In this episode of the #BossBeat, we’re going to do a little role play exercise. Here’s the setup – you are interested in buying a house two years from now. Being someone who understands the importance of preparation, you decide to get the ball rolling now. After a quick Google search for “World’s Greatest Realtor,” you click on the first link, which just happens to take you to my website.
After taking the time to review your situation together, we decide to create an action plan. Here’s a look at the five most important things to do in preparation for the home buying process.
Get Pre-Approved – First of all, you are not going through this process just to get a pre-approval letter that’s only good for 30 days (even though you will still be issued one). The purpose of getting pre-approved months, or in this case a year plus, before starting to house hunt is to examine your current financial situation, figure out what the ideal situation would be and create a plan to get you there.
Start Saving – One of the best reasons to start getting your ducks in a row sooner than later is the ability to create a more feasible budgeting plan. After identifying financial weak points through the pre-approval process, you have time to save for the downpayment, pay off loans if your credit score needs a boost, or start the schmoozing process early if you’re asking for gift funds from a family member.
Investigate Neighborhoods – Now that you have gone through the pre-approval process and have a better idea of your projected price point, start doing your homework on different neighborhoods. Identify areas that feature houses that appeal to your architectural style, have nearby amenities important to you, and do drive-by’s to help understand which streets are the major thoroughfares.
Create A Reasonable Needs/Wants List – Any good blogger would tell you the headline for this paragraph is too long. Unfortunately for those “good bloggers,” they don’t understand the importance of the word “reasonable.” As you peruse houses on the internet and begin to create a list of needs and wants, understand the ability to afford those items might change from area to area and market to market. While I would never suggest bending on items you deem must have’s, I would be remiss if I didn’t advise being cognizant of the fact that a lot can change in the real estate market over the next two years. Setting reasonable expectations will create a scenario where heartache is a much lower probability in the long run.
Keep Your Head Down – Let’s be honest, there’s a lot that you can change over the next two years – assets, credit score, etc. But there’s also a lot you have zero control over, including home values, inventory, and interest rates. Every market will have its own unique opportunities and difficulties. Rather than hypothesizing on what might be at the time you choose to buy, focus on what you can control. Trust the plan we’ve outlined and when the time comes for the house hunting to begin, we will adapt to that current market and create the best outcome possible.
