Owning a home is a critical component of building wealth and financial security, but it’s a time-consuming process that requires some preparation. If your goal is to close in the New Year, you’ll want to get started.
The first step is to meet with a mortgage planner who can identify the best loan product based on your financial situation and short- and long-term goals, says Realtor Mary Lane Sloan, a partner at The Art of Real Estate in Columbia.
“I can’t show you appropriate homes if I don’t know your budget,” she says. “And the worst thing I can do is show a client a home that is way beyond what they can afford because they will fall in love with it and hate everything else I show them.”
Once you know your budget, meet with an agent to discuss wants and needs as far as space, schools and neighborhoods. It’s wise to use a buyer’s agent because they’re your advisor through the process and your advocate in negotiations. Plus, Sloan says, typically the seller pays the agent’s commission.
Plus, realtors have access to listings both on and off the Multiple Listing Service (MLS) — a database of property listings from regions all over the country — and can access final sale prices for comparable properties in the same area. That way you can rest assured that an offer is realistic enough to be accepted but not so high that you’re paying more than a home is worth.
Home value estimates on websites like Zillow are rarely accurate, Sloan says. “It’s just a formula that doesn’t take into account that maybe this house has granite countertops and this one doesn’t, so you have to take those with a grain of salt,” she says.
Technology is extremely useful in researching neighborhoods and schools and even touring homes, but it can’t replace a live showing, Sloan added. “To get a really good sense and feel for how a house functions and flows, it really is a good idea to physically see it,” she says.
One of the biggest mistakes first time homebuyers make is not coming up with an appropriate timeline for shopping and moving in, Sloan added. Renters should time the closing so that it coincides with the expiration of the lease. Buy too soon and they could end up simultaneously paying rent and a mortgage. Buy too late and they could be homeless in the interim. Similarly, buyers who are upgrading must allow enough time for their current house to sell.
Another big mistake first-time homebuyers make is involving too many people in their decision-making process, Sloan says. “I’m not saying you shouldn’t get input from other people, but when you have too many people weighing in it’s almost like you get flooded with information, and inevitably some opinions are going to conflict with your own desires and the confusion leads to missed opportunities,” she says.
A better course is to wait and only involve one trusted loved one during the due diligence phase on a specific property, Sloan says.
The experts at The Art of Real Estate, Columbia’s premier boutique real estate brokerage, can help aspiring homeowners avoid these and other pitfalls. For help finding your dream home, visit ArtOfRealEstateColumbia.com or call (803) 760-9106.