Steps Finding a Home to Buy

June 14, 2011

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Purchasing a home is one of the biggest decisions you will ever make and is quite the financial commitment. Some people can get through the home purchase process rather quickly while other home buyers get quite caught up in the process through analysis. Consumers who make a decision quickly usually are not buying their first home and have owned property in the past. These buyers are much more pragmatic when it comes to the real estate market, are not very afraid of making a bad decision and don’t make the unrealistic goal of finding the “perfect” home.

Some home buyers can just take forever to buy a home. They are terrified of making a bad decision, are trying to find the “perfect” home or are just scared to commit. The recent realestate blow out has made some people skiddish of making this decision as we now know that values don’t always go up. Other people just never buy because they are looking for that super duper deal that never comes along. Here in Minneapolis, MN that would be the equivalent of someone looking for a fabulous home on Lake Minnetonka with stunning views for $500,000 when the rest of the waterfront homes are selling for more than $1 million.

Buying a home is an important decision and a big decision so don’t jump into it without a plan. You may not need to find a home in a certain time frame but you probably don’t want your home search to last for the next 2 years either. If you cannot find a suitable home within three or four months you should probably analyze yourself and your needs. You might be looking for something that does not exist. Here are five tips to help you find a home in short time frame.

1. Find a Good Real Estate Agent

You don’t have to pay the commission of your Realtor even when he or she represents you. These days it is common practice for your agent to be compensated by the seller even though they still represent your interests. So why not hire a good one? If you were on trial for a crime you did not commit you would want a good Attorney right? If you were having brain surgery you would want a good Doctor right? So why not hire a good Realtor for one of the biggest decisions you will ever make?

2. Be a Pragmatist

Everyone wants to find that clueless seller that is willing to sell their home for far less than it is worth. But it really just does not happen often. You may be able to find such a seller but it usually entails years of looking and someone who is not represented by a professional real estate agent that knows the market well.

So many potential buyers despite what they say will only buy if they feel they are getting a “great deal”. These people usually never end up buying because the price is never good enough. They always seem to want to buy it at a price that the seller is not willing to sell it for.

3) Learn the real estate market

Before a buyer can make a purchase they need a certain comfort level with the market. For some people that might mean searching on the internet for properties for a few days or even a few hours while for others that might mean contacting a real estate agent and going out to see properties.

The great thing about the internet today is it is so prevalent with information and more and more is becoming available every day. Depending on where you live you can probably pull up more information than you need including who owns the home for sale, what they paid for their home, when they bought it, the square footage, age of construction, swimming pool, number of bedrooms, bathrooms even on some property searches days on market, original list price and price change history.

Once you find a good Realtor have them send you recently sold homes in the areas that interest you and start your searching. Most Realtors can actually set you up to receive an email automatically when a new homes come on the MLS that match your search criteria and area of interest. This will give you an idea of what is happening in the market and help educate you on making a good purchase. The value of a property is usually determined by what three other similar properties are selling for. If you are looking for a 4 bedroom, 2 bathroom, pool home on a golf course in St Louis Park, MN and the last three sold for $400,000, $415,000 and $412,000 then you will probably have to spend within 5% of these properties to get something similar. If you are looking for a home like this for $300,000 then you are probably wasting your time.

4) Be Prepared

Get pre-approved for a loan or at least plan out your financing before you go to look at homes. The last thing you want to do is find your dream home only to later learn that you cannot afford it or cannot get financing for it. Lending guidelines have significantly changed over the last 5 years. Some people might think they can borrow $400,000 for their home purchase when in reality they can only borrow $300,000. It is better to get your price range secured before you spend time looking to buy a home.

Another step in preparing is figuring out what you want. Any and all decision makers need to sit down and make a list of their needs and wants. Figure out what can live with and without. There is a good chance that you will have to make a compromise. Even buyers in the luxury price range make compromises. Having a good understanding of what you want is imperative otherwise the buying process will take much longer.

5) Get to Work

Finding the best home involves getting out there to see homes. You are working with a great real estate agent, confirmed that you can finance the price range you are looking to buy a home in, established a list of your needs as well as your wants, researched the market to see what is available for sale in the MLS by following sold properties. Now it is time to go and find a home. Make appointments to see the homes for sale in the best neighborhoods that you and your Realtor determine to fit your needs and wants.

Finding a home to buy can be difficult but if you take it in steps and work with a Realtor that knows what he or she is doing this can be an efficient and fun process.