The Home Search Shouldn't Start with a House

Before you start touring homes, build your budget, understand your financing, get pre-approved, and put the right homebuying team in place.

Looking at homes is the fun part.

You can scroll through listings, save your favorites, compare kitchens and backyards, research neighborhoods, and start imagining where the furniture might go.

But finding the house probably shouldn't be the first step in buying one.

Before you seriously begin your home search, there are some important questions to answer:

What monthly housing payment comfortably fits your life?

How much cash should you expect to need?

What financing options may be available?

What are you actually looking for in your next home?

And who will help you navigate the financing, property search, negotiations, and purchase?

Whether you're preparing to buy your first home or you're a current homeowner thinking about moving up to your next home, a little planning before you start shopping can make the entire process easier.

The best home search doesn't begin with a listing. It begins with a plan.

Start With Your Life — Not the Maximum Loan Amount

One of the first questions homebuyers often ask is:

"How much can I qualify for?"

That's an important question, but it shouldn't be the only one.

There's another question that may be even more important:

"What monthly housing expense allows me to own a home and still live the life I want?"

Mortgage qualification is based on guidelines that consider factors such as income, debts, assets and credit. But a loan application doesn't know everything that's important to you.

Maybe you enjoy traveling.

Maybe you're saving aggressively for retirement.

Maybe you have childcare expenses, car payments or other obligations.

Perhaps maintaining an emergency fund is important to you.

Or maybe you're comfortable directing more of your monthly income toward housing because owning a particular type of home is one of your highest priorities.

There isn't one correct answer.

That's why I like to distinguish between what you may qualify to borrow and what you're comfortable spending.

Qualification establishes a ceiling. Your personal budget should help determine your comfort zone.

Don't Just Pick a Purchase Price — Build a Housing Budget

Two homes with the same purchase price don't necessarily have the same monthly cost.

Property taxes can differ.

Homeowners insurance can differ.

One property may have HOA dues while another doesn't.

Mortgage insurance may apply depending on the financing.

Utilities and anticipated maintenance can also vary significantly from one property to another.

That's why simply deciding, "We're going to look at homes up to $500,000," doesn't tell the entire story.

A better approach is to understand the approximate total monthly housing expense you're comfortable with and evaluate individual properties within that framework.

The purchase price tells you what the house costs. It doesn't necessarily tell you what owning the house will cost.

Get Pre-Approved Before You Seriously Start Shopping

Once you've established a comfortable budget, the next step is understanding the financing.

A thorough mortgage pre-approval should help you determine much more than simply the maximum loan amount you may qualify for.

Depending on your situation, the pre-approval process can help identify:

• A potential purchase-price range
• An estimated monthly housing payment
• Approximate down payment and closing costs
• Available financing options
• Possible down payment assistance programs
• Cash or reserve requirements
• Credit or documentation issues that should be addressed before making an offer

And there's something else that's important:

Getting pre-approved doesn't obligate you to buy a home.

Sometimes the answer is:

You're ready.

Other times it may be:

You're close, but let's improve a couple of things first.

Both answers are useful.

Finding out about an issue before you've found a house gives you time to address it. Discovering it after you've fallen in love with a property is a very different experience.

A Pre-Approval Also Helps Your Realtor Help You

There's another reason I believe financing should be addressed early in the process.

It makes your realtor's job easier.

Once you're pre-approved, you can take that information to your realtor, so they understand your approximate price range, financing strategy and what you're comfortable spending.

Instead of trying to reverse-engineer the financing after you've already found a house, your realtor can begin the search with a much clearer picture of what you're trying to accomplish.

And when you find the right property, your realtor and mortgage professional can communicate before the offer is written rather than after it's accepted.

That communication can matter because financing may affect things such as:

• Offer structure
• Seller credits
• Available cash
• Property condition
• Appraisal considerations
• Closing timelines
• Certain loan-program requirements

Buying a home works much better when your realtor and mortgage professional aren't working independently of each other.

They should be working as part of the same team — your team.

Decide What You Need Before Looking at What You Want

Before touring properties, it can also help to make three simple lists:

Must Have

Would Like

Don't Need

Think about bedrooms, bathrooms, commute, schools, yard size, garage, neighborhood, single-story versus two-story, proximity to family, property condition and anything else that matters to your household.

For a first-time buyer, this can help separate what's truly important from what's simply attractive.

For a move-up buyer, the question can be even more useful:

What problem are you trying to solve by moving?

Maybe your family has grown and you need another bedroom.

Perhaps you need a home office.

You may want a larger yard, a shorter commute, a different neighborhood or more room for family.

Maybe you're currently in a condo or smaller home and you're ready for a single-family property.

Knowing why you're moving can make it much easier to recognize the right home when you see it.

Because once you start touring houses, beautiful kitchens and shiny countertops have a remarkable ability to rewrite carefully considered plans. :)

Choose Your Realtor Before You Choose Your House

A Realtor's job isn't simply to unlock doors and show you properties.

A knowledgeable realtor can help you understand neighborhoods, comparable sales, asking prices, property condition and local market activity.

They can help you develop an offer strategy, evaluate potential seller concessions, navigate inspections and contingencies, monitor contractual deadlines and negotiate throughout the transaction.

And sometimes one of the most valuable things a good realtor can tell you is:

"I don't think this is the right house for you."

Experience can certainly be valuable, but don't automatically overlook a recently licensed realtor.

A newer agent working with strong brokerage support, experienced mentorship and the right resources may bring exceptional preparation, energy and time to your home search.

Years in the business can matter, but so do communication, education, resources, support and representation.

What matters most is finding a realtor who understands what you're trying to accomplish and is committed to helping you accomplish it.

Already Have a Realtor? Great. Introduce Us.

If you're already working with a realtor you know and trust, I want to work with them.

Once we've reviewed your financing and established a strategy, I'll be happy to communicate with your realtor so everyone understands the plan before you begin making offers.

If you're just starting the process and don't have a realtor yet, that's okay too.

I can introduce you to real estate professionals who serve your area so you can speak with them, ask questions and decide who may be the right fit for you.

The goal isn't for your mortgage professional and realtor to work separately.

It's for both professionals to understand your plan and work together to help you carry it out.

Now Start Looking at Houses

Finally. :)

By this point, you know much more than simply what price is printed on a pre-approval letter.

You have established:

Your comfortable housing budget.

Your financing strategy.

Your approximate cash requirements.

Your must-haves and priorities.

Your realtor.

Your mortgage professional.

Now the home search becomes much more productive.

Your realtor knows what you're looking for.

You understand the financial side of the purchase.

Your mortgage professional understands the plan.

And when the right property comes along, everyone can communicate before an offer is submitted.

Don't Let the House Rewrite the Plan

Eventually, almost every buyer sees a property that's just a little outside the original plan.

Maybe you intended to spend $475,000.

Then you find the house for $525,000.

Now emotion enters the equation.

That doesn't automatically mean the answer is no.

Maybe the higher price still comfortably fits your budget. Perhaps the financing works differently than expected. Maybe something in your financial situation has changed.

But this is exactly when having a plan — and professionals who understand that plan — becomes valuable.

Someone should be able to ask:

"Remember what you told us was important before we started?"

That isn't about killing the dream.

It's about making sure a major financial decision still supports the reasons you wanted to buy or move in the first place.

Buying Your First Home or Moving Up to Your Next One?

First-time and move-up buyers may face different challenges, but both benefit from planning before shopping.

For a first-time homebuyer, everything may be new: financing, down payments, closing costs, inspections, appraisals, contracts and the purchase process itself.

Education becomes especially important.

For a move-up buyer, there may be another layer of planning. You may have an existing home, available equity, a current mortgage and decisions about when to sell and how to coordinate the purchase of your next property.

The circumstances are different.

The basic strategy isn't:

Understand the finances. Establish the budget. Build the team. Then find the house.

How I Can Help

Education is an important part of what I do, but I also help people put these plans into action.

As a mortgage broker serving California, I work with a network of lenders and loan programs to help first-time and move-up buyers compare financing options and determine which solution may best fit their individual needs.

If you're considering purchasing a home, I'd be happy to review your situation, discuss potential financing options, help establish a comfortable purchase strategy and answer your questions.

Already have a realtor? Great. I'll be happy to work with them.

Don't have a realtor yet? I can introduce you to real estate professionals who serve your area.

There is no obligation to start looking for homes simply because you've had a mortgage conversation.

Sometimes the most valuable thing we can do is determine what needs to happen before you start looking.

Because finding the house may be the most exciting part of buying a home.

It just shouldn't be the first part.

The goal isn't simply to find a home you love. It's to find a home you love that also fits the financial plan and the life you're trying to build.

Rob Clark
Home Loan Consultant
Firestone Financial Group
Cell: 209-227-7745
Email: rbrtclark53@gmail.com
robertclarkloans.com

NMLS #357788
Firestone Financial Group NMLS #301522
CA DRE #01148307
Equal Housing Lender

If you have specific questions or need assistance with your unique goals, don’t hesitate to reach out. The journey to your dream home starts with informed decisions and the right support. Your dedicated mortgage loan officer is here to help you every step of the way, ensuring that you’re prepared to make your dreams a reality.