The recent uptick in the real estate market reminds us that the American dream of home ownership is alive and well. Many people experience a sense of pride and security knowing that their sanctuary actually belongs to them. If you find yourself scanning real estate listings and watching one virtual tour after another, it may be time for you to jump in. But before you do, you need to take a few steps to get prepared.
First step is to figure out what you can comfortably afford. The operative word here is comfortable – you won’t be enjoying that new home if coming up with the monthly expenses is a constant stretch. So establish the parameters. How much money do you have for a down payment; though larger loans might be available, the 20 percent formula is a good place to start. If you’ve got $100,000 to spare, you can consider that $500,000 house, $60,000 puts you in the $300,000 range.
Next step: the bank. Before you actually go house hunting, you need a mortgage pre-qualification letter from a lending institution. Start with a bank where you have an account. They will have you fill out an application and review your income and financial status. If you qualify for a mortgage, they will give you a letter to that effect.
With letter in hand, you are ready to actually start looking at possible home candidates. Before you do, you’ll need to choose a neighborhood you like and a broker who specializes in that area. You may choose an area based on any number of criteria: its proximity to your job, or family members, convenience to services, leafy streets, or collection of older or newer homes, whatever your preference.
It’s wise to choose a broker who is established in your chosen locale; he or she is likely to have listed the homes you will look at, and has the neighborhood buzz.
Now the fun begins; the part you’ve been waiting for. It’s time to get out there and see what’s available. Start with a drive by of your neighborhood. Jot down the streets you like and look for signs; just generally case the area. There may not be a house for sale on your favorite block, but it might pop up next week. Finding the right house is a process, and the more informed you are, the more likely your search will result in a house that you love, is in the right location and that you can afford.
In the next issue, we’ll look at the differences, costs and benefits of condominiums versus single family houses, and you’ll have to decide which is the better option for you. Houses and condos come in all shapes and sizes, styles and configurations. As you make your search, you’ll begin to have a sense of what’s important to you. If you’re getting older, think twice about selecting a two story; as pretty as it might be, after the 100th time of climbing up stairs when you forgot your glasses, you might regret your decision.
If you’re not super handy and like puttering, it’s wise to look for a newer or recently renovated property. If you love to garden, a smaller house on a larger property might be the ticket for you. Some people are nesters and like a cozy space; others crave light and expansive rooms. You may not get everything you want, but the right house will fulfill your most important criteria, whatever that might be.
As the market for houses improves, you may have to make a decision quickly when you do land on the property that is in the right location, has that must-have quality and is within your budget.
If you’ve followed these steps, you will be ready when all the stars do align. Good luck and happy hunting!
Del Phillips is a California Licensed Real Estate agent. He is a member of the National, California and San Diego Association of Realtors. You can reach Del at Ascent Real Estate at 619-298-6666 or at Del@DelPhillips.com DRE LIC #01267333
