The real estate experts at Starved Rock Realty have some tips to help you find the right home at a price you can afford.
Determine Budget/Get Pre-Approved
The very first thing you should do - even before you start looking at homes - is figuring out how much home you can afford. An online calculator can help determine your monthly mortgage payment based on home price, down payment, interest rate, and loan term. But, there are other costs besides the mortgage payment that needs to be factored into your budget. These costs include property taxes, homeowner’s insurance, home maintenance and repairs, and homeowner’ association fees (if applicable).
Once you’ve used a mortgage calculator to estimate your monthly payment, make sure you have a preapproval letter from your lender and not a prequalification letter.
- A prequalification letter is when your lender states you are prequalified for up to a specific loan amount.. This is only a rough estimate based on your credit score and annual income.
- A preapproval letter for your lender is the actual mortgage amount you qualify for. This amount is based on official documents including your credit report, bank statements, and W-2s. Thus, it carries more weight than a prequalification letter.
Often, real estate agents will wait until you get a preapproval letter before working with you. Sellers will also take you more seriously once you have a preapproval in hand.
Must-Haves vs. Nice-to-Haves
Everyone has an idea of what their dream home looks like, but chances are, your perfect home isn’t going to magically drop in your lap. Before shopping for your home, create a list of qualities you want in your new home and order them by importance. For example, a kitchen island may be more important than a walk-in closet in your bedroom. You could also sort these qualities into categories (i.e. must-haves, nice-to-haves, deal-breakers).
- A must-have is a feature you simply can’t live without - such as a bedroom for each child or a first floor home office. Once you’ve created your list of must-haves, it will be easier to sort through real estate listings. However, if the home has unfinished space with the potential to add a desired feature, you may want to keep it on your home search list.
- A nine-to-have is a want, but not an essential feature. Maybe it’s a feature you’d like to add in the future, such as a backyard deck or updating to stainless steel appliances. While these may be on your wish list, they aren’t a necessary need for your new home.
- A deal-breaker is just that. Let’s say you have visions of a backyard vegetable garden but the home has a small yard. Or the home is out of your desired school district, the home would come off your list.
Search Housing Websites
To get a feel of the housing market in your desired location, start browsing available listings online. Doing online research provides you an estimate of what an average home sells for in the area. It also gives you the opportunity to check out potential neighborhoods for parks, schools, crime rates, and other factors you want to consider during your home search.
Once you’ve compared prices and features of homes that meet your must-haves and budget, save the addresses so you can explore the home and the neighborhood. Drive-by the properties, explore the neighborhood and compare local amenities to your list and your budget.
Work With a Real Estate Agent
Connecting with a local real estate agent can make your home search less stressful and more efficient. Our experienced realtors can help you narrow your home search, arrange private showings of homes you might have missed, and help you get the most out of your budget. We can also provide insight into the best neighborhoods and properties to meet your home buying needs.
View Homes In Person
Virtual open houses are great to get a general overview of the property, but the best way to get a feel of the home is to see it in person. You can arrange a personal showing with your real estate agent, or tour the property during an open house. When viewing a home, test the toilets, faucets, outlets, and appliances to see if they’re working properly. Make a list of needed repairs you would want the seller to fix should you decide to buy the house. As you view more homes, you’ll get a better idea of the right home and neighborhood for you. (Some viewings may require mask/gloves, so having some handy in the car will be helpful.)
With 20 years of experience, Starved Rock Realty has the knowledge and experience you’re looking for when you’re buying or selling a home. Don’t just change your address - change your lifestyle! To learn more about how Starved Rock Realty can help with your real estate needs, visit our website or call us at 815-667-9990!
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