Think you’re ready to buy a house?  Answer these questions first!

If you think you’re ready to buy, you’ll be able to answer these questions with confidence. These questions can be broken down into three categories:  Finance, Fit, and Location. 

Finance -The first set of questions are based on your financial readiness and are, perhaps, the most important questions.

How much do you have set aside for a down payment?

Maybe you’ve saved for your down payment, or inherited a chunk of change. It’s important to make sure you have the down payment ready and accessible, rather than getting a down payment loan. Also some agents and sellers will require an approval letter prior to showing a home. 

How much can you afford per month?

Make sure you analyze those financials  to get an accurate estimate of what you can afford. This will prevent you from wasting time on unaffordable homes. Click here to find a home affordability calculator.

Have you been pre-approved?

Best to get your pre-approval before you start the process. That way you’ll have no doubts about which homes you are qualified for.

How much how much house can you actually buy?

Now that you have that pre-approval, you can go online to check some listings. While you might be tempted to  stretch the budget, make sure to take your down payment and other factors (PMI, HOA fees, etc.) into account. Don’t blindly trust the payment indicator on the listing site. Those are usually configured with a 20% down payment (more on that later!).  Make sure your pre-approval matches the type of home you are seeking. 

Are you comfortable with that payment on a monthly basis?

It’s 30 years of payments. Make sure you take future life events in account.

Fit - The next set of questions concern the fit of the house itself. Keep in mind, you're living here every day for the foreseeable future. You’ll want to make sure your new home and neighborhood location are suitable for your life and lifestyle. 

What's important to you in that house?

Storage space? Work-from-home accommodations? A kitchen Island? A kid-friendly backyard? Make a list of must-haves and nice-to-haves for your new home. As a rule of thumb, make sure your new home has 80% of your must-haves and at least a few nice-to-haves   

Identify the pain points you need to address.

After all, you’re moving for a reason. Does this home fit your future needs? If you need a work-from-home space to match your out-of-office lifestyle, you’ll need to ensure your new home can accommodate.

Location - Finally, take the following location concerns into account:

Where do you want to live?

Close to downtown? In the country? Or perhaps a suburban location with access to local parks and green spaces. Most listing sites share that info on the listing level, or the town or zip code level. You can also leverage Google maps for this data.

How long do you want to live there?

Take a look at the next ten years. Any life changes coming up? Perhaps a new addition to the family, or for buyers on the other end, the prospect of an empty nest.  Your location needs can change during your ownership of the home. 

Is this a starter home? Or is it your forever home?

I’m sure plenty have moved into home thinking it is a forever home, yet circumstances have forced a change. For example, if you are a few years away from retirement, is this location going to fit your needs once you decide to downsize?

Purchasing a home is a big step. Considering these questions will help you decide if you are ready to find a qualified real estate agent to take the next steps. 

Disclaimer: Hi ! I'm Ed! I am NOT a licensed real estate salesperson or broker. I am however currently studying to become a real estate agent, and hope to have my California real estate license by summer of 2023. All advice and information given on this blog is sourced from publicly available websites and common knowledge. Please reach out to a licensed real estate agent if you are interested in buying of selling a home!