

Here are the Don'ts once you are locked in with your lender until your receive the keys:

Do not quit your Job

Do not make large Cash deposits

Do not open new credit cards, take on other loans OR buy a new car

Do not Change Banks

Do not CoSign on another's loan

Do not spend elaborate money

Do not make deposits of unusual sizes from Venmo, Zelle or Cash Apps.

Here are to Dos:

Pay your bills on time

Get your appraisal and inspections done

Continue to deposit your payroll checks

Get a Home Warranty if it is not in your contract

Find a list of service providers such as repairmen

Look but do not buy items you need. Especially if they are big ticket items.

Find an insurance agent to bundle and save

Find a lawn service

Prep to transfer utilities

Prep to get your mail service changed over to a new address (get the form)

Congratulations! You closed and you are now in your new home. Once closed, get your mail transferred, change your license and file YOUR HOMESTEAD EXEMPTION!

Continue on with the maintenance and make memories in your new domain.

Should you have any questions, please feel free to reach out. I am always eager to assist another in the search for Unicorns, Leprechauns, and a Pot of Gold on the home buying journey.