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6 Things You Must Know Before You Buy a House

In April 2022, the median single family home price in San Diego County hit $1,000,000. This was an astonishing climb of nearly 20 percent from the previous year. If you needed any confirmation, the real estate market isn't just hot — it's on fire.

Maybe it dawned on you while you were visiting a real estate site. Or perhaps it hit you around the time that you decided to join the market. But either way, your home search keeps running into the same issue:

You have no idea how to buy a home.

At this point, you're beyond needing a home buying guide. You want a home buying checklist.

Want to learn more about buying a home? Keep reading to see six of our best home buying tips. 

1. Find an Amazing Real Estate Agent

Imagine you're in a treasure-hunting competition. You have no map, no GPS, and no working cellphone service. All things being equal, you'd want to have a trustworthy guide in that situation, right?

The home buying process can be extremely difficult to navigate if you're not used to it. You have to book walkthroughs, attend open houses, negotiate with sellers, and close. 

While all of this might sound confusing to you, buying and selling houses is literally another day in the office for your agent. The right real estate professional will be able to tell you about the neighborhood, inform you of the process, and help you make offers. In a market that's often known for moving quickly, the assistance of an experienced real estate agent can be invaluable.

2. Search at the Low End of Your Price Range

When it comes to purchasing a house, most "How to Choose a Home to Buy" articles will tell you to consider your price range. However, a lot of buyers don't know that the costs of homeownership extend beyond the mortgage.

These "hidden" homeownership costs can include:

  • Property taxes
  • Maintenance costs
  • Closing fees
  • Utility rates
  • Emergency repairs

On that list, property taxes alone can quickly take a house from "affordable" to "stretching my monthly budget". 

Most people aren't going to shop for mansions on a thousandaire budget. But there's a gray area where a house might look affordable while actually being more expensive than it appears. To avoid buying more house than you can comfortably afford, you may want to begin your search at the lower end of your price range.

3. Get a Mortgage Pre-Approval

In November 2021, houses sat on the market for an average of 22 days. The previous time to close? 49 days.

For sellers, this is excellent news. They can put their property up for sale and expect to get multiple offers and their money in less than a month. But if you're a buyer, this means that you will need to dot your i's and cross your t's. 

Here's why:

Imagine you've found the house of your dreams. It has a spacious backyard, an excellent location, and an extra bathroom to boot. So naturally, you decide to make an offer.

However, when you submit your mortgage application at the bank, you're informed that it'll take a few days for your approval to go through. Will you still be able to buy the house?

You don't know. 

Mortgage pre-approvals are the bank saying, "We've assessed your finances and we're prepared to lend you this amount.". And when the market is competitive, on-the-spot offers can make a difference.

This is might sound like How to Buy a Home 101, but it's only because the advice is true.  A mortgage pre-approval can do a lot to make the home buying process smoother.

4. Check Your Credit Score

For many individuals, strong credit scores are like the gold medal of personal finance. This isn't considered sound advice for no reason. 

Why? Because good credit can get your mortgage approved at a lower interest rate. 

According to Business Insider, people with credit scores between 620 and 639 have an average mortgage interest rate of 6.366 percent. Meanwhile, those in the 760-to-850 credit score bracket pay an average of 4.777 percent on their mortgages.

That two percent might not seem like a lot of money. But over the course of a 20 or 30-year mortgage, that's thousands of dollars spent on interest payments rather than principal.

Before you even start going through the formal step of buying a house, you'll want to spend some time improving your credit score. Pay down your outstanding debts, get caught up on credit card payments, and do your best to avoid making any major purchases on credit. These steps could save you a ton of money.

5. Future-Proofing Matters

Let's say that you're a young professional who wants to be in the heart of town. When you're single and fresh out of college, maybe the sirens at night and the bustling happy hour are a small price to pay for an upper-level penthouse.

Five or ten years later, you might have a dog, a partner, and a couple of kids. Suddenly the cozy two-bedroom condo that seemed spacious for a single person just doesn't have enough space. And now you have to move.

Nobody can predict the future. But as a general rule of thumb, you don't want to choose a home that suits your needs right now — you should be looking for a house that can accommodate your preferred lifestyle in the future. 

6. Don't Forget About the Neighborhood

A lot of the advice out there on how to buy a home will focus a lot on the property itself.

Watch out for DIY upgrades. Think twice if it requires extensive repairs.

Even though these tips might be useful, it's still important to consider the long-term value of the property. And in many cases, the surrounding neighborhood can have a profound effect on the resale value of the house.

Are there new stores being built and high-quality schools nearby? Do you see more residential homes going up in your area? These clues can help you get a quick sense of the neighborhood's long-term potential.

Get the House of Your Dreams With This Home Buying Checklist

No matter which way you slice it, a home purchase is a major personal milestone. But in order to land the house you've always wanted, it's a good idea to revisit your home buying techniques.

We've just given you a short home buying checklist. With this information in tow, homeownership isn't just a remote possibility - it's inevitable.

Are you looking to buy a home soon? We're here to help! Contact us to discuss your home search today. 

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