After months of planning and thinking, you’re finally ready to buy your first house. You’re anxious to tour open houses on the weekend and schedule showings with a real estate agent to get the ball rolling. However, what a lot of first time home buyers don’t know is that the ball starts rolling even before meeting with a real estate agent.
While HGTV shows the home buying process as solely touring homes, there is a lot paperwork and planning involved to make it all happen. Before meeting with a real estate agent, there are a few documents that you should have in order. This will help to streamline the home buyer process.
Before meeting with a real estate agent, you should shop around mortgage lending companies for a preapproval letter. This preapproval letter shows real estate agents and home sellers that you are qualified for a certain loan amount to buy a house.
This loan amount is based on your credit score and history, debt to income ratio, and more. It’s important that you remember to talk to a few different lenders. Not all lending institution offers the same interest rate.
Proof of Funds
Saving up for a down payment can be overwhelming and almost feel impossible. However, before meeting with a real estate agent, you should have proof that you have the funds for a down payment.
Typically, a down payment is equal to 20% of the house’s sale price. There are other options, though. Depending on where you live, you may qualify for down payment assistant or first time home buyer programs and grants. These will take you one step closer to owning your first home.
Just because you have been approved for a certain loan amount, doesn’t necessarily mean that you should use all of it. Take some time and work out a monthly budget for after you buy your house. This should include your mortgage payment, homeowners insurance, utilities, property tax, and other expenses reoccurring expenses such as groceries, car payments, and insurance. You won’t just be paying your mortgage each month. There are hidden costs when you buy a house.
So, after you work out your budget, you will have a realistic amount that you can spend on your house. When you create a budget before meeting with a real estate agent, you can spend less time looking at homes out of your price range and more time looking at homes you are more likely to buy.
List of Requirements
Lastly, you should make a list of what you and do not want in your home. This should include the number of bedrooms and bathrooms, amenities such as a backyard, and the neighborhoods you would like to live. When you make this list before meeting with a real estate agent, this can give your agent more direction on what you are looking for and what they should be showing you. Don’t worry, you can adjust this list as you see fit.
Are You Ready to Meet with a Real Estate Agent?
After you have all of your documents in order, you’re ready to meet with a real estate agent! Ask your friends for recommendations or look online and read reviews to find an agent that is right for you. Remember, you don’t have to work with the first agent you meet with. It’s important to find a good fit for you and your agent.
About Agent Lady: Cherise Wynne is a leading real estate agent in Philadelphia, helping home buyers and sellers navigate the City of Brotherly Love, with a special focus on first time home buyers. To chat about getting started with your first time home buying experience, click here.