Step 5: Find the right real estate agent.
Your home search might start with some online window shopping, but it shouldn’t end there. You can do a lot of research on your own, but you’ll need the help of an expert when it comes to finding and securing your perfect home.
A buyer’s agent can help you navigate the home-buying process. In some cases, they can even help you find a great house before it hits the market, giving you a competitive edge. How’s that for being a smart shopper? And when it comes to making an offer, your agent will negotiate on your behalf so you won’t pay a penny more than you have to.
How Much Does a Buyer’s Agent Cost?
A real estate agent will put your best interests first, and they’re a crucial part of your home-buying team. So, how much should you be prepared to pay for an agent?
How does nothing sound?
That’s right! In most cases, the seller pays your real estate agent’s fees, so using a buyer’s agent is usually free to you. Why wouldn’t you want a pro in your corner as you make your biggest investment?
How to Choose the Best Buyer’s Agent
You may know a lot of real estate agents in your area. But keep in mind, not all agents bring the same knowledge and experience to the table. Don’t work with an amateur just because you want to be nice, and don’t give your business to a friend or family member. Ever. A home is the biggest purchase you’ll ever make, and you need a pro on your side.
That means you’ll want to interview a few agents before you hire one. Yep, make them show you why they deserve your business.
When you’re interviewing a real estate agent, don’t settle. A true rock star will have:
- Specific experience helping home buyers like you. What types of home buyers do they normally work with?
- Full-time real estate experience for at least several years. A part-time agent won’t cut it.
- A history of closing 35 homes a year or closing more homes than 90% of agents in your market.
- Great communication skills. Do they answer calls, texts and emails promptly?
- A super-serving attitude that makes you feel like you’re their only client.
- Expertise in your local market. How well do they know the area?
- A detailed plan in place to guide you through the next five steps of the process (which we’re about to go over). Run for the hills if you find someone who’s flying by the seat of their pants.
A professional agent won’t shy away from tough questions—they’ll encourage them. They’ll be a mover and a shaker with your best interests at heart. They’re going to look after you as you’re searching for the right house and negotiating the terms of the contract. As a home buyer, working with a top-notch agent is one of the biggest advantages you can give yourself.
Not sure where to start? We’ve done all the work for you with our RamseyTrusted program. These real estate pros will help you reach your goals and focus on getting you the biggest bang for your buck in the home-buying process.
Find a RamseyTrusted pro in your area today.
Step 6: Go house hunting.
After you’ve been preapproved for a mortgage, you’re ready for the fun part: shopping for your perfect home! (This was my favorite part of the process.) To get started, make a list of must-have home features. When you’re buying a home with your spouse, make separate lists and compare. For example, I valued a bright kitchen with lots of counter space, and my husband wanted a big backyard. A nonnegotiable for both of us was a good school district. Knowing what you and your spouse want will help with the selection process.
Once you have a clear picture of the features you both want, share them with your real estate agent and use them as the foundation of your home search. Your agent will help you set realistic expectations and target your search to areas and homes you can afford.
Think Long Term
You might think you’re shopping for your forever home—but remember to shop with resale value in mind because no one knows what the future will bring. A job opportunity in another state or a growing family could change your idea of a forever home.
Here are some house-hunting tips to help you make a smart investment:
- Don’t compromise on location or layout. These are two things you can’t change about the home you buy. No amount of curb appeal can make up for a truly terrible floor plan. And buying a great house in a not-so-great neighborhood is a bad idea. If you don’t love the location or layout, chances are, buyers years from now won’t either.
- Look past the surface. Don’t let a lime-green bathroom keep you from an otherwise great home. Other buyers may not be able to look past those easy-to-fix details (like décor and paint color), which could score you a deal. That lime-green bathroom could mean more green in your pocket.
- Buy the least expensive home in the best neighborhood you can afford. That gives your home’s value room to grow in the future. Keep in mind, future buyers shopping in an inexpensive neighborhood won’t be looking for an expensive home.
- Pay attention to home values in that area. Are they rising or falling? Are businesses booming or closing? You can tell a lot about home values in a neighborhood by what’s happening in the community.
- Research the school districts. Even if you don’t have kids, school districts can be an important factor when you sell. Homes in neighborhoods near great schools generally sell for more money due to high competition—home-buying parents will move heaven and earth to snag those prime locations!
And one more thing: When you start house hunting, you need to be prepared for it to take a while—it could take months before you find a house that’s right for you and your budget. Now there’s a chance (since you’re so prepared from doing your homework on the front end) that a great agent could find you a house the next day. But you shouldn’t count on that happening. Just make sure you’re ready to go either way.
Hang in there, and don’t compromise on your must-haves.
Step 7: Make an offer on a house.
Once you’ve found the right home, it’s time to get serious. That means submitting your offer and signing a purchase agreement with the sellers.
What’s Included in Your Offer?
Your real estate agent will work with you to submit a solid offer. If you end up in a bidding war with other buyers, keep a cool head and put your best foot forward. Being preapproved with your lender and having a flexible closing date can make your offer stand out.
Your purchase agreement will include other details of the real estate transaction, like:
- Buyer and seller information
- Property address
- Purchase price, lender information and down payment amount
- Earnest money deposit (similar to a security deposit)
- Items to be left with the home (like appliances or furniture)
- Contingencies (more on this later) like the home inspection, appraisal and final mortgage approval
- Closing date
Sometimes agreeing on terms is quick and painless, but it can also be one of the hardest parts of the home-buying process. If your negotiations get intense, remind yourself that both parties want the same thing. The sellers want to sell their house, and you want to buy it!
And remember: Sometimes it pays to compromise on little details if that’ll move the process forward. A good real estate agent will give you advice about when to give in and when to hold firm.
Step 8: Get a home inspection and appraisal.
Once you get to this step, you’ll officially be under contract on your new home. (By the way, under contract means the seller has accepted your offer but nothing is final yet.) That’s something to celebrate. This also means you’re done with the most time-consuming stages of the home-buying process. Cheers to that!
But now that you’re under contract, what should you expect? It normally takes about 30 days to close on a house, so you need to work through the contingencies in the contract.
Contingencies are simply conditions that must be met for the home purchase to take place. They provide a safety net for you to back out of a sale without losing your earnest money if something goes wrong.
Even if you’re in a competitive market, don’t let your emotions lead the charge. You should never skip these contingencies because they offer important protection for your home purchase and your money.
Home Inspection
As a buyer, you have the right to a professional home inspection before you purchase the house, and it would be crazy not to do it. This is one of the most important precautions you can take before purchasing a home because it keeps you from being blindsided by structural issues or expensive repairs. If the inspection reveals major problems with the home, you can ask the seller to fix the problem, reduce the price, or cancel the contract.
You can also consider getting other pros involved so they can run other tests, like a termite inspection or a radon test, depending on your real estate agent’s advice and the age and condition of the home you’re purchasing. Your new home could look perfect from the outside, but you never know what’s going on under the foundation or in the walls.
Appraisal
If you’re getting a home loan, your lender will require an appraisal to assess the value of the property. An appraisal protects you from paying more than the home’s true value. If the appraisal comes in lower than your offer price, your real estate agent can provide the best guidance for what to do next.
