You’ve prepared yourself to buy a new home in every way possible, but now it’s time to actually go out and do what we’ve been talking about doing. If only it were as easy as handing someone money and—poof—you’re a homeowner! Well, actually, you are just giving someone money for a house, but this is where things start to get complicated. (As if they haven’t been complicated already, right?)
After driving around a few neighborhoods and keeping a diligent eye on listing platforms like Zillow, Redfin, and the MLS (which you can access through a real estate agent) you should start to form an understanding whether the types of properties you want to buy—and those that meet your financial goals—actually exist. It’s your job, not your real estate agent’s, to determine what you want and whether those wants are realistic.
Let’s say that again. It is your job—not your real estate agent’s—to determine what you want and whether those wants are realistic. You are the one who will be living there, and you are the one who will be paying the mortgage. Your agent can help guide you toward homes that fit the parameters you have set up, but your agent should not be deciding what you want.
In order for your agent to help you transact on the right house, you will need a crystal-clear definition of what kind of purchase you are willing to make. Plus, the more you know in advance, the less likely you are to be distracted by a feature in an otherwise unsuitable home. (As much as we love smart lights and phone-charging stations, they probably aren’t a top priority.)
Start your house hunt right
1. What is the maximum price you’re willing to pay?
To help with this, take your price and run it through a mortgage calculator. This will give you an idea of the monthly payment you would be making on a home at that price. Make sure you also include home insurance, property taxes, and any extra fees like private mortgage insurance (PMI) when estimating your monthly cost.
Depending on your market, there may be some benefit to looking at homes slightly outside of your prescribed price range. A seller may be willing to take a lower offer than the list price.
However, if you do decide to look for lowball opportunities outside of your price range, it’s important to keep your head on straight. You’ve already decided a maximum price—if they don’t accept an offer below that price, you have to walk away.
2. How much house do you need?
Of course, you should know the number of bedrooms and bathrooms you’re looking for, and we strongly recommend having at least two toilets. (In addition to the obvious disadvantages, a home with only one bathroom is outdated—yes, even if the rest of the home is remodeled. Houses with two toilets sell faster and for more money than houses with only one.)
Also consider whether you need a home office, basement space, or garage space, and how big a yard you’ll want, and make sure you’re thinking five to seven years in the future. If you plan on expanding your family or currently have small children, take that into consideration. (Spoiler: They get so much bigger!)
Buy your first home with your eyes wide open
This is a modified excerpt from First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen. To get more first-time home buyer tips along with some great bonus content, get the book in the BiggerPockets Bookstore!
3. Where do you want to live?
Location, location, location—it’s the one thing you can’t change about your home. You probably know what city you want to live in, but are there other options nearby that may also work? Compare the resident amenities like recreation centers, city parks, and downtown features like shopping and restaurants. There may be better cities for you than the one you’re attached to—or if there aren’t, that information will help cement your original choice.
Then, zoom in on the smaller details. One thing you might be tempted to ignore is your personal commute time. Though houses might be better on the other side of town, do you really want to spend hours each day commuting to and from work? When considering a home that would add to your current commute, we strongly urge you to drive your expected route during rush hour to see just how bad it will be. If sitting in traffic and spending more money on gas is your idea of a good time, go for it! (If you work from home, the world is your oyster.)
While it may sound irrelevant if you don’t have children, buying a house in a good school district is always a plus. Homes in a good district sell faster and for more money than houses in a mediocre or worse district. Kids or no kids, you’ll still enjoy the benefits of that district when you go to sell. However, a good school district often comes with higher property taxes. Make sure those higher expenses are worth it by looking at similar homes in both districts—at least online—to compare pricing.
Last but not least, some parts of the country have huge floodplains while others have smaller ones or none at all. If your property is located in a floodplain, you’ll need to purchase flood insurance, which can be quite expensive. Flood insurance is available only through the federal government, which unfortunately means no price shopping.
4. How updated should the home be?
Are you looking for something more polished, or something with which you can force appreciation? If the latter, you should know which projects you’re willing to take on. Home renovation shows might be a great source of entertainment (move—that—bus!), but the projects on TV are never as simple as they seem. You might walk into an older home and think, Well, I can just tear down that wall to open up the kitchen. Instant value-add! Though the idea is tempting, you might regret that decision down the road.
Make sure you consider your DIY skills before diving into showings. What projects might you be willing to tackle to add value to a home? What’s completely off the table? This depends entirely on your own abilities, or at least your willingness to learn any new skills needed to execute your plans.
You might be happy to update the paint, landscaping, and appliances but not be willing to commit to any major projects that involve a contractor (like moving walls, repairing the foundation, updating the electrical service, fixing the roof, or any other high-ticket items). Maybe you’re fine replacing the floors, but you don’t want to deal with windows. Just make sure you know your limitations so you can avoid those items should they come up.
A basic understanding of big-ticket problems will help you immensely. Follow our DIY inspection checklist to learn what to look out for. Red flags like mold, water stains, or cracks in the ceilings or walls can indicate major leaks, for example. These signs of water damage might instantly knock a home from the running—and save you money on an inspector.
Important note: We recommend all home buyers hire a home inspector during closing. However, a keen eye for potential problems means you’ll notice problems sooner and make decisions before the offer stage.
5. What features are an absolute must?
A house should suit your lifestyle and preferences. Make a list of the things you can’t live without. Do you need a big kitchen? If you’re a big entertainer, you might want an oversized patio. Or are you a woodworker who needs significant garage space? What about a school district—do you care? If you don’t want to renovate, does the current floor plan and home design suit your tastes?
6. What features are complete deal breakers?
Likewise, make sure you write down anything you can’t live with, like a high-maintenance backyard or being adjacent to a busy street.
Knowing the answer to each of these questions will give you a clear idea of what you want. That way you’ll be able to keep your eyes on the prize when you start looking at properties in person.
You should be able to make three lists that you can send to your agent: must-haves, nice-to-haves, and deal breakers. Sometimes your price range means that you can have it all, and sometimes your price range means you’re going to have to make sacrifices. These lists can help convey to your agent what is important to you—and help keep you on track when you see the shiny bells and whistles of an updated home.
Using this information to start your search
Now that you have a crystal-clear articulation of the perfect house—and based on recently sold homes, you know that the perfect house is out there in your price range—you should ask your agent to pull up their multiple listing service (MLS) and search by active properties in your price range. Before you start narrowing down your options, you’ll want to see how many are available in your price range alone.
If you’re looking at 157 houses to choose from, that can start to get overwhelming—so it’s time to start adding your must-haves and nice-to-haves to your criteria to narrow down the options. Bedrooms and bathrooms are a great place to start. (Remember, having two bathrooms is much more desirable than having one.)
Continue to add other items from your must-have list until you are looking at fewer than thirty properties, then ask your agent to set you up to receive these listings via email once per day when you’re just starting your search. Spend a few days getting a feel for what is available and at what price, and once you’re ready to make a real move, you should change the frequency of your notifications to instantly alert you when a home is listed.
Make a point of viewing your notifications at least every morning and note any properties you’d like more information about. Not all MLS systems are the same, but your agent should be able to look up any address and see whether the home has been listed in the past. Once you’ve gone through the initial list of properties and chosen which houses you would like to see, set up a time to view them with your agent.
While finding a home can take weeks or even months, finding the one takes thirty to forty-five days of searching on average. The fewer deal breakers you have on your list and the more cities you’re open to living in, the easier it will be to find a suitable home. Conversely, the more particular you are, the longer it will take.
There is no right answer—you like what you like, and even better, you know what you want. You’ve set yourself up for success by avoiding any rushed timelines, so if it takes a little while to find your home, that’s okay, too.