Buyer's Guide

1. CHECK YOUR OWN CREDIT

If you’re like most Americans, you’ll need a mortgage loan in order to purchase a house. The amount of money that a lender is willing to loan you will depend on several factors, including:

- Your current income

- The amount of down payment that you’re bringing to the table

- Your credit

You might or might not have a lot of influence over your current income, and you might or might not have wiggle room to save up for a down payment, but one thing that you can almost always work on is your credit. Get copies of your credit report to ensure that everything on it is accurate; fix any errors, and consider talking to a credit expert who can tell you which payments to prioritize and how to improve your score.

2. RESEARCH SALES PRICE IN YOUR AREA

While you’re considering exactly what kind of home you want yet (and we’ll get to that), you’ll also want to think about how much that home might cost. This would be a good time to talk to an expert, like a real estate agent, about the sales prices in the area.

An agent can show you current active listings and is also a good resource to tap when you have other financial questions about homeowners’ insurance or other costs of homeownership, like common maintenance costs in the area.

3. NAIL DOWN THE DOWN PAYMENT

While you’re considering exactly what kind of home you want yet (and we’ll get to that), you’ll also want to think about how much that home might cost. This would be a good time to talk to an expert, like a real estate agent, about the sales prices in the area.

An agent can show you current active listings and is also a good resource to tap when you have other financial questions about homeowners’ insurance or other costs of homeownership, like common maintenance costs in the area.

4. CONSIDER ALL THE COSTS

There’s more than PMI to think about when it comes to a mortgage loan - you will also be paying:

- Property taxes

- Homeowners’ insurance premiums on the house

- Flood insurance, and often supplementary earthquake policies are worth considering (depending on the location)

You will likely need to pay closing costs, and you probably have furniture and items to move, so you’ll have to cover those expenses. And then there’s the wear and tear on the home and the cost to repair it, and the costs of utilities from month to month; a good local real estate agent can help you figure out what to expect.

5. GET TO KNOW YOUR DEALBREAKERS

Almost as important as knowing what you want in a home is knowing what you definitely don’t want. But don’t confuse a “dislike” with a true and genuine dealbreaker - a feature of the home that you can’t realistically fix.

If you haven’t tapped into the expertise of a real estate agent yet, now would be the time. An agent can help you understand what’s fixable and what’s not in the house you’re just not sure is a good fit.

6. SEARCH ACCORDINGLY

One tool that real estate agents have that the general public doesn’t is access to the local multiple listing service (MLS), where homes are actually listed for sale. Once you understand your must-haves and your dealbreakers, your agent can set up a personalized alert anytime a home that meets your exact criteria is listed on the market.

7. THINK COMPETITIVE BUT REASONABLE

You probably want to avoid a bidding war, so you’ll want to make an offer that the seller will consider competitive. At the same time, you don’t want to pay more when the seller would accept less; an experienced real estate agent can help you navigate the field of exactly what to pay and come up with an amount that’s a good deal for you and priced high enough to capture the seller’s attention.

Don’t forget that there are other concessions you can make to sweeten the deal beyond sales price - like giving the seller control over the closing timeline or offering to split the price of any necessary repairs discovered in the inspection. Your agent can walk you through popular options here, too.