Here is the next installment in my Beginner Guide to Buying a Home! This step-by-step series will help you gain the knowledge you need to ensure the process is not as scary as you thought nor is it impossible. Every first-time buyer will find this information-packed series easy to follow and understand. Make sure to tune in for the next few weeks!

The house hunting process can be time-consuming, frustrating, and even exhausting at times. I can help you put strategies in place to make sure your home search is efficient and productive. The goal is not to look at as many houses as possible and select one. It is to focus on your wants and needs, eliminate houses that will not work for you whether by location or type of house so that you get to the right home with as little stress as possible.   For example, if you don’t like a certain style home, why even look at them?

Before you even start your home search you need to do some preparation ahead of time.  You need to consider your budget, location requirements, home criteria (number of bedrooms and bathrooms, proximity to public transportation or highways, etc.).

The more carefully you define your wants and needs, the more focused your search, the more fun and less stressful you home search will be.

Best of all, by following these strategies, when you put in an offer, you can do so with the confidence that this home will be right for you.

First, Understand the Process

Before you look at your first home it’s important to learn about the process and understand the steps involved. Meeting with an agent who will explain all the steps in the process is the best way to ensure you are prepared.  Especially if you are a first-time home buyer, you want to take the time to educate yourself about the steps involved rather than rushing out to house hunt before you are ready.

Check out “Finding a Buyer’s agent who is right for you” in this Beginner Guide to Buying a Home series for more details on working with an agent.

Next, Know Your Three “Buckets”

You want to house hunt with a plan and a purpose, and that’s were these three “buckets” come into play – budget, location, and criteria.  Think of three buckets on one side of the scale and your new home on the other.  The three buckets may not all weigh the same but combined they balance out scale with your home.  By finding the correct w

Before you start viewing homes it is very important to understand the specific requirements for your budget, your location, and your homes criteria.  Understand how changing the criteria of one can impact the other two.

Generally, you can get what you want with two of your three buckets but may have to give up something in the third bucket.  It’s important to understand how giving more weight to one bucket impacts the other two.

For example, if your budget is set in stone, and you have a specific location in mind, you might have to consider a smaller home to stay within budget in the location you want. OR if budget and house criteria are more important you may have to consider a different location. Understanding how changes to one bucket impact the others is key to a successful home search.

By looking at budget, location, and criteria in advance you can align your home requirements with your budget and desired location which will lead you to a home that is affordable, in a location that meets your needs, and that satisfies most of your wants.

Let’s do a review of the three buckets:

1. Budget — How Much Can You Really Afford?

One of the first steps before you house hunt is to get pre-approved for a mortgage by a lender. Being “pre-approved” carries more weight with sellers than being “pre-qualified.”

 Remember to let your lender know how much you want to allocate each month for housing (mortgage, taxes, and HOA fees (or mortgage and maintenance if it is a COOP), Know all the numbers, how much is the bank willing to loan you and what that means in monthly payments, plus what you want to spend each month and what that means for home price.

Now you have a budget and a home price (mortgage amount + down payment) you are comfortable with.

You can review this budget process in two previous articles from our series: Do the Math — A Mortgage You Can Afford and Five Steps to Obtaining a Mortgage.

2. Location – What Lifestyle Are You Looking For?

Once you’ve got your budget done, it’s time to move on to location, location, location.

Location will have a huge affect on your lifestyle and day to day life. It will determine your commute to work, your access to stores and restaurants. It’s important to really think about what is important from your commute time to work, proximity to trains and other public transport. Do you want to be able to walk to restaurants and shops or other important activities in your life.

First figure out WHERE you want to live. Which specific neighborhood or town are you targeting? Are you open to looking at similar neighborhoods or towns if they offer the same lifestyle and amenities?

Think about the characteristics of a neighborhood and town and ask yourself why these characteristics are important to you. If these same characteristics could be replicated in another neighborhood or town, would you consider it? Don’t be afraid to consider additional locations. If they meet your needs, they could be a less expensive option if necessary.

Really think about your daily life.  Love walking to work or the train and don’t want that to change?  Then, that becomes a “must” and you may have to adjust your other criteria (size, condition, etc.).  You need to decide if you are willing to buy a smaller, more affordable home to live in a neighborhood you absolutely love near work.

There are certain factors in a location – both desirable and undesirable — that you should consider when you look at a home for yourself and for resale value. Does the neighborhood have good schools? Is the home on a busy corner lot or a busy street?  Is a quiet location important to you?

Also, keep in mind that an up-and-coming neighborhood could be a cost-effective way to your first home if you time it right, but you do need to be careful. Consider a revitalizing neighborhood if your “desirable” neighborhoods are out of your price range. But do the research to ensure it is the right choice for you.

Once you narrow down a location, your budget will determine what type of home you can afford in that particular neighborhood – such as a detached home, townhome or condo unit.

Not happy with the results? Then you will need to adjust your “buckets.” Decide whether it makes sense to change neighborhoods, tweak your budget a bit, or maybe rethink your list of “must haves.”

3. Criteria – What Do You Want and Need in a Home?

When we say criteria, we mean things like how big, how many bedrooms, condition, etc.  Aspects about the home itself you require. It can include both needs and wants.

 When you first met with your agent you should have created a written list of your wants and needs in a home. Now that you are ready to hunt for that house, review your list, consider what you have on it. Now is the time to adjust it if necessary.  Keep these wants and needs in mind as you look at houses. If a garage is a must have or two full bathrooms, or central air then focus your search on homes that have all these features.

Once you start looking, don’t let those items you identified as deal breakers slip from your mind. Make sure the houses you look at have these critical items.

By focusing on your list your search will be much more efficient and less stressful. We may not find the “perfect” home, but we will find the right home when you decide what you need and also what you want.

Remember focus on your needs not your wants.  You need two full bathrooms, but you want a primary bedroom with an ensuite bathroom. You need three bedrooms but would like a fourth bedroom for guests.

Remember that your needs are different than your wants. You need two bathrooms but want a master bath and suite. You need three bedrooms, but a fourth bedroom would be nice for guests. See the difference.

It can be challenging to make those tradeoffs. Is three bedrooms more important than the location. What are you willing to do without?  Is off street parking enough or do you need that garage?   Can you do without a large backyard or an updated, renovated kitchen?  By keeping your list in mind you can stay focused on your must-haves and deal breakers.

Go back and reviewHow Your Needs and Desires Lead to “Home Sweet Hometo get more details.

Then, Put It All Together

Now you understand how the three buckets – budget, location, and criteria – it’s time to put it together. I’ve given you an idea of how you need to adjust each bucket to find the right home, but let’s get a little more detailed.

Taking into account how long you plan to live in the house and your goals for the house, you need to rank the three buckets in order of importance. I know they are all important, but you need to pick your number 1.

Now that you have determined the most important bucket, you can use that specific goal to drive your house hunting efforts. If you get stuck or frustrated, you may need to adjust ONE of those buckets.

For example, if you want to live in a home for 5 years and location is your #1 bucket, you might have to relax your criteria, maybe you need to get a smaller home, or one that needs updating so you stay within your budget.  

In this example we changed the criteria of the home to stay within budget and location.

By using this method of defining your home search and understanding the give and take between these three buckets, your home search will be more methodical and organized. You can easily re-assess and adjust as you go. Don’t be discouraged if you must adjust your criteria, most buyers face these decisions while house hunting

Do You Need to Adjust Type of Home?

As you move forward with your house hunting you may need to adjust your home criteria.  You may have to change the type of home you were thinking of buying, single family detached, townhome, condo.

Once you’ve settled on the location and are focusing on it, you’ll have a better idea of what type of home you can afford in that particular neighborhood. If you have your mind set on a different type of home, then you might have to rethink location (consider one with similar characteristics but with more affordable homes).

There are pros and cons to all types of home, and that is something to discuss with your agent who can help you sort through the details of each.

For example, a condo unit in a building or townhouse community can provide homeownership for less cost since you don’t have a yard. There may be additional amenities available to you such as a pool, gym or even a doorman. Remember to factor in any HOA fees that you are responsible for.

An attatched home (or townhome) will most likely cost more than a condo but it will offer more privacy and potentially a small yard.  As a plus the maintenance costs are usually lower than a detached single-family home of similar size.

A detached, single-family home will give you the most privacy and autonomy but will require more maintenance inside and out.  Are you ready to take on yardwork, and other ongoing maintenance tasks?

If you see yourself living in a home for 5 years but not much more than that, buying a condo or townhome can be a steppingstone to a detached, single-family home. Again, discuss this with your agent and understand the outlook for your local market.

Now You’re Ready — House Hunting Basics

Now that you’ve got your three buckets in place and know how to adjust them, you can actually search for a home with confidence. Best of all when you put in an offer you will be confident that you chose well.

 Here are basic tips for this part of the process:

Stay Organized and Focused Each Time. Keep a record of all your research and handouts on the homes you visit. It’s very important to set up a system that works for you so you can easily refer to homes that day or the next. Maybe fix a feature or give the house a nickname that will easily bring it back to mind.

Jot down quick notes for each one – likes and dislikes, any details that particularly strike you.  Does one house have a strange layout, or are the bedrooms split between two floors (typical for a cape cod). What was your first impression? Is there enough natural lighting, wood floors, rooms sizes etc. 

At the end of the day, rate each house, elminate the ones you would not consider – it’s OK to eliminate all the houses you saw or adjust your criteria maybe you don’t want to see anymore tudor style, or cape cod style homes.  Determine if you want to make an offer on one of them.  Since you are focused on your needs and wants you can make that offer with confidence!

Create a Schedule That Works for You. Discuss your schedule with your agent. Can you only search on weekends? Is there a weeknight or a weekday when you can look at houses. How many houses do you want to look at in a session. I recommend limiting any one appointment to 5 houses – after that it becomes hard to keep everything straight in your mind.

You and your agent can set a day and time for your house search, if there is nothing new that meets your criteria, you can have that time back. Keep in mind that in a market that is moving fast, you may have to bite the bullet and make yourself available, so you don’t miss out on a potential house.

Don’t Forget to Ask for Drive-Bys. If you like driving through neighborhoods and checking them out at different days and times, ask your agent for potential homes for you to drive by so you can leverage that time.

If you see one you like, your agent can schedule a time for you to see it.  

Meanwhile if the exterior of the home or the street (very busy or commercial), or neighborhood is a deal breaker, you have saved yourself some time.

Communicate With Your Agent (and Yourself). Honest communication is essential. Express your likes and dislikes after seeing a home. Tell your agent what you really think, they need to hear it and won’t be offended as it is not their home.

The more forthcoming you are with your agent, the better they will understand you and the home that will suit you best.

Just because house looks great, is move in ready doesn’t mean it is right for you. Don’t feel guilty or pressured. If it is missing one of your “must haves” then it is not right for you.

Maybe you are looking at a home that is a major “fixer upper” or being sold “as is” and the seller is not willing to make repairs.  An honest discussion with your agent and help you understand and determine if you are ready to handle a project of that size.

If you stick to the three-bucket strategy you will find the right home and hopefully have some fun along the way.

Email me for help organizing your three buckets and preparing for your home search.  I would love to speak to you about my approach to buying a home and how you can become a homeowner. Stay tuned for next week’s Make a Winning Offer Without Going Overboard. You’ll get the rundown on figuring out your offer price, your earnest money deposit, and some clever negotiation tactics in this eighth article for my Beginner Guide to Buying a Home series