What You Should Do Before Buying A House

The most important things first time homebuyers need to get done before beginning the home buying process

Buying a house might be the biggest purchase you’ll ever make. And that can be a really terrifying idea. What should you do first? The decision to even start looking is often paralyzing, not to mention there’s that fear of the unknown.

It seems like there’s a ton of info out there and it can feel like you’ll never know enough. But home ownership is a worthy goal, fulfilling and rewarding. It takes work like anything, but really pays off in the long run. If you’re ready to get the journey started, here’s everything you should do before buying a house.

As always, remember that this is for informational purposes only. While I am a licensed real estate agent, I cannot provide you with legal advice regarding your individual circumstances. If you have questions regarding your specific situation make sure to check with a local authority in your area or message me directly.

Before Buying A Home, First Talk to a Mortgage Lender

The very first thing you should do, before you even look at houses online, is contact a mortgage lender. It doesn’t have to be anything formal, and most will talk things over with you for free. Just a simple email or phone call to get started.

You absolutely want to do this first because otherwise you’re just setting yourself up for heartbreak if you start looking at beautiful houses on Zillow and fall in love with one that you ultimately can’t afford. Plus, if your credit score is not high enough yet but you’ve been spending hours searching the online listings and begging real estate agents to show you places, you’ll just be wasting everyone’s time – including your own!  

Related Articles for First Time Home Buyers:

• Myths About Real Estate Agents
• How To Buy A House That Will Grow In Equity Quickly
• What to Look For in a Realtor

How to Find a Mortgage Lender Before Buying A House

Where would you start looking for a lender to talk to? Well a quick online search will give you thousands to choose from, ranging from big national banks to small local lenders. And sure, if you are just looking for information you can go with any of them and they can tell you what they offer and what you probably qualify for.

But, without getting too much into the mechanics of how the lending market works, there are two kinds of lenders: those on the primary market and those on the secondary market.

Both can offer mortgage loans to you, but generally the primary market lenders function to originate the loans and then after closing they usually sell them to the big banks on the secondary market. That way they can have the capital back to then originate more loans.

Primary market lenders often have advantages, such as:

• Can offer you lower closing costs – since they don’t have to outsource the underwriting
• Are owned by local banks – so they know the local market and can find you products that may be an advantage in your area
• Specialize in originating – so they can provide you expert service
• Are smaller – which means you get better attention

Using a large national bank does have the advantage of being available 24/7, but many times you won’t work with the same person handling your loan all the way through which opens up the possibility for things to get lost or mistaken.

Being able to talk with the same person who’s in charge of processing your loan the whole time, in a smaller local office can be invaluable during this process. So if there’s any take-away from this, probably the best information I can ever give you, it’s talk to a smaller local primary market lender.

Before You Purchase A Home, Follow the Lender’s Advice

Once you speak with the mortgage lender, you should be able to come away with a plan. Whether that’s paying down some debt so you’ll qualify for more money, setting aside a down payment or funds for the closing costs, raising your credit score, etc.

At the very least you’ll understand the timeline they can work with. If you’re ready, you may choose to go for a pre-approval that will be good for a certain amount of time, which is usually a few months depending on your lender.

Once You Are Pre-Approved

Now it’s time to talk to a real estate agent! Many agents do not work with clients who are not pre-approved, because most sellers will not accept offers without a buyer’s pre-approval letter from their lender. This is how you show you are ready and qualified to buy.

What a Real Estate Agent Can Do for You

Agents that work for buyers are one of life’s little gifts. As I’ve said in a previous post about myths of real estate agents, one of the most common misconceptions I’ve heard is that you have to pay your agent.

I mean, it seems reasonable. They’re driving you around, spending time showing you places, you get access to their professional network, advice, and the MLS. It seems too good to be true that you wouldn’t have to pay them for this service.

But the deal is that they get paid from the seller. The seller agrees when they put their house on the market to pay the agent that brings them the buyer. And so you in turn get all of the help finding the place at no cost to you!

Of course, there are always less common special circumstances where this isn’t the case. You should check beforehand to make sure you won’t have to pay your agent’s commission. For example, properties that are “for sale by owner” haven’t agreed to pay buyer’s agents because they often aren’t listing on the MLS. So ask ahead of time!

Concluding What You Should Do Before Buying Your Home

This is by no means a comprehensive list of what you should do before buying a house. Each state has it’s own way of handling the process of buying a home.

Always check your state’s laws when determining what is best for you. A great agent will be able to guide you through everything you need during the home buying process.

If you need a recommendation for a great agent like this in your area, I have a network of them. Let me know and I’ll see if I have one for you!

Also, Before Buying A House…

You can’t get ready to buy a home if you don’t first have your budget under control. And the best way to start doing that is to begin tracking your spending.

I have a free budget tracker to help you start this journey – it’s one I’ve been using for years! If you’d like a link to this Google spreadsheet enter your email below and I’ll send it to you pronto.

Other Real Estate Related Posts:

• Is It Worth It To Rent Out Your House?
• These Home Renovations Add the Most Value

What You Should Do Before Buying A House