7 Things House Hunters Should Do Before Even Setting Foot in a Home

Once you decide to buy a home, the first thing you (understandably) want to do is pop into open houses and fantasize about your new life in your new digs.

It is a crucial part of the process. But jumping straight into the deep end could land you in trouble—both financially and emotionally.

1. Get your credit in order

Good credit is essential when buying a home. A poor credit score can lead to a higher interest rate and, by extension, a higher monthly payment. Dings on your credit—e.g., an old debt that’s been turned over to a collection agency, or a high credit card balance—can even prevent you from buying a home.

2. Get pre-approved

Before setting foot in a home, find a reputable lender and get pre-approved. Let us be clear: This is not a simple pre-qualification; a pre-approval uncovers exactly how much house you can afford and is an essential component of a successful offer letter.

Don’t have a lender yet? Don’t worry. Your agent can recommend local lenders, or you can seek out recommendations from other homeowners. Once you’ve settled on a lender you like, have the lender review your finances thoroughly to point out any concerns.

3. Make a list of your must-haves

Finally, the fun part! Now you get to start browsing home listings. Just make sure to take extensive notes of everything you love: Do you want to be in a specific school district? Are you eager for an en suite master bathroom? Is a basement a must-have?

If you have this list prepared and in hand when you visit your first home with your agent, you won’t be prone to making impulsive decisions based on your gut, or getting starry-eyed over gorgeous architectural details that don’t actually meet your needs.

4. Review a residential purchase agreement

It might feel like you’re jumping the gun to think about the contract to buy a home before you even start looking for one. But home buying involves a flurry of paperwork, and you should understand what you’ll sign before you’re under pressure. Review a sample residential purchase agreement with your agent beforehand so you can head into this nerve-wracking process with open eyes.

5. Prepare to be flexible

The home-buying process is filled with highs and lows. You might find a home that fits most of your criteria—but misses the mark in one big way. You might be forced to compromise, or move to an area you didn’t expect.

6. Explore all of your loan options

“Often, first-time home buyers automatically sign up for the 30-year fixed,” Bromberg says. “But often there are alternatives that will work for them, but are not explored.”

If you’re buying a small home or studio, you likely won’t stay for 30 years. Perhaps a shorter mortgage term could be useful. Or, if you have big pockets but can’t quite afford an all-cash offer and find yourself repeatedly losing in bidding wars, Bromberg recommends the delayed financing option, which lets you pay cash upfront for the house—and then get a mortgage for the home after closing.

7. Fill your cash reserves

Don’t just save up for a down payment. Make sure you’ve stuffed your emergency fund, too. In addition to having the down payment in your bank account, Wilder says, you should have an emergency fund that amounts to several months of what the mortgage payments would be.

Having this money before you start the home search will help the loan process—it proves you’re fiscally sound. And, of course, it also buffers against any potential surprises once you get the house, like a brand-new water heater going kaput.

Don’t set foot in a home without preparing yourself emotionally and financially. Laying the proper groundwork guarantees good decisions—and a home you’ll adore.

To view the original article, visit Realtor.com

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