Don’t Let Your Home Search Leave You Lost in the Forest
Buying a home in the internet "Should" be easier than ever. Instead of driving from one open house to the next, you can leisurely look at homes while having your morning coffee.
With so many websites offering access to listings, it’s easy to get confused. You find a home that looks perfect while standing in line at the Post Office. You get back home and can’t remember which website it was on. You don’t see the same house anywhere.
A few days later you find one that looks perfect at an incredible price. You call the “featured” agent next to the listing. That agent has never heard of the house. They’re nice enough to look the address up in the MLS. It isn’t currently listed for sale. The agent checks the history and learns it sold as a short sale three years ago.
No wonder it was such a great price.
You start to feel your dream home is as elusive or non-existent as Bigfoot. Looking for Bigfoot could be a fun adventure if you have time and energy to waste. If you need to buy your home now, you may want to take a different approach to your home search.
These steps will help you stop chasing the "Bigfoot of Homes" and find the home that's "just right".
Establish Your Budget
One of the biggest time drains is looking for a home if you can’t get a mortgage. Today’s lending rules are tighter. Lenders need more documentation than they did a few years ago. Trying to buy a home only to find out that you can’t get a mortgage can be frustrating and embarrassing.
Start by finding a good Mortgage Broker. Ask them to give you a Pre-Approval letter. The Full Pre-Approval will require that they run your credit scores. They’ll need pay stubs, W2s, etc., to document your income. Expect to provide bank statements to verify funds for the down payment. This will take at least a few days, maybe longer if they run into questions.
You can fill out a questionaire online and get a “Pre-Qualification” in minutes. A pre-qualification letter isn’t worth more than the paper it’s printed on. It’s based on your answers to questions. But the answers haven’t been verified. The Pre-Approval means the lender has verified your answers and they meet underwriting guidelines. You will need that pre-approval when you find the home you want to buy. Most sellers won’t consider an offer that only has a pre-qualification.
Once you have the Pre-Approval letter, you will know how much home you can afford to buy. You’ll need to add homeowner's insurance, property taxes and HOA fees to the payment. Are you comfortable with that amount? Decide how much you are comfortable spending each month and how much house that buys you.
Searching for Homes in the Wrong Places?
This is where it’s easy to start “looking for big foot”. There are so many websites that allow you to search homes for sale. How do you know which ones are accurate? For starters, look for a local Real Estate website. The big National websites cover every area of the Country. Local websites focus on your local market. Their information is more likely to be up to date and accurate.
This is especially true when looking at Zillow. Zillow’s been criticized for the inaccuracy of their home value "guestimates" for years. More recently they’ve been criticized about the listings they do or don’t display. Many MLS Boards are now denying Zillow access to their listings. Depending on the MLS in your area, Zillow may or may not have access to your local listings.
Zillow makes money by selling advertising. The more listings they display, the longer they can keep viewers on the site. It isn’t surprising that Zillow continues to show homes that aren’t for sale. What do they care as long as it keeps you looking at homes and clicking on the ads for agents and lenders?
When searching for homes, scroll past the big National sites. Take a look at the sites that belong to local Real Estate agents and Brokerages. Try their home search. Is it easy to use? Does it allow you to save your own search and your favorites? How does the site work on your phone? Finding a site that’s allows you to save your favorites wherever you are is the best. Save the favorite you found while driving around to show the family when you get home. No need to troll through dozens of sites trying to find it again.
What Kind of Home Does My Budget Buy?
If you’ve been pre-approved for a $250,000 mortgage, you need to look at homes in that price range. Would you go test drive the new Mercedes if you can only afford a Buick? Window shopping higher priced homes is great for decorating ideas once you’ve found a home. While searching, it’s best to stay focused on finding the treasure. Sticking to the homes in your budget will avoid the temptation to go over-budget and end up house poor.
Start by picking out your favorite neighborhoods. I suggest picking the areas within 20-30 minutes of your job. That may not be possible in cities like L.A. or San Francisco, but it is in Las Vegas. Now go to the website(s) you’ve found that are easy to search. If you’re approved for $250K, search for $200-$250K.
Search for homes in your favorite neighborhoods that are close to your work, family, etc. Don’t add a lot of criteria in at first. You want to just get an idea of what sort of home is currently available in your price range. Are the homes you see similar to the size and style you want? If there are only a few matches expand the search to the nearby neighborhoods. Expand the search radius until you begin to get a feel for what your money will buy.
When you see lots of options, you’ll need to narrow them down. Start by asking whether you need a home that you can move into right away. If the answer is yes, you will need to forget short sales that can take months to close.
What about the age of the home? If you want to spend less on home repairs, replacing appliances, etc., look at newer homes. Limit the search to homes built in 2010 or later.
This is usually the point where buyers may need to make compromises. You’ve decided how much you can afford to spend and that you want a newer home. What other options can you get in your dream home? Pool homes are popular in our climate so we add that into the search. There were 111 options in the Las Vegas MLS before we added the private pool. Adding that requirement brought ZERO results. Looking for a pool home that’s built in 2010 or later for less than $250K is like looking for Bigfoot.
Possible compromise? There are 32 homes meeting your price and age criteria in subdivisions with community pools. Having a private pool is fun but a community pool doesn’t need maintenance. If you must have your own private pool look at older homes. There are 25 pool homes that were built between 2000 and 2010. Still not a huge selection but feasible.
Keep Your Options Open
No one wants to spend day after day looking at homes that disappoint. At the same time, you don’t want to miss a great home just because you didn’t go see it. The quality of listing photos has improved. We still see some homes without photos. Or the photos are so dark you can’t tell what it’s like. Take a look at the map view. Is the location good? Does the MLS info mention other features on your list? Sometimes the listings without photos are worth a drive by. If the house looks better in person than in the photos, schedule an appointment to see the inside.
You may have to compromise on the type of floors, appliances, etc., in the home. We understand why buyers prefer a home that’s move in ready. You don’t have to do any work and everything’s included in the mortgage. If your choices are limited, consider a home that needs a few updates. Counter tops and appliances aren’t too expensive to change. Carpet is easy to pull up and replace. Ask your Lender how you can make your dream home a Reality with the FHA 203K.
Best tip to find your dream home?
Work with a Realtor who knows the area. They’ll know the best neighborhoods for a home that fits your needs. If your criteria isn’t realistic, they’ll help you narrow it down to the most important features. They’ll help you find the best matches in your price range. You’ll find your home and have plenty of time left to go “Search for Bigfoot”.