You've crunched the numbers, thought about your lifestyle and made the decision to buy a home. It can be a complicated and stressful process. But knowing what to expect can reduce some of that anxiety and help you confidently find your way to your new home. Below are 6 major steps on how to buy a home.
1. What Do You Want in a House?
You've probably been daydreaming about your ideal home for years, but keep in mind, your needs can change. On average, it takes about five years to build enough equity to offset the costs of buying a home so it's safe to plan for the long-term. Think about how your needs might evolve over time, are you downsizing? Planning for a family? Are you moving to be closer to work? There's no perfect home. Finding the right home is about making the right trade-offs.
2. Credit Score
Before contacting a lender, it's smart to check your credit report. By law, you can get a free report once a year through Annualcreditreport.com. The report pulls data from the three major credit-reporting agencies: Equifax, TransUnion and Experian. Having the information in hand before you talk with a lender lets you dispute any errors in the reporting. The higher your credit score, the lower the interest rate on your mortgage. So what is a good credit score? You can expect a good mortgage rate at anything above 720. Homebuyers who pursue an FHA loan can usually secure a loan if their credit is 580 or over.
3. Get Pre-Approved for Mortgage
Mortgage pre approval should actually occur quite early in the home buying process. Be sure to tell your lender your budget and goals to see if they're realistic. In order to pull your credit history, lenders usually need some paperwork from you. Just because you get preapproval from a lender, doesn't mean you're locked in. Interest rates vary on a lender-to-lender basis, so look around.
4. Get a Real Estate Agent
Most home buyers will want a great real estate agent, specifically a buyer's agent, who will help them find the right houses, negotiate a great real estate deal, and explain all of the nuances of home buying along the way. There is a subtle difference between a real estate agent and a Realtor; the latter is a member of the National Association of Realtors and adheres to a code of ethics. Consider having a Realtor additional insurance that you'll get the help you need to ace the process.
5 House Hunt & Make Offer
Start touring homes in your price range. It might be helpful to take notes on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or video to help you remember each home. Take as much time as you need to find the right home. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood.
Prior to the closing date, the buyer will want to verify with his or her agent, lender, and escrow company that all of the necessary documents have been signed and terms met. If they have not this should be taken care of immediately to ensure that there are no last-minute problems. The buyer will also want to verify what forms of payment are acceptable. On the closing date, closing costs and fees will be paid.
"Who are you meeting for lunch this week?"
Without fail, my former boss would ask me this question in every weekly status we had. And I dreaded the question. Because my answer was generally a stammering "Umm… No One." Occasionally I could remember what I actually had for lunch. And almost always it was sitting in my windowless cube eating a soggy sad sandwich.
I didn't understand why "who I had lunch with this week" was worthy of being a topic on our weekly status. After all, I was only 6 months into this new job. I was still figuring out how to pull data from Nielsen. I was still figuring out how to write an innovation brief. I was still trying to figure out where the bathrooms were in this maze of a building.
And despite knowing this question would come up in every weekly status, I was reluctant to change my behavior. I didn't see the value in the question. I didn't see the importance of it in my career. I didn't understand why I had to have lunch with anyone.
Because I hated the idea of having to network, to meet people, to put myself out there. Because networking was something slimy and strange and weird and scary. It made my stomach hurt, my throat go dry. And I could feel a faint headache coming on.
Even Oxford's definition of networking only reaffirmed my fears of what networking looked like: the action or process of interacting with others to exchange information and develop professional or social contacts.
Because please don't ask me to walk into a room where I don't know anyone. And stand in the corner sipping a bad glass of Chardonnay. Please don't ask me to slide my business card out and not so subtly shove it in your face. And ask you to do something for me. Please don't ask me to network. Because I hate networking.
And I used to hate networking (okay, maybe hate is too strong.) I still really dislike the term. "Networking" seemed about getting something from someone. Or someone getting something from you. A favor, a job, a referral. "Networking" seemed very transactional. And someone shoving a business card at you (which happened to me recently at event) only solidified by feelings.
And over the years, I came to really understand that networking wasn't about "the action or process of interacting with others." It was about building authentic connections. It was about meeting people who were different than you. It was about expanding my community. And creating new communities. It was tapping into more and more communities I could belong to.
And as I slowly started to change my view on networking- I mean building authentic connections- I started to realize my communities were more inclusive than I thought. My best friends from middle school. Former bosses. College Alumni I met after we had graduated. Colleagues from past companies. Vendors and agency partners I had once worked with. Colleagues I had once managed. As my family expanded, my husband, my two sister-in laws and my brother in-law. A whole host of fabulous cousin-in-laws. My baby brother as his career skyrocketed. And fellow parents in my kids' school.
I still hate networking. And I love building connections. And helping to build connections and be a bridge for other people.
Now, when I go to a large event, I try to go with a friend. We have a drink at the bar and then part ways to try and make new friends. If we don't authentically connect with other people, and we have made the effort, we always have each other to back to.
Now, I try to meet one new person a week at my company or in my broader community, or reconnect with someone I miss seeing. (This doesn't always have to be in person, can be text, Zoom or Facetime.) And if you can't commit to doing that, that you should seriously relook at your schedule. I thank my former boss for that constant reminder.
Now, I joined Luminary, a women's collaboration hub in NYC, which has been life changing for me. I am also on the advisory board. It's all about women supporting and lifting each other up- to get more money, get that next big promotion, or start their own venture. It's a built-in community of unwavering support.
Now, I am working on expanding my community of moms. Not too long ago, I worked up the nerve to ask a fellow mom in my daughter's class if she wanted to get together. She thought I meant a playdate. I meant drinks. And after one late night out drinking, I have bonded with a whole new set of badass women.
And all of these communities. I am there for my communities. And they are all there for me. Referral for a job at my company. Coaching on how to survive a bad boss. Advice on how to ask for more money. Supporting each other as we care for aging parents. Candid feedback on why they didn't get that promotion. Commiserating over a cocktail on which working parent had the worst week ever.
So please don't ask me to network. Because I hate it. And well actually I don't have a business card to give you. I haven't printed one in four years.