House Hunting Part 2 – The Gathering
You have your pre-qualification letter; better yet, you went ahead and applied for a pre-approval letter. You know the limitations the lender has placed on you concerning how much you can spend on a home. So, what is the next step? The lender has shown you how much of a loan you can qualify for; however that may not be how much you really want to spend. The next step is to budget. Collect monthly bills from the last six months. Compare your monthly expenses with your monthly income. Include estimated grocery, gas, eating out and any other type of expense. Determine how much of a monthly payment you can afford. There are several good, free mortgage calculators on the internet, better yet contact your lender and he or she will give you a monthly payment estimate you can work backwards from there to determine how much you can spend. Include the down payment in your calculations. This step will save you from wasting time looking at houses you cannot afford plus save you from any heartbreak if you fall in love with a an abode that is financially out of reach.
Now the fun begins. This next step will focus you for the hunt. As any good hunter, you must determine your prey, study its characteristics, and recognize the beast so when the right one comes along you can pull the trigger. To hone in on the target, I suggest making a list. Get a blank piece of paper, notebook paper is fine. On the top, write the maximum price you can afford to spend on your new castle. Leave the first three lines blank and draw a line down the center of the paper to create two columns. On the lines above list the areas you would like to live, perhaps the location of work, good schools, affordable neighborhoods, or just preferences. Include different counties, towns, or subdivisions. These two lines will focus on your hunting territory. Over one column place the title “Needs” and over the second column use the title “Wants.” Under the “Needs” heading, list everything you need in a home. Some examples could include acreage, how many bedrooms, the number of baths, square feet, swimming pool or no swimming pool, age of house, trees on the lot. The “Needs” list are items you cannot live without. When you are searching for a home on the internet or doing a walk through you have a basis to eliminate the listing. If the abode has all of your “Needs,” you may consider jumping on it and making an offer. The “Wants” column is for niceties. Things you do not need but if the listing has it all the better. You would not necessarily eliminate the house however; you may keep an eye out for something better, and if the something better is nowhere to be found, possibly this one is for you. These items might include trees, pools, spas, privacy fence, dedicated library etc. When searching for a used home there is some give and take. If you cannot distinguish your “Needs” from your “Wants,” an existing abode may not be what you are looking for and maybe time to consider new construction.
Even though you have everything written down, the list is not in concrete. As you search, your tastes might change. You may list a basement as a “Need” you would soon discover basements are not common in North Texas due to the clay soils. You may find a couple but not many and you may want to adjust your “Needs.” Sometimes you may see a “Want” in a particular house and decide that is not for you, and that is okay, remove the item from the list. Maybe you want to expand your search area or situations have changed so you can increase/decrease your maximum price. The list will simplify things and make it easier to make a logical choice on your new abode and help you pare down the choices. The next Blog will focus on how to hunt…See ya down the road. http://www.djlyons-realtor.com