Buying a Home - the Home search
Most people begin their home search by beginning to attend Open Houses. This is a great way to begin. It helps you begin to work out what are needs, wants, and 'have to haves' - not only do you begin to get a feel for the type of home you want, and can afford, but you get an idea of the different neighborhoods that exist, and the towns that end up being options for you. Once you have a firmer idea of where you want to live, and the type of home you want, you can begin to get a bit more serious. Once you find the right home know that a 'normal' closing is 6-8 weeks, so if you have a definite timeframe for which you need to be in your new home, factor this into your plans as well. Its not just finding the right home, you need to consider the whole process that occurs after you find the right home as well.
Find a buyers agent
When you begin to get serious about finding a home, the first step is to find a buyers agent to help you. Ask your colleagues at work, at school, people who you respect their opinion, to ask if they know of a good real estate agent. Along with every profession, there are good agents and poor agents. Find a good agent. Even if you know a good agent but they don't work in the same area that you want to buy, often they can assist in finding you a good agent in the area that you do want to buy in. You may also have struck up a conversation with an agent who was hosting an Open House that you went to, and you like the way you communicated - more often than not, that agent would be more than happy to assist you in your home search. Once you believe you have narrowed down on an agent to use check out their online reviews - see what others are saying about their experiences with that agent. To check out what our clients have been saying about us, go to Our Success Stories
Once you have an agent to work with, the next step is to obtain a preapproval. The term 'prequalification' is used interchangeably with a preapproval within real estate although the banks consider them a different component. A preapproval can be obtained from any mortgage broker or bank loan officer - you do not need to shop around for a mortgage prior to getting a preapproval - a preapproval is simply where the mortgage broker has run your credit, asked you about your liabilities and income in order to determine a mortgage amount you will qualify for, and thus, the purchase price of a home. It's important to remember that you do NOT need to spend this amount - this is just the amount that you will qualify for but you do not need to buy for this amount, you can buy for less. Its important to do your homework first with regard to the preapproval. There is nothing worse than hunting for your perfect home, finding it, and then going to the bank and finding out that you cannot afford it. Know your limits before you start.
Set up an MLS Search
Your agent will set you up with a daily email alert from within MLS (Multiple Listing Service) so that you know when something comes on the market. If you have a fairly defined search area and criteria, your agent will also keep an eye out for a home in those towns for you - if you are looking in more than 3 towns then it becomes a little harder for your agent to keep an eye on potentials for you because of how frequently homes come on and off the market, and if you haven't begun to focus on a specific area, its almost impossible to keep track of what comes on and off specifically for you.
Seeing houses with your agent
Your agent should suggest taking you out on a tour. Its valuable to spend time in the car with your agent - your agents goal should be to help you learn about the area, learn about the real estate market in general, learn about the process of buying and just generally answering any of your questions. When you are in a house, your agent should point out various things of note to you. If a house has any features which may impact resale in the future, your agent should be pointing these out to you so that you take them into consideration.
Which town is right for you?
A lot of folks struggle to decide where they should buy. I often chat about the fact that deciding where to buy generally depends on 3 criteria; 1) Commute distance to Boston, 2) School system, 3) How much house you can buy for the money. Most buyers often need to compromise on one of these criteria. For example if you want a good school system, and be close to Boston, then you may have to compromise on how much house you can buy for your money. Or, if you want a good school system and as much house as you can buy for the money, you may have to buy in an area where the commute is not great. Another alternative is that if you want to buy a good amount of house for the money, you want a good commute, then you may be looking at a school system that is not considered to be a good school system.
I always quote to folks that you should buy the most you can afford, in the best town you can afford. From a resale perspective, buying in the best town you can afford is like buying blue-chip stocks - it is less riskier when you buy in a town that has an established, good reputation, and that any improvements you make to the home will not be overcapitalizing on what the area can support. There are various fundamentals that I recommend considering when you buy. You should always buy something that 80% of the buyers, after you, will also want to buy. You should buy a house that is commonly seen in the neighborhood - for instance, don't buy a contemporary style home in an area of traditional homes. If you want a contemporary home then buy one in an area with a lot of contemporary homes. Other considerations are that you should never buy the best house in the street - all of the lesser priced homes around you will have a downward pressure on the price of your home. A home on a busy street will always be harder to sell than a home in a neighborhood and on a quiet side street. Even if you do buy a home on a busy street, so long as you are not paying the same price as what that home would sell for on a side street, you are not as bad off as if you are if you are paying the same price. A busy street location should come with a significant discount for the same house in a side street location. If you buy a home with a significant negative, for instance, on a busy road, backing onto a major highway, next door to a cemetery, no backyard, poor school system town, high crime area as examples, know that your home will still sell, it will just take a lot longer to sell than a home without the associated 'negative'.
Homework is important
Doing your homework is important. Your agent should be able to guide you as to how quickly homes are selling in your town, inventory levels and absorption data, and the average days on the market homes are staying on the market. It's important to assess the home that you are planning on buying to understand how long the home has been on the market, whether its had any price reductions in that time, or been under agreement at any point during its time on the market. Your agent should have all of this information for you, and should also provide information on comparable homes that have sold in the area recently.
If you have seen all of the homes on the market currently in the town and price range of your preference, then you and your agent will watch the market on a daily basis for new houses entering the market.
When a new home comes on the market that has potential, all of the serious buyers will get in to see the home within a week or two of it being on the market. So, if a home has been on the market for 3 weeks or more, we can generally say that the market is telling us that the home is overpriced. If a home is priced well, it will attract an offer within the first 3 weeks of being on the market at this price. This is because there are many buyers who have seen everything on the market while searching for a home, and when something new comes on that is priced well, then there are many buyers 'ready to go' to buy it.
For a statistical analysis about the real estate market in a town you are interested in we have several publications you may be interested in. Here is an example of a market review booklet we produced for the Lexington market.
If you have any questions about any of this then please don't hesitate to reach out to one of us. We would be more than happy to help.