9 Effective Steps to Buying a Home

June is National Home Ownership Month.  One of the happiest times in my life was when I became a homeowner.  I feel a great sense of accomplishment and have been blessed to remain in my home despite the economic woes of the country and many other homeowners. 

The best time to buy a home is during with fall and winter season when demand is low.  However, many Americans purchase homes during June, the start of the summer season.  Owning a home is one of the best ways to generate wealth.  However, owning a home requires financial discipline and sacrifice.  Create a budget or spending plan to help manage your finances to make sure you can stay in your home for as long as you like and to help reduce the chances of filing for bankruptcy or foreclosure. 

Your monthly mortgage payment should be no more than 32-38% of your total monthly income.  This will ensure that you have extra cash to pay for unexpected expenses and will reduce the chances of using a credit card and going into debt. The advantages of owning a home are:  it increases your credit score, proves that you are a responsible spender, provides stability, provides a tax write-off, increases your financial worth, and provides you with an asset that will appreciate over time.

Renting should be a short-term option not a long-term solution.  Although becoming a homeowner may not be an option for everyone, owning something of value should.  You can:  become an entrepreneur, invest in a profitable business or purchase investment property.

Before you buy a home you need to prepare for the home buying process.  Estimate your monthly mortgage payment. Subtract the difference of the estimated monthly mortgage payment and your current rent (if you pay rent).  Start reducing your spending at least 3 months prior to looking for a home and use the money to save towards downpayment and closing costs and to save the difference between your current payment and your estimated mortgage payment.   Here are 8 tips to help you buy a home:

1.      Fix any errors on your credit and pay down debt

2.      Find a real estate agent

3.      Get pre-qualified

4.      Find the best loan

5.      Use home buying programs

6.      Find a home  and make an offer

7.      Get a home inspection, home energy audit, lead and radon tests

8.      Shop for homeowners insurance

9.      Prepare for settlement and closing and confirm in writing all dates, dollar amounts and what is needed from you

Guest Post - Take the worry about buying a home!

A knowledgeable REALTOR® can help take some of the stress out of the home buying process.  Now let’s see what you can do to take some pressure off of yourself.

Say that you and your significant other have spent several evenings looking at homes over the last several months, or you allocate Sundays to view Open Houses.  One of two things will likely happen and they both will cause you some anxious moments: 1.)  You looked at twenty homes and didn’t find exactly what you were looking for; or 2.) You found the ideal home only to find out that someone has already put a contract on it.  In markets where there is very little inventory and lots of buyers, the speed in which you have to make an offer can be nerve racking.

Purchasing a home is perhaps the most important financial decision you will ever make, let’s face it, it's the largest part of that quality of life that you envision for your family.  If you are experiencing anxiety, it might help if you pinpoint where this uneasiness comes from.

What determines our comfort in any given situation; is our perception that we have things under control.  There are so many moving parts in the home buying process, that it would be impossible to control every outcome; trying to do so would only lead to more stress.  When anxiety sneaks in, try and take a step back and refocus on the 'big picture'.  You already know why you're buying a home!  Psychologist Sue Murrin urges homebuyers to adjust how they think about the process in order to combat stress.  According to Murrin, "we have to tackle our own thoughts as much as taking action on any aspect of the buying/ selling stages.” (article: House Buying Stressful or Fun by Sue Murrin)

Before you identify a home that will be right for you, it is important to try and understand whether you are stressed by the process, or about internal feelings that are within your control.  You can take away some of the stress by addressing some of the unknowns.  Money ― Are you worried about spending too much to maintain a healthy budget?  If so, talk to your agent about showing you homes that may be a little less expensive.  Career ― Is your employment situation likely to change?  If so, deciding to wait until you are sure that your job is stable or salary remains constant, may be a viable option.  Market ― Do you fear that the price of the home may go down in value?  Home prices do fluctuate that we know, but one thing you can do to mitigate this is to make sure you take pride in the appearance of your home, and think of it as an investment for the long-term.

Make sure you’ve done your homework, and once the hard part of searching and buying a house is over, you can now finally enjoy a lifetime of making it yours.

Jason Wrenn

Long and Foster

202.247.7513

Jason.Wrenn@LongandFoster.com