I wish buying a house was as easy as seeing a house you like, putting in an offer that day and moving forward. And it actually can be! You just have to make some steps before that.
Three-six months out
Three to six months before you put in an offer, it’s all about finances and getting yours in order. Start saving for a down payment and closing costs, and have a paper trail for major financial transactions that happened in the last year. During this period, start looking at homes online, determine a location and make a list of must-haves and nice-to-haves.
Two months out
It’s time to find your trusty team! First, you’ll need to find a real estate agent. Look for someone who is educated about the process and genuinely has your best interest at heart. Then comes your lender. If you don’t know any, ask your agent; he/she will likely have several to recommend. I highly recommend chatting with several mortgage brokers to find the best rate and see who you “click” with the most. They will then work with you to start the process of getting pre-approved. Once you have a pre-approval letter, you are one step closer to being able to make an offer on your dream home. Also, know that most mortgage pre-approvals are good for 60 to 90 days. If your search goes beyond that, just resubmit your application to last another 60 to 90 days. This is huge: don’t open ANY new lines of credit or buy big ticket items until you have closed on your new home. These are red flags to the mortgage department, and it will send the transaction back through underwriting…taking more time.
One month out
You now know how much you can afford, so start house hunting! In this market, things are moving FAST. Good thing you have all your ducks in a row and are ready to make a move! If you see something that goes on the market and you are REALLY interested, check it out as soon as you are able (like that day) and make an offer ASAP. During this process, remember to stay strong and optimistic. It could take awhile for a home that matches your criteria to hit the market or you could lose out on a couple offers. Chat with your agent about the competition you face. Once you submit an offer, the seller has a deadline to respond: typically one or two days.
In short: finances, gather your team and get pre-approved: those are the three main steps to buying your dream home. Next week, we’ll chat about the timeline sellers can expect when preparing to put their home on the market.