Topics:Homeowner Tips Downpayment Home Improvement First-Time Homebuying Working With An Agent Successful Selling House Hacking Best Mortgage Rates Companies real estate investing Closing Costs Home Loan Research
Guest Post by Baruch Mann (Silvermann) When you've fallen in love with a prospective home that checks off your "must haves" — the extras from your wishlist, the neighborhood you really love, the garage space you've dreamed about — it is time to move on to the next steps. While you’ll get more important details about the property, it must pass the inspection process. Additionally, since you’ve fallen in love with the property, others may feel the same way, so you’ll want to move on with the process as quickly as possible. If the property is attractive, there may be a lot of competition from other buyers. So, is it possible to deal with both tasks — passing a home inspection and beating out competing buyers — simultaneously? Can you learn if it’s the right location for your specific needs? Can you win a bidding war? How do you deal with the inspection process? And what about your finances? Figure out the final details Now that you’ve found the home that you’re interested in, use these strategies to figure out a bit more about the home and your new location: Ask the right questions — You can obtain lots of information with some basic questions. You should start by asking why the seller is selling the home and how long they lived there. Start to build a relationship that could be helpful during the negotiation process. If you're looking to buy a house that has been frequently moved out of, it could be a sign that there is something wrong in the area that requires closer attention. Are there any problem neighbors? Are there traffic issues, crime, or local businesses that could pose a difficulty? You may notice the neighborhood has lots of litter or bright lights. Conversely, there could be barking dogs at all times of the day and night and broken street lamps. Any of these issues could be a warning sign not to buy, so it is crucial to ask early on and avoid homebuyers' remorse from not asking enough questions. Talk to an agent — While you should know what's going on in the area, you may lack local knowledge. It is crucial to talk to a real estate agent to gain real insight into the area. If you're new to the area, you may not be comfortable with certain aspects of the neighborhood. Ask about issues such as school catchment areas, litter problems, parking, traffic, and noise. Think about all the things that could bother you and ensure you ask the agent about the possibilities. Visit the property at different times of the day and night, so you can get a realistic picture of the neighborhood. Use online neighborhood comparison tools — Numerous online tools can give you a general overview of new neighborhoods. Realtor and HomeFinder will not give you the skinny about the home, neighborhood, crime, schools, and more. GreatSchools.org, on the other hand, can help you to find out where the schools rank. You can compare new neighborhoods with where you currently live. This will help you to find a similar neighborhood or one with better schools or lower crime rates. Win a bidding war on the house you really want How do you win a bidding war on the house you want? It’s a very important question to consider, and here are some steps you can take to help ensure that the home will be yours: Make a good impression when you initially visit the home. Be polite, ask questions, and develop a rapport. Real estate can be a highly emotional process — the seller may be emotionally attached to their property, so it is nice to express what you like about it and why you want their home. Work with your realtor to compare listings in the area, so you can determine the right amount to offer. Generally, the more competitive the market, the nearer to the asking price you'll need to be. Come with cash. Not everyone is able to do this, but if you're in a position to make an all cash offer, you'll have an advantage. In very hot markets, with heavy investors, there are usually cash offers on the table. Sellers will be reluctant to deal with the possibility of loans now coming through, or they may not want the delay needed for mortgage processing, so cash is preferred. Develop a relationship with the seller. In the end, real estate is all about people. As we touched on above, a good relationship with the seller could help you to win a bidding war. So, you should start working on your relationship from the moment you initially visit the house. You could try writing a personal letter to the seller, explaining why you want to buy the house. If you have a young family, you could write about picturing your kids enjoying the cozy family room or playing in the yard. You could also write about how much you love the neighborhood and are looking forward to becoming an active part of it. Use the win/win perspective when negotiating Your best strategy is to position yourself as a strong buyer who’s serious about getting to the closing table. However, don't skip negotiations and be ready to walk if necessary. One of the worst things you can do is get over emotional and overextend yourself. Many people make the mistake of starting each negotiation like going into battle. This will not only annoy the listing agent you're likely to work with again in the future, but it could hurt you in the long run. Instead, focus on solutions. This will help you to avoid turning every point into an adversarial crisis. Understand what is important for the seller and aim to allow them to feel that they also won. For example, if there is a roof issue, but the seller wants to sell and move now, you could ask for a discount and do the repair yourself. If the seller is unwilling to compromise on the price, you could request extras that were not included in the home inspection report. Dealing with a rejected offer If your offer is rejected and there is no counter offer, you need to ask the seller’s agent for a reason why. There are limitless reasons why sellers choose not to move forward with an agreement. For example, the seller may have received several offers, and yours may not be the most attractive. Alternatively, the seller may decide to wait for an even better offer. If you discover your offer was rejected due to a better offer from someone else, find out if the other offer has been accepted. If the offer has already been accepted, you’ll need to start shopping for a new home. However, if the offer is still in the negotiation stage, there may be time to present a new offer. This will mean working with your agent in a bidding war. If you’re a first-time home buyer, reach out to your agent for tips on making an attractive offer. An agent familiar with the local market, who has negotiation experience will provide an invaluable resource for you during the home-buying process. Managing the inspection process When dealing with inspection, it’s recommended to have someone who understands the process with you. Understanding the inspection process is mainly based on experience, but if you know someone who deals with inspections this can be even better. When I bought my first home, I had no real idea of how it worked, so I called my father. He had a lot of experience and knowledge, so he paid attention to the details, asked the right questions, and helped me to understand potential problems. Although you'll get a report, it will be easier to understand a problem that's been explained to you, so you can see what the issue is. To negotiate for credits or repairs, you should start by obtaining a local contractor or construction professional estimate for how much the repairs should cost. If you're working with a real estate agent, they can handle the negotiations on your behalf. Supply your agent with a copy of the inspection report, so they can use it as leverage when working with the listing agent and the sellers. Make sure you get the right mortgage for your needs You need to ensure you weigh things out appropriately, and you work on which mortgage lender will be best for you and your family in the long term. This may be paying equally from the beginning or paying a little now and more later. This is based on three different things: The mortgage term — The loan term has an impact on every aspect of the loan. It affects how much you pay every month, the interest costs, and other expenses. With a longer term, you will have lower payments, making it attractive for many people, but you need to be prepared to pay more in the longer term. Interest rates and types — A fixed rate means that there will be no change in how much you'll pay. Adjustable rates are subject to interest changes, usually at specified times. Which type is preferable will depend on your specific circumstances. Mortgage types — In addition to choosing between a fixed and adjustable rate mortgage, you should look at conventional mortgages versus government loans. Each of these has drawbacks and benefits, so carefully consider these before you make a final decision. Buyers should have their funds for closing costs readily available. You'll need to be ready to wire the funds or present a cashier's check on the day prior to closing. Lenders require proof of sufficient funds for a down payment and closing costs before closing. You should also bring copies of the paperwork you received or signed during the home-buying process, plus two forms of ID and the payments you need to make. Baruch Mann (Silvermann) is a personal finance expert and founder of The Smart Investor, a financial online academy for millennials that helps thousands invest smartly and make better financial decisions.
A mortgage is a type of loan that is used to finance a home purchase and gives your lender the right to take your property if you fail to make your payments. Most homebuyers need to get a mortgage, unless you can pay for the full cost of the home out of pocket. Julie Aragon, a trusted mortgage expert at Julie Aragon Lending Team, explains that getting a mortgage should always be your first step in the homebuying process: “Talk to a licensed loan officer (aka mortgage lenders) as soon as possible (definitely before you fall in love with a property) so you can understand how much you can qualify for and what types of up-front and monthly payments scenarios you'd be looking for at different purchase price points. If you're already using a real estate agent, get a recommendation from them.” To qualify for a mortgage loan, certain eligibility requirements must be met, including having a good credit score (generally at least a 580), and a low debt-to-income ratio of less than 50 percent. How does a mortgage work? Like other types of loans, your lender gives you a set amount of money that you are required to pay back over a set period of time. In addition to your loan balance, you will also be required to pay interest on your loan, which will be determined in large part by your creditworthiness and how much of a risk you pose to your lender. In most cases your home is used as collateral, meaning that the lender has the right to foreclose on your property if you miss a mortgage payment — foreclosure generally doesn’t occur until you’ve missed two or three consistent payments. How do I get a mortgage? Getting a mortgage can seem like a daunting process, but it really comes down to choosing the right lender and mortgage loan type for you. 1. Check your finances Because your mortgage interest rate and ability to qualify for a mortgage is reliant upon your creditworthiness, it is important to check your credit score. You may even need to work to improve it if possible, allowing you to get better rates and terms. Andy Kolodgie: Owner of The House Guys industry expert Two important things when qualifying for a mortgage: The two most important things when qualifying for a mortgage are credit score and debt to income (DTI) ratio. However, there are a multitude of other requirements that you can get caught up in (such as a minimum 2 year job history). Your DTI ratio ideally needs to be 43% or less but certainly no more than 50%. In terms of credit score, the higher the better — but any higher than 760 won’t make a difference for qualifying). The minimum credit score (unless you’re doing a VA loan, which has no minimum) is 540. While there are mortgage options if you have bad credit, doing what you can to ensure that you have a healthy credit score could save you a lot of money in the long run. In most cases, you should strive to have a credit score of at least 700. 2. Determine what you can afford It is important to take stock of your finances, make a budget, and crunch some numbers so you know how much money you will need to buy a house, including a down payment and closing costs. Ensuring that your finances are in order could save you time in the mortgage process, especially if you have an idea of what size down payment you can make. It can also provide you with peace of mind, knowing that your finances are in order and that you’re prepared to meet the costs of buying a home. How much money do you need to buy a house? Calculate how much money you will need upfront to buy a house — including a down payment, closing costs, moving expenses, etc. Calculate 3. Build your savings Buying a house is a large expense, and so it is likely that you have already built up your savings to make a down payment and pay closing costs. But, even beyond those expenses, you'll want to build up your savings so that you have some wiggle room if an emergency arises or you are met with more costs than you initially anticipated. 4. Choose a mortgage lender There are a lot of different mortgage companies to choose from, so how do you pick one? A good place to start is by comparing interest rates, fees, and down payments across lenders. Interest rates vary by loan type and term, but the average rate you will see across the industry is approximately 3 percent APR. Many lenders offer lower rates, such as AmeriSave with rates as low as 2.328 percent. The interest rate you will receive will be dependent on your credit score and current finances, so it can be helpful to pre-qualify with various lenders to compare the rates that you would get. Many mortgage lenders have an application fee, loan origination fee, third-party fees, and other government processing fees. The cost of these fees may vary by lender, and some lenders may not have certain fees, and so it is important to do your own research to see what fees your top lenders have. For a conventional loan you can generally make a down payment as low as 3 percent, but this will also depend on the lender that you choose. Sundance Brennan: American Financial Network, Inc. Industry Expert Tips for choosing a mortgage lender: There are a lot of mortgage lenders in the marketplace. When people ask me who they should be working with, it’s usually less about the rates and fees and more about service and trust. The playing field has been leveled in terms of rates and fees that are allowed to be charged and there isn’t really a wide range of costs in today’s market. You can certainly find some price differences, but in the macro sense, our borrowers are savvier than they have ever been. With information readily available on the internet, lenders have found that they need to be priced very near their competitors to find success. That should give the borrower some peace of mind knowing that reasonable prices happen when there is an open competitive market. Read reviews online, find a personal referral if at all possible, and make sure that when you speak to your loan officer you are comfortable with all of their answers and guidance. In addition to typical mortgage factors such as rates and fees, we wanted to know what mortgage consumers were most concerned about in a mortgage lender. So, we took a look at the mortgage company reviews left on BestCompany.com. From these reviews, customers most often mentioned the following in their mortgage loan experience: 65% mention customer service 38% mention speed and efficiency in the overall mortgage process 20% mention transparency 16% mention interest rates Customer service For the majority of consumers leaving reviews, customer service is one of the most important aspects of the mortgage process. In many reviews, consumers name specific loan officers that they worked with, either describing positive or negative experiences. On many mortgage company websites you can search for loan officers to try and find the best fit for you and your needs. Speed and efficiency It takes an average of 30 days to process a mortgage loan application, but in many cases, this process can take a much longer amount of time, up to 60 days. But, consumers prefer companies that can process an application quickly and efficiently. Transparency In many negative mortgage company reviews, customers detail experiences in which companies were not transparent with costs — customers were hit with much higher costs at the close of the mortgage loan process than they were given at the beginning of the process. Interest rates It is surprising that mortgage consumers are quick to mention customer service, speed and efficiency, and company transparency before interest rates. Thus, it can be inferred that customers are more concerned about the overall experience of working with a company than rates and terms. However, this is still an important factor in the mortgage loan process, and consumers do want low rates. Julie Aragon: Julie Aragon Lending Team Industry Expert Make sure you read mortgage lender reviews: We recommend finding someone who has a lot of experience in the area(s) you're eyeing for your purchase. Start with recommendations from local friends and/or family who've had good experiences with lenders in the past. No matter what, research online reviews. Read Top Mortgage Company Customer Reviews Compare top-rated mortgage companies and read reviews from real customers to find the best lender for you. Compare 5. Choose the right mortgage for you Since mortgages aren’t “one size fits all” there are a variety of loan options available, allowing consumers to tailor their mortgage to their needs and finances: Conventional loan — The most common type of mortgage loan. A conventional loan isn’t backed by a government agency and is instead backed by a private lender. Generally, this loan type will require a down payment of at least 3%. Adjustable rate mortgage (ARM) loan — With an adjustable rate mortgage loan, your interest rate will vary throughout the loan. This means that your initial interest rate will be lower than with another type of loan, but that rate will fluctuate, raising and lowering your monthly payment as you’re paying off your mortgage. FHA loan — An FHA loan is backed by the Federal Housing Administration and accepts down payments as low as 3.5% with a credit score as low as 580. This loan type can be a great option for first-time homebuyers. VA loan — VA loans are offered by private lenders and are partially backed by the U.S. Department of Veteran Affairs. This loan type offers mortgages to military service members, veterans, and select military spouses with a 0% down payment. USDA loan — Only available to eligible rural homebuyers, a USDA loan is backed by the U.S. Department of Agriculture. This loan type offers low interest rates and a 0% down payment, but you must buy a home in a designated rural or suburban area. Jumbo loan — A jumbo loan is used to finance expensive properties that exceed the limits of a conventional loan. This list is not exhaustive, and it is important to note that not all lenders offer all loan types. But, the lender you choose to work with will be key in helping you know which loan type will best fit your needs. 6. Get pre-approved for a mortgage Mortgage pre-approval is a preliminary evaluation by a lender to determine whether or not a borrower is eligible for a mortgage loan. If you are pre-approved, the lender will provide you with a letter, which will be necessary to have when you’d like to place an offer on a house. In general, it takes 1 to 3 days to receive a pre-approval letter. 7. Go house hunting When you’re ready to start the house hunting process, it will be important to find a real estate agent. While you can buy a home without using an real estate agent, it is recommended to use one to simplify and help throughout the house hunting process. "Real estate agents take a bigger responsibility with the whole process in buying a house. When you are a first-time home buyer it is best to ask for assistance from real estate agents since they will make your home hunting easier," says Ben Singh, Owner/Founder of SEEB Homes. "They will be alert for issues that might not cross your mind when buying a house and they will address it quickly. It will save you a lot of time and money since they can give you researched, current, and reputable data regarding a neighborhood's demographics, crime rates, schools, and other important factors." 8. Close on a home Once you’ve found the home of your dreams, it’s time to close — transfer the ownership of the home from the seller to you, the buyer. If you have a real estate agent, they will take care of the majority of the closing process. But, this process generally includes getting a home inspection, renegotiating the home sales prices, if necessary, completing your mortgage application, getting homeowners insurance, and then signing on the dotted line of the closing documents. Who are the top mortgage lenders? We took a look at customer reviews for the top-rated mortgage companies on BestCompany.com, and we noticed that customers most often outlined sentiments and experiences with customer service, the overall loan process, and interest rates. Keep reading for a breakdown of customer reviews for each company. AmeriSave Mortgage search Highlight: AmeriSave offers an efficient loan process and low rates. AmeriSave Mortgage is one of Best Company's top picks for a mortgage lender, offering low rates and a quick and easy loan process that will get you to closing faster. AmeriSave Mortgage was founded in 2002 and has funded over $55 billion in home loans and has been trusted with over 280,000 homes. As the top-rated mortgage company on BestCompany.com, 87 percent of AmeriSave Mortgage reviews are 4 or 5 stars. From these positive reviews, we gained the following insights*: 59% of customers mentioned positive experiences with customer service. Loan officers were professional, knowledgeable, and quick to respond. 42% of customers mentioned that AmeriSave’s loan process was fast and easy. In addition, 21% of customers specifically noted how they appreciated that the AmeriSave loan process was almost entirely done online. 23% of customers mention low and competitive rates. AmeriSave Mortgage Customer Review: Joyce from Newport News, Virginia “They were very quick, efficient, and handled everything well. They knew all the answers to questions I had and they were just fantastic. They had my process finished in a month and a half. The whole experience was just fantastic.” *Data and insights are taken from a sample of 100 AmeriSave Mortgage reviews. Learn more about AmeriSave Mortgage New American Funding search Highlight: New American Funding offers outstanding customer service. New American Funding is one of Best Company's top picks for a mortgage lender, offering outstanding customer service with loan officers who will help you at every step of the loan process. New American Funding was founded in 2003 and has funded over $33.6 billion in over 137,000 home loans. Ninety-nine percent of New American Funding reviews are 4 or 5 stars. From these positive reviews, we gained the following insights*: 82% of customers mention positive experiences with customer service. Customers were able to receive personalized help quickly and loan officers were reliable and knowledgeable. 35% of customers mention how fast and easy the New American Funding loan process was from application to close. 16% of customers mention low and competitive rates. Speaking to these points, and especially to providing exceptional customer service, Rick Arvielo, New American Funding cofounder and CEO, states: “New American Funding considers itself to be a family, and our clients are part of the family too. We believe in developing industry-leading technology and combining it with unparalleled customer service to create the best possible mortgage experience for our borrowers. That philosophy has led our company to become one the nation’s largest and most respected lenders.” New American Funding Customer Review: Mark from Columbus, Ohio “They frequently checked in with me during the house buying process to make sure I had everything I needed. Once I found the home I was ready to purchase, they made sure I was informed and understood each step along the way until I closed on my new home!” *Data and insights are taken from a sample of 85 New American Funding reviews. Learn more about New American Funding NBKC Bank search Highlight: NBKC Bank offers an efficient loan process and oustanding customer service. NBKC Bank is one of Best Company's top picks for a mortgage lender, offering outstanding customer service with top-notch loan officers that customers frequently mention positively by name in reviews, and a quick and easy loan process that will get you to closing faster. NBKC Bank was founded in 1999 and offers a full suite of traditional banking services. The company has a top-ranked mortgage program and offers discounts to Costco members and home loan savings for all. Ninety-eight percent of NBKC Bank reviews are 4 or 5 stars. From these positive reviews, we gained the following insights*: 89% of customers outline positive experiences with customer service. The majority of reviews mention specific loan officers by name and that customers felt like they were receiving prompt and personal care. 50% of customers mention how fast and easy the NBKC Bank loan process was from application to close. 14% of customers mention low and competitive rates. In addition, customers also frequently mention low fees and closing costs. NBKC Bank Customer Review: Alexander from Alpharetta, Georgia “I am a first-time home buyer, and despite the whole process is pretty complex, I found all communication to be amazingly swift and smooth. NBKC offered us a great mortgage rate, and our agent, Ryan, managed to get to the closing even faster than we expected…” *Data and insights are taken from a sample of 100 NBKC Bank reviews. Learn more about NBKC Bank Compare Top Mortgage Companies Learn more about top-rated mortgage companies and read reviews from real customers to find the best lender for you. Compare Expert contributors: Julie Aragon, mortgage expert at Julie Aragon Lending Team. Andy Kolodgie, owner of The House Guys. Sundance Brennan, Branch VP of Training and Sales at American Financial Network, Inc. Ben Singh, owner/founder of SEEB Homes.
Even before you start looking at real estate, asking yourself how much money you need is a very good place to start in the home-buying process. If you’re already aware of down payments and closing costs, you can give yourself a pat on the back, but make sure you plan for all costs and expenses, even the smaller ones that you might forget about. So, how much money do you need to buy a house? Honestly, it's probably going to be even more than you thought. But this is no reason to despair. Armed with knowledge of the required costs and a thorough budget, you will be in a good place to start the home-buying process. Continue reading for detailed information on specific costs involved in buying a house, as well as a handy calculator that can help you see how much money you might need to buy a house. Down payment Maybe you’ve heard before that you need to make a 20 percent down payment to buy a home. While this can significantly reduce the size of your loan and cut out the cost of paying mortgage insurance, saving you more money on your monthly mortgage payment, this doesn’t mean that you must pay 20 percent down. In fact, most people make a down payment of 6 to 12 percent. And, there are mortgage loan options that only require 3 to 5 percent down, or no down payment at all: FHA loan — insured by the US Federal Housing Administration and intended for low-credit score borrowers with a minimum down payment of 3.5 percent VA loan — guaranteed by the US Department of Veteran Affairs with a 0 percent down payment USDA loan — offered to rural property owners by the US Department of Agriculture with a 0 percent down payment The majority of loans offering low down payments are backed by government entities, but that doesn't mean that you must pay 20 percent down if you choose a conventional mortgage loan. In many cases, you will be able to negotiate your down payment on a conventional loan, but you will likely get a higher interest rate because your loan will be backed by a private lender instead of a government entity or agency. Dan Green ceo of Homebuyer, a mortgage lender for first-time homebuyers What size down payment should you make? Down payment requirements are flexible, and it’s important to stay within your means. Just because you can make a large down payment doesn’t mean that you should. To find a suitable down payment figure, calculate how much money you’ll need for six months of living expenses and set that money aside. Whatever you have left is safe to use for buying a home. If you would like help in making a down payment, you can look into payment assistance programs. There are 2,000 of these programs available nationwide, and they are generally run by state, county, or city governments. Most down payment assistance can be broken down into two categories: grants or second mortgages. Determining the best down payment for you depends on your personal finances, but there are some helpful things to consider that can help you in that decision process: When is it best to make a large (or at least the 20%) down payment? If you have the means and financial stability, making a larger down payment can significantly cut down your monthly mortgage payments. But, you should consider how much more you will then be paying up front, which may be a large financial hit that could be difficult to recover from. “It's not always better to make a big down payment. The best down payment is the one that doesn't deplete your savings. Life rarely moves in straight lines. It's important to keep cash for emergencies,” says Green. When is it best to make a small down payment? “Small down payments work best when you earn good monthly income and don't have big savings,” adds Green. Especially for first-time homebuyers, it is wise to make a smaller down payment, as this will provide you with greater cash flow in the future, as opposed to putting a large amount of money down up front and depleting your savings. Closing costs While the down payment on a home is a large and important expense, don’t forget about closing costs. Closing costs cover a myriad of fees involved in processing and finalizing a mortgage, and generally come out to 2 to 5 percent of your loan amount. This may not sound like a lot, but say you buy a $300,000 home, your closing costs would range from $6,000 to $15,000. Closing costs generally include the following: Loan application, origination, and underwriting fees Home inspection and appraisal fees State recording fees Property taxes Homeowners insurance Private mortgage insurance (PMI) Escrow fees Warranty HOA costs If you would like to lower your closing cost, since it can be quite a hefty amount of money, there are a few options you could look into, such as grants, or simply asking about discounts and rebates. However, the best thing you can do is plan ahead so that you won't be surprised when it's time to close on your home. Additional costs/fees After determining what percent down you will put on your house and how much money you will need to put aside for closing costs, there are just a few more costs to consider: Moving expenses Unless you have a lot of charitable friends with trucks and a day to spare, you will likely need to consider what it could cost to hire a moving company and/or rent a moving truck. Especially if you are moving across state or across the country, it is very important to consider how much it will cost you to move. On average, the cost of hiring professional movers for a local move will range from $300 to $1,500, according to Move Buddha; if you are moving a long distance it could cost you $2,400 to $5,000. If you’re moving across the country, your costs will increase, and there are other important considerations like the cost of shipping a car. Depending on the distance of your move, be prepared to set aside at least $300 if not more. Home furnishing and maintenance If you don’t have many belongings and/or pieces of furniture to move into your new home, consider the cost of home furnishing. This could include couches, a dining room table, rugs, etc. It is also important to set money aside for home maintenance, such as gutter cleaning or yard upkeep. Be sure to budget for the items you know you will need up front, as this will save you from financial stress down the road. Jeff Beck, CEO and President of Leaf Home Solutions, expands on these points: “According to a recent report, lumber costs have surged more than 170% over the past year, which can add nearly $24,000 to the cost of a new home. Materials such as concrete, metal products, appliances, and other expenses are also increasing due to supply chain disruptions caused by COVID-19 shutdowns. Many first time home buyers, especially in this market, are so motivated to put in the highest potential offer, that they aren’t thinking about maintenance expenses. For example, if gutters are not cleaned within the first six months of owning your new home and water overflows from the gutters, it can fall along the foundation of your home, freeze, and result in cracks. Gutters should be cleaned at least twice a year to prevent damage to your roof and foundation. Certain homes, potentially both new and old, don’t always have proper windows installed to match the weather conditions of the area. Areas susceptible to hurricanes and tornadoes need to consider storm tight windows that properly seal, which as a new owner, you may not notice right away. The upkeep of maintaining a home through your changing needs is important. Many of our customers invest in their homes by introducing features and amenities that represent convenience and accessibility, such as walk-in tubs and high-quality stair lifts. Our products and installations provide peace of mind to customers that their home is secure for every phase of life.” How can I save money on my home purchase? After reading through all the costs involved in buying a home, making some estimated total cost calculations, and likely coming face-to-face with one intimidatingly big number, you might be wondering if there is any way that you could save money on your home purchase. You might be able to save some money, but the truth is, it really comes down to the mortgage lender you choose. From our review data, we were able to get an idea of some of the “cost experiences” consumers were having with different mortgage lenders in the industry: (*Note: “reliable” and “unreliable” costs refer to whether or not costs changed from application to closing) 5% of all reviews mentioned costs — either low or high costs, or getting hit with costs they weren’t aware of when they applied with a mortgage lender. 21% of reviews mentioned NBKC Bank’s low and reliable costs*. 12% of reviews mentioned Quicken Loans’ high and unreliable costs*. *Taken from a sample of 121 reviews. If you are looking to keep costs as low as possible, NBKC Bank may be a good choice. Of the more than 400 customer reviews, 95 percent of customers award NBKC Bank 5 stars, highlighting low rates and fees, and a painless process with no surprises. NBKC Bank is an online bank with physical branch locations in the Kansas City area, and it also offers a discount to Costco members. Read NBKC Bank customer reviews As a well-known mortgage company, Quicken Loans is a popular choice, but customer reviews are almost an even split between 1 and 5 stars. Many positive reviews highlight good experiences with customer service, but many negative reviews outline very high costs which, in some cases, were tacked on at the end of the loan process, giving customers a rude awakening. Read Quicken Loans customer reviews Compare Top Mortgage Companies Learn more about top mortgage companies and read reviews from real customers. Compare Expert contributor: Dan Green, CEO of Homebuyer, a mortgage lender for first-time homebuyers
Buyer’s remorse isn’t just for late-night impulse buys on Amazon Prime. A 2019 Freedom Debt Relief survey reveals telling data about the prominence of buyers remorse among homeowners. More than a quarter of respondents said the cost of owning a home is a burden, and they would rather rent. And even many satisfied being homeowners expressed various regrets around their homeownership, including the following: They should have saved more for the down payment (69 percent). Their monthly mortgage payment is too high (52 percent). They were not aware of all their mortgage options (41 percent). They are unable to afford needed upgrades to their home (60 percent). Maintenance and repairs are more effort and cost than they expected (59 percent). Their property taxes are higher than planned (50 percent). They should have shopped around more for a mortgage (57 percent). When it comes to purchasing a home, the stakes are high. Often it makes more financial sense to rent for the time being. If you are planning to buy, be sure to consider some common regret-inducing mistakes homeowners make — and what you can do to avoid them. 1. Underestimating the commitment level involved Contributor: Ron Humes, VP Operations at Post Modern Marketing If finding and contracting a new home is like a sugar rush, buyer’s remorse is the sugar crash the next day. For many people, it is the realization that they have pulled the trigger and committed themselves to one of the most substantial and important investments of their lives. Buyer’s remorse is more common in first-time homebuyers and people who have not moved in a long time. It can range from a mild questioning of a decision to a paranoid state filled with anxiety and tears. Do this instead: Analyze, strategize, and counsel While a home is a personal choice in a buyer’s personal life, it should be treated like a well-strategized business decision. Make certain the buyer has a firm grasp of their exact needs and wants in a home. This process will be different for each buyer based on their personal tastes and experience with the housing market and options. It is easy to get caught up in the emotion of home shopping, especially in a market where homes are selling fast and buyers are competing for properties. A home should never be an impulse purchase. Analyze all the information and sleep on the decision, if needed, to be comfortable before making the offer. If you need input from others, bring those individuals on the home showings whenever possible. 2. Buying a fixer upper you can’t afford to repair Contributor: Klara Donovan, Blogger at Her Happy Heart In 2008 my husband and I bought a cheap, old home in a cheap, old area. It was all we could afford at the time, but we thought that any house purchase would be a good investment in the long run. After 10 years of fixing all its problems and renovating it completely on the inside, the housing market crashed hard. We had to choose between cutting our losses and selling it for a lot less than we purchased for (not to mention the thousands we had spent fixing it up), or continue pouring money into it and hoping that the market picked back up. We knew it was due for another couple of big repairs (full roof restoration and some fencing) within a year or so, and for that reason we chose to sell at a big loss, but are glad we did, as the market has only dropped further since we sold it. Do this instead: Save more money than you think you need The lesson we felt we learned is that if you can only afford to buy a cheap, old home, you can’t actually afford to buy a home. Had we been renting, we wouldn’t have been paying mortgage interest, council and water rates, or the thousands spent on renovations, and we would have been able to save up to buy a much better home a few years down the track. Instead, we are now renting and beginning to save for a home deposit from scratch. 3. Prioritizing home wants over an emergency fund and other financial needs Contributor: John Grimes, Realtor at BHGRE Metro Brokers Sometimes as a couple shops, they discover that their needs are needs and wants and not within reach in the price range they started out in. The budget can creep up at times. Being house poor is no fun. Having no emergency fund, and worrying about inevitable home repairs can be stressful. Do this instead: Buy less house than you can afford It is very important that they draw the line at a level they're comfortable with going forward with no rosy assumptions of increased income. Ideally, a dual income couple should buy a house that either one of them can swing on their one income. That almost never happens, but it would reduce stress in the household. Buying below one's means leaves room for savings, vacations, entertainment, charitable giving, and other priorities. 4. Focusing only on the down payment Contributor: Luke Babich, CSO/Co-founder of Clever According to our studies, while Baby Boomers often had the financial means to put down 20 percent or more for down payments, Millennials prefer lower down payments to ease the capital requirements but have to deal with higher interest rates and larger mortgage payments. Do this instead: Consider all costs to owning a home To combat this, I'd recommend anyone considering buying a house to make a balanced analysis of whether or not they can actually afford to buy a house. There's a common saying that just because you can afford the down payment does not mean you can afford the mortgage! Make sure you factor in important variables: house maintenance (which is on average $13,000 a year), mortgage payments, home insurance, and security. 5. Making renovation decisions independently Contributor: Scott Bates, finance blogger at Money and Bills I bought a home on a concrete slab with a flat roof line with no attic space. The original floor heating system of 50 years went out and there was no option to fix it. My plan when buying the house was to just put in central air and heat. Because there was no under floor space or an attic, the cost of the retrofits were going to be way too high to make it worth it. I found this out after buying it! So I put in a wall furnace and AC unit instead. This is one of several mistakes I made, but the biggest overall. Do this instead: Consult a professional regarding potential improvements When buying a fixer-upper home you need to get advice from a home improvement professional on its overall potential for making the improvements you're expecting to make. 6. Not tracking project costs Contributor: John Bodrozic Co-founder of HomeZada When you don’t budget and track costs on home remodel projects, you can end up way over budget. Plus, you don’t have a record of costs that can help you adjust the tax basis of your home at tax time. Do this instead: Budget and record expenses from day one Keep thorough digital records of your home remodel projects. This can help you in the future when you decide you want to sell the house, since it is your biggest financial asset and largest expense. 7. Skimping on a home inspection Contributor: Wally Conway, President of HomePro Inspections There's an old adage that there are no good surprises in real estate. If a buyer is surprised after moving into their dream hope, it is a surprise of damnation not delight. Do this instead: Pay more for a highly-qualified inspector The single best way to avoid buyer’s remorse is to have clarity on what you are buying and have protection for the unexpected. Your home inspection should be performed by the most experienced and technically competent home inspector that money can buy. Most buyers are taking on a 30-year mortgage, and that’s a long time to live in regret. It's also 360 mortgage payments! Wouldn't it seem wise to invest a mortgage payment to ensure that you have done as complete a job in due diligence as is humanly possible? Consider protecting your home after the inspection is done by choosing a home inspection that includes in the inspection fee protection to cover the cost of the unexpected problems that will come up with home ownership, such as live sewer line failures, mold, and roof leaks. 8. Missing preventable red flags Contributor: David Pipp, Personal Finance Blogger at Living Low Key Shortly after we moved in to the house, we had a massive rain storm and ended up with water in our basement. It wasn't until that issue arose that we noticed there were no gutters on the back side of the house where water got in. $2,000 later we had new gutters on the house and our water problem was fixed. Since we moved in, we have had to add a water filtration system to the well, replaced both of the decks on the house, replaced a leaking toilet and countless other small fixes totaling close to an additional $10,000. Next summer we plan to have the house re-insulated because it gets really cold during the Minnesota winters. Do this instead: Get a second home inspection We finally have the house at a point where we are happy with it and have fixed most of the issues. If I were to buy another home, I would hire two separate home inspectors. As a first-time home buyer, I didn't know what to look for and I realize now that my home inspector I hired wasn't that good. Having two separate opinions, plus my newfound knowledge of being a homeowner, would definitely help us catch some of the things we missed the first time around and save us a lot of time and money on our next house. 9. Not getting a home warranty Contributor: Jlyne Hanback, REALTOR® Keller Williams Realty One of the biggest regrets that I have seen home buyers have in the past is when they don't purchase a home warranty! Many home buyers are not prepared for the unexpected expenses that can come up after their purchase, such as an air conditioner going out or a refrigerator needing to be replaced. I know of a client who didn't purchase a home warranty and their air conditioner stopped working two days after closing, even though they had an inspection done on the home. Do this instead: Get a home warranty! A home warranty is a relatively inexpensive way to protect the major appliances and systems of a home for a specific period of time after the home is purchased. A home warranty can — and should — be negotiated into the contract on behalf of the buyer so that they are protected after their home closes. 10. Choosing a location with a long commute Contributor: Steffa Mantilla, Debt Payoff and Wealth Building Strategist at Plantsonify Instead of renting for a year to get a feel for the area, we purchased a house right away. Our house was 20 minutes from my husband's job but over an hour away from mine. Since we hadn't lived in this area before, we didn't realize the terrible commute times that would be amplified in the winter. I remember there being entire weeks that a commute one way was easily 2.5 hours due to snow. I was also spending $5 each way on tolls every day. Do this instead: Get familiar with prospective locations When moving to a new area, rent for a year or two. Yes, it's a pain to have to move twice, but it's worth getting a feel for the area. You'll choose a better location and home in the long run. Make sure your commute is reasonable. A commute of 30 minutes or less is probably the maximum that is sustainable for the long-term. There will be some days with traffic accidents and other events that push the commute time longer. The less time you spend on the road, the more time you get to enjoy your house and family. 11. Missing neighborhood nuances Contributor: Gerard Splendore, Broker at Warburg Realty I sold a one bedroom apartment to a first time buyer and we only viewed it when school was in session, not at the beginning of the day for drop off of end of day for pick up. At the walk through the day before closing the street in front of the building was clogged with school buses and parents in cars. This came as a complete surprise to the buyers. Do this instead: Visit the property multiple times I always suggest seeing properties during the week at various times, in the evening and on weekends. This is a great way to avoid any surprises about the surrounding area. 12. Shopping before you’re ready Contributor: Michael Edlen, Coldwell Banker Residential Brokerage I have observed dozens of transactions where buyers don't complete a purchase, or may close but then have regrets about it. Although every situation is unique, I think a common characteristic is that they and their agents have not done well in managing expectations. Do this instead: Hash out a detailed checklist prior to house hunting It would be helpful if the buyers have a written list of must-haves and another of would-be-nice to have before they start the process of home searching. Buyer’s remorse often results from a delayed realization that the home does not really suit most of their needs, or that the compromises required would actually be too great. 13. Assuming newer means better Contributor: Daniele Kurzweil, the Friedman Team at Compass Everyone loves walking into a home and seeing that there is no work to be done. Bring your toothbrush and you are home. Many developers and home flippers are catering to people who want new new new and design their projects to conform to whatever the latest trends are. Our clients walked into an apartment and fell in love with the open concept look with very modern finishes. Fast forward six months and our clients realized that while an open concept floor plan might be wonderful for a two-story house, in an apartment it poses its own unique challenges. Sound travels, and when you have one big open room you have nowhere to escape to. The modern finishes were beginning to look dated, and since everything was out in the open, it was the only thing they could focus on. Do this instead: Consider the pros and cons of a new buy or build Design trends are just that — trends. When purchasing a home, be sure to consider what your needs are. Is this for starting a family? Empty nesters? First-time home purchase? Think of buying a new construction home kind of like buying a car: the second you drive it off the lot, it starts depreciating in value. You are buying new construction because it has never been lived in, and as such you are paying a premium. But when you go to sell, one of the biggest draws will no longer be there...it will no longer be new. Move forward without regret Two common regrets expressed by respondents in the aforementioned study is that they should have shopped around more for a mortgage and that they were not aware of all of their mortgage options. The answers to those issues are financial preparation, education, and awareness. Learn about the different mortgage products available to you. Get loan offers with interest rates from multiple lenders. And before settling on a particular lender, read customer reviews about the top-ranked mortgage lenders. Are there hidden lender fees? Are the loan officers prompt to return calls and emails? Are other borrowers pleased with their experience? Buying a home, unfortunately, can come with buyer’s remorse. But if you prepare properly and learn from the mistakes of others, you can make the best decision possible without looking back.
Guest Post by Holly Welles Homebuyers with a larger budget are often interested in a larger property. They believe it's in their best interest to buy a house with more yard space, more rooms, and more storage. While this may seem preferable to a smaller property, it's almost always better to buy less house than you can afford.In truth, having more of something doesn't mean you'll make the most of it. It's common among homeowners to spend a majority of their time in a few select rooms, leaving the rest of their living space unoccupied. The reading nook they planned to use only gathers dust, despite their initial intentions. So what should you keep in mind during the homebuying process? How will a smaller property help with your financial situation? We'll walk you through everything you should know on the subject, looking at the top five reasons to purchase only as much as you need when searching for a home. 1. Maintenance responsibilities Your maintenance costs will vary depending on the size of your property. With a smaller home, you won't need to spend as much on tasks like landscaping. A larger home may present a problem, as these higher maintenance costs will compound and build up quickly over time. It's also crucial to give thought to your long-term situation. Once you retire, you'll still need to manage your property and maintain its condition. This may prove difficult if you have limited mobility, and something as simple as shoveling snow or raking the leaves could take considerable effort. 2. Home repairs and upgrades Repairs and upgrades are inevitable for any homeowner. Whether you fix a fence or attend to a leaky faucet, your property is an ongoing investment that demands your time and money. Long after you purchase your home and pay off your mortgage, you'll still have expenses to manage. With that in mind, it's vital to plan for expensive repairs and upgrades. It’s inevitable that you’ll need to replace windows, fix HVAC systems, and replace a roof every 10–15 years, for example, and the costs of the renovation could seem overwhelming. Owning a smaller home will make it easier to save money and address these issues as they present themselves. 3. More opportunities to save If you're planning for children, you likely see the appeal in a larger property. Your kids will run and play without the restrictions of a smaller space, roaming your backyard with the family dog. This freedom is important, of course, but you also have to consider your children's future comfort. More specifically, you may have to help your kids through college. It's far less challenging to contribute to their college savings when you spend less on mortgage payments and maintenance costs. While your children need room to grow, they also need financial support. 4. Mortgage and PMI payments Many of today's homebuyers can't afford a traditional 20 percent down payment. Some of them choose to pursue an FHA Loan, an accessible option with a low down payment. Unfortunately, these new homeowners need to pay extra for private mortgage insurance, or PMI, on top of their regular mortgage payments. It's an additional burden which can place strain on your financial situation. If you plan on buying a larger house with an FHA Loan, you should study the risks involved with that purchase. Before you proceed with an FHA Loan, it's essential to learn more about what the commitment entails. 5. Emergency preparedness When searching for a new home, you'll need to confront a few questions that may feel uncomfortable to think about. If you were to lose your job, suffer an injury, or undergo a similar hardship, would you have enough money to pay the bills? Could you accommodate the expenses of a larger home? If the answer to those questions is "No," you should look for a property which is well within your price range. Beyond the typical benefits you can expect, you'll have more resources to manage an emergency. A sudden illness or unexpected termination won't cause as much turbulence in your life. Buying the right amount of house As you move forward, give thought to the advantages of a smaller property. It's often better to buy less house than you can afford, even if you're willing to spend more on a larger home. Regardless of your eventual choice, you can feel confident knowing you made an informed decision. Holly Welles is a real estate writer and the blogger behind The Estate Update. You can find more of her tips on homeownership, finance, and investing on Twitter.
Most often the hardest part about buying a house is saving up for the down payment, the closing costs, and the associated fees. A large chunk of your savings, or maybe the entirety of it, is all going towards one of the biggest purchases of your life. So where do you start? How do you plan to save enough money for this important purchase, and how do you stick to such a plan? Here are a few financial tips you could implement into your home-buying plan: Make a detailed budget The first and most important step to saving money is creating a detailed budget. If you don’t have a plan, you may fall back into bad habits and let saving money for that dream home slip through your fingers. There are free budget templates you can get online, or you can design a personalized one of your own. Whatever you prefer, just make sure it is something you think you can stick to and benefit from. Schedule updates Having a plan is great, but if you don’t have regular updates and keep up with it, your master plan can easily fade day by day. Making time for weekly, monthly, and yearly updates is a great way to make sure you are staying on task and saving as much money as you had originally planned. Initially, it might even be beneficial to do daily updates, especially if you have a hard time getting into the habit of saving money. Put the money somewhere you can’t access easily People have different ways to save money, whether it be saving it in a big jar marked “Dream Home” or keeping it in their checking account for easy access. These may be options that work for some people, but we suggest changing it up a bit. Having your saved money easily accessible can often prove to be a temptation. If you put your saved money somewhere that is difficult to get to, there is a better chance that you will not defy your budget. One way to do this is to open a separate savings account that is not linked to your checking account. Keeping money in your checking account could end poorly if you forget how much money is supposed to be saved and what money you can spend. (This is also where a budget can come in handy.) Additionally, there is often a withdraw limit on savings accounts that resets monthly, making it more difficult to keep withdrawing money from it. This could prove to be the financial motivation you need not to touch the money you have in savings. Utilize automatic saving tools If you have your paychecks automatically deposited into your account, most employers also offer an option that allows you to allot a certain amount of your paycheck to be taken out and put straight into a savings account. That way, when you get your paycheck, you won’t even have to worry about putting aside the money yourself; the money will already be separated. Cut out any unnecessary expenses Part of saving money is deciding what expenses are necessary and what expenses you could really do without. Try making a list of all your monthly expenses and decide which ones you can get rid of. This will help lighten the load on the things you have to pay for and will ultimately help you reach your savings goal faster. Saving for a home can be overwhelming, but if you use these financial help tips, we think your experience will go much more smoothly.
Buying your first home is one of those milestones that you build up to for years. There are many questions to ask before making such a big commitment: Am I ready? How do I start the process? Do I have enough money saved? There are a lot of i's to dot and t's to cross. And, unfortunately, watching HGTV isn't enough to fully prepare you. Thanks to the assistance of over 10 real estate experts, we have created a house hunting checklist guide that will make your house hunt easier. Eventually you'll have the confidence to tackle the home buying process like a pro! Let's get started, choose one of the five house hunting tips to dive deeper into or start from the very beginning. Get financially fit Build a strong real estate team Get a full pre-approval Evaluate what type of home you want Determine your priorities and deal breakers 1. Get financially fit Not everyone knows how much money is enough for a decent down payment. There are misconceptions about the importance of credit scores as well as income requirements that can affect your loan approval as well. Consistently save for your home Regardless of how soon you plan to purchase a house, it is beneficial to put aside a certain percent of your income to ensure that saving money becomes a consistent habit. Saving at least 20 percent of your income is a good place to start. Depending on the housing market and your income, you could potentially be ready to purchase a home in the next 12 to 16 months. If a 20 percent savings goal is unrealistic in your current situation, you can put aside a smaller amount for a longer period of time. When saving money to buy a house, it is also important to factor in closing costs in addition to the down payment. This is going to call for more money out of pocket—further planning and budgeting is essential. Closing costs usually account for about two to five percent of the purchase amount on the house you are closing on. Work on your credit score Your credit score plays a significant role in the loan process. Although credit score requirements vary based on the type of loan and loan agency, anything below a 620 is most often considered poor. Having a credit score above 620 is going to increase your loan approval odds. Be aware of your credit score and do everything you can to increase it in order to get the best rates possible when house hunting. Senior Loan Officer Kim Hankins advises prospective homebuyers on specific ways to protect and improve their credit score: Treat your credit score like your adult GPA, and be organized and conservative with your finances — that’s all a lender could ever dream. First-time homebuyers often overlook the importance of a strong credit score. An 800 credit score is more valuable than $100,000 in the bank. How to strengthen your credit score: Open credit ASAP — just two cards Don’t charge more than 30 percent of the high limit Pay monthly to 10 percent of the high limit and do that again and again Avoid late payments Determine how much home you can realistically afford Utilize financial calculators and consult with lenders about your financial situation to determine a reasonable loan amount and price cap. John Bodrozic, Co-Founder of HomeZada, recommends doing thorough research of the costs associated with homeownership: Use mortgage calculators to estimate your monthly payments and estimate the annual household expenses such as utilities, property taxes, and preventative and normal repair costs. Once you have these numbers, then you will know what price range of a home your finances will support. This method makes sure you are looking for house that is within your budget, versus getting emotionally attached to homes you really love but financially you cannot afford them. It also helps you be a more competitive and ready buyer because once you have the financial aspects down, you are ready to move quickly when you find a home that works for you. Other competing buyers for the same home may not have their financial house in order so you can move quicker with your offer. 2. Build a strong real estate team Shop around before committing to a lender Doing research, talking to loan companies, and getting quotes is going to be the best way to discover what lender and loan type is best for you. You can consult our list of top-rated lenders to learn more about specific lenders and what they offer. There are also several loan types, so it is important to find the one that best fits your individual situation. Determining factors on loan choice include loan length, payment choices, credit score, and interest rates. Keep in mind that not all lenders offer all loan types. Kendra Barnes, Founder of The Key Resource, offers her best house hunting tip for lender shopping: How to comparison shop for a home loan: How to comparison shop for a home loan: Shop around. Most buyers go with the first lender they call because they aren’t aware that they can shop around! Just because a bank gives you a pre-approval letter does not mean you have to stick with them! Ask about incentives. Ask the lender if they have any incentives such as lender credit at closing or fee waivers. Make them compete for your business. As you’re shopping around, be sure to tell each lender you call what the other lender is offering. Ask them if they are able to match or beat that lenders terms. Find a realtor who is a good fit House hunting is demanding enough. Consider using an expert real estate agent to guide your decision making every step of the way. They can take the pressure off of you by helping you find houses that are in your price range and meet your expectations. They also have extensive experience in the process as a whole, so they are invaluable resources for questions and advice. But every realtor is not a good fit for every buyer, there are practical considerations to keep in mind when choosing a real estate agent. Shawn Breyer, Owner of Breyer Home Buyers, describes what buyers can do to maximize efficiency and success within the realtor-client relationship in a fast paced market: You should be find properties online and then do a drive-by as soon as possible before reaching out to your realtor. When you do this, you will quickly weed out homes that don't match your criteria. Imagine that you're trying to find a home in a well-maintained neighborhood and a couple of the neighbors have cars parked in the yard that they are working on. These are things that Google Maps or the listing may not show. You will weed out properties much quicker with this approach while respecting your realtor's time by not making them meet you at houses that you instantly realize you don't want to buy when you pull up. In a competitive market, speed is king. Find a highly recommended property inspector Alex Romanov, iwillbuyhouse.com Co-Founder, emphasizes the importance of an oft-overlooked aspect of house hunting: Prior to house hunting, every buyer should find a highly recommended property inspector. A careful property inspection done by an expert can save you tens of thousands of dollars of costly repairs. Therefore, the top inspectors are highly sought after and are often booked for weeks in advance, so it helps to get one on your team as soon as possible. 3. Get a full pre-approval Prepare paperwork and complete a loan application Senior Loan Officer Amy Tierce describes why it's smart for prospective buyers to work with a lender from the very beginning: Speak with a competent mortgage lender if the borrower is not looking to purchase for as long as a year out. Why? Because there are many items that can impact qualification, starting with credit. If there is a error on the credit, getting it corrected can take weeks, which is often too late if you have an accepted offer on a home. Self employed (Schedule C) buyers need to look at year over year income and may want to change the way they file to maximize income. Multiple asset accounts or complicated down payment strategies may also need to be addressed. For example, if a borrower is getting a gift, or has money in a trust or other financial vehicle, some adjustments may need to be addressed prior to buying. Imrad Poladi, Vice President of NextHome, describes what the ideal pre-approval process looks like: It's been said before, but having a complete pre-approval process with a reputable lender is critical in the early stages of a home search. Buyers should aim to have as deep of an approval as possible. Do your best to get what is known as underwriting approval, which basically means that the buyer has been vetted to buy a home up to a certain purchase price and all that is left to do is find the right home. The lender sees no current red flags on providing the buyer a home loan. Talk to your lender about buying down your rate Poladi also suggests buyers look into buying down the interest rate on their loan: Depending on the type of loan, every $1,000 negotiated down only saves the buyer a few dollars per month. But if the buyer buys down the rate, the savings could be far more significant on a monthly basis. I suggest that a buyer talk to an agent and/or lender for further clarification on how this would work. 4. Evaluate what type of home you want Before deciding what you want and need in your new house, it's a good idea to compare the pros and cons of buying a move-in-ready home versus a fixer upper. Compare the benefits of a turn-key home or fixer upper John Bodrozic, Co-Founder of HomeZada, explains how buyers can compare the implications of the choice between a turn-key home or a fixer upper: How to choose the right kind of home: Turn-key: A ready to move-in house commands a premium purchase price. So as an example, with a $400,000 house with a 20 percent down payment of $80,000, your mortgage would be $320,000. At current market rates, with a 30-year fixed-rate loan of 4.5 percent, the buyer’s monthly mortgage payment would be $1,620 and you would pay approximately $263,000 in total interest over the 30-year loan. Fixer-upper: Let’s assume the same size home might sell for $325,000. A 20 percent down payment would be $65,000, which would be upfront cash savings of $15,000. The mortgage would be $260,000, which at the same 4.5 percent interest rate would be a $1,317 monthly payment, which is a savings of $303 every month. The total interest on this loan would be $214,000, which is an overall $49,000 savings from the other scenario. The ability to pay for those renovations could come from the savings in down payment along with the savings over time of having a lower monthly mortgage payment Realtor Tania Isacoff Friedland of Warburg Realty weighs in on the question of how much capital and time is realistic to invest in a property: Some first-time buyers think they'll like the excitement of a renovation, but it's important to take into consideration the realistic cost and time involved to complete the work. In addition, renovating to your taste level or specifications is not always what someone else will want, so I caution first-time buyers doing a renovation not to "over-renovate" and to keep things simple. When it comes time to re-sell, no one wants to overpay for someone else's renovation. Many first-time buyers don't have the time or energy to endure a renovation and will pay up for modern conveniences in a new development. Don't be misled, as there's still work to be done in new construction aside from decorating. For example, you will most likely have to outfit the closets and wire for audio-visual technology. Determine what home and yard maintenance you can handle Realtor, Broker, and GRI Frances Dawson reminds first-time home buyers to consider yard maintenance: One common pitfall for first time homebuyers is not considering the maintenance of properties compared to the time they want to spend. A condo or townhome has a monthly fee for maintenance, but frees the homeowner's time for other pursuits. A property with a big yard or acreage, while appealing, can quickly become an overwhelming drudge or an expensive chore to hire out. 5. Determine your priorities and deal breakers Dream up what you want (and what you don’t)! Knowing what you want may sound like the easiest task of them all, but this can be difficult to decide, especially if you are buying a house with someone else. If that is the case, our best house hunting tip would be do find middle ground on both your wishlists. Here are a few questions that you can asks yourself to nail down your must-have for you potential home. Do you want a quaint, petite house? A large, sprawling one? How many bedrooms are you looking for? Where do you want the house to be located? Do you want a big yard? Do you want to live in a populated neighborhood or a secluded area? And underlying all of these important questions: do your wants match your price range? If you know what you want ahead of time, the process of buying a house is going to be less grueling. If you are buying the house with someone, make sure you communicate with each other your deal breakers. Decide together what you can and can't live without to create a vision of your future home. Realtor Tracey Hampson recommends the whole family participate in this part of the house hunting process: I always recommend doing a want list and a need list with the whole family. It helps so much! I wish my previous buyers had listened to me and done this. We had been looking for homes for about six months and they finally decided on a gorgeous home, but when they told their children they burst into tears because they did not want a swimming pool! I know, what kid doesn't want a swimming pool? So including the whole family is always a good idea! Aside from the essentials (i.e., number of bedrooms, bathrooms, square footage), some home features to consider when you're making your wish list are ceiling height, closet space, versatility of the space, proximity to schools or work, gated communities, outdoor space, as well as additional storage in the building. Study cities and neighborhoods in-depth Suburban Jungle Founder and CEO Alison Bernstein shares three recommendations for town and neighborhood hunting: How to find the right location for your home: Don’t prioritize the house over the town in which it resides. The goal is to find a place where the culture and values of the town match yours. You can always trade up or down for a new home, add a third bathroom, or renovate a basement. Don’t excessively limit your search area by your commute. Just 10 more minutes on the train or bus could perhaps score you a lot more for your money. Don’t over romanticize walkability. Often, buyers coming from more urban centers feel they need a house as close to the shops and restaurants as possible. The reality is that schooling, sporting events, and other activities often take place out of the town center, limiting the importance of this feature. From a purely non-subjective standpoint, House Heroes Co-Founder Earl White recommends looking into neighborhoods that are most likely to hold value over time: Nobody wants to buy property in the process of depreciating. Sales comparison prices and online estimates look back in time, not forward. The clearest sign that a neighborhood will continue to hold its value is average days on the market. The days on market part of a listing tells you how long properties take to sell - it is an objective measure of neighborhood demand. If properties are sitting around for long periods of time at a certain list price, market values will fall below that price. When houses are "flying off the shelf," it's a good sign values will be stable or even appreciate. Similarly, regardless of sales comps, if houses are sitting on the market and not moving, it's a sign prices are on the way down from those list prices. Take a deep breath Are you feeling overwhelmed? Second-guessing your pursuit of buying a home? Focus on the benefits of homeownership It's a big deal to buy a home and there's a lot to consider and prepare. If you follow these steps and are in a financial position to purchase, you can do this! Real Living Reserve Realtors Associate Broker Christine Allocca brings attention to the fact that paying a mortgage has significant benefits over paying rent: Remember that comparing a rent payment to a mortgage payment is not apples to apples. New home buyers can deduct mortgage interest on up to $375,000 of debt for individuals and up to $750,000 for married couples. Additionally, rents always go up in the long term while mortgages don't. Steve DiMarco, President of Key Mortgage Services, reminds first-time buyers of the long-term benefits and achievability of homeownership: While it's a seemingly large investment at the time of purchase, this is an investment in your future and your overall wealth. The investment goes beyond the physical home. You're not just purchasing a piece of real estate, you are building wealth. Homeownership is the first very important step toward that wealth creation. I tell first-time buyers that they are overlooking how achievable homeownership is. There are so many programs for first-time buyers - programs that require as little as three percent down. That's a few months of savings right there to get you into your home. Don't forget to get your handy home buying process checklist below.
There is no shortage of entertaining home buying, home improvement, and property investment series on TV. If you imagine your typical show, it may follow a familiar format: The would-be homebuyers are chauffeured around by a realtor, visiting various listings, walking inside, arguing, and visualizing the ideal scenario. In some cases, the home in question would make a great fixer-upper, flip project, or income property. The buyers discuss nuts-and-bolts costs, estimated renovation project time frame, and sometimes negotiate with the seller. The realtor spends about 15 seconds saying something like, "Let's just double-check with the bank," and then, an hour and some time-lapsed renovations later, the happy couple has a home! Easy peasy, right? Expectations vs. Reality Anyone who's actually traversed the complex and often lengthy home-buying process understands that these shows tend to oversimplify just how much goes into buying a home. To be fair, HGTV's priority is not to highlight the boring loan approval and offer acceptance waiting games that accompany the home-buying process (nobody wants to watch that!). Nevertheless, this and other aspects are vitally important to be aware of. House flipping and other home renovations — as popularly portrayed in Fixer Upper and Good Bones — are common considerations among first-time homebuyers and veteran homeowners alike. According to a Houzz survey of over 130,000 homeowners, over 50 percent of them had completed renovations or planned to in both 2017 and 2018. In an Open Listings survey, over 500 homeowners were asked what they would most likely do if they had $10,000 to allocate towards housing. 73 percent said they would use it toward current home renovations while only 27 percent said they would put it towards a down payment on their next home. Whether you’re looking for a move-in ready home, a place requiring some renovations, or a true fixer-upper, here are 10 important details about home buying that TV doesn’t always show. 1. Buying a home (usually) takes time Lots of us are suckers for before and after pictures without regard to the time it took in between, whether it’s a dramatic fitness transformation or a home makeover that’s turned grungy into gorgeous. On average, the home buying process takes about four and a half months from shopping to closing but can range anywhere from 30 days to the greater part of a year. Debra Carpenter of Sandpoint, Idaho’s Nathan Oulman Realty has noticed that many first-time buyers are unaware of the time it can take to make offers and finalize an accepted offer. “Reality shows don’t portray how long it takes to close on a house once you’ve made the decision to buy,” Carpenter explains, but she admits that while the process definitely takes longer than it appears on TV, “the feeling of being in your new home is completely worth it.” When faced with TV-inspired unrealistic expectations from clients, top agent Lisa Larson of Warburg Realty in Manhattan wisely poses the question, “Would you take relationship advice from The Bachelor?” Chew on that food for thought! Larson continues, “If you watch reality shows, be aware that they are scripted and edited versions of reality. The irony, of course, is that the popular and entertaining shows on HGTV set up unrealistic expectations when it comes to renovation, its expense budgets, time constraints, and obstacles — as well as real estate in general.” Quickly flipping a home and expecting a huge return profit is not feasible in every market, especially for the inexperienced. Larson cautions agents against promising multiple offers over the asking price of a home and finding a deal good enough to flip soon after. This process requires patience — sometimes years of searching for an opportunity where all stars align. 2. Your credit score is a crucial factor Two words never really mentioned on House Hunters are "credit" and "score." Your credit score is among the most influential determinants in the home-buying process, especially if you need to take out a home loan (and most first-time buyers do). Your credit score is measured by a number of factors, including your credit history, the number of lines of credit under your name, and how prompt you are in making your monthly payments. Banks and other lenders pay close attention to your credit score to help them quantify your trustworthiness in paying back a home loan on time. Generally, if your credit score is above 700, you are considered a low-risk borrower, and lenders have confidence they will get their money back. If your credit score is too low (below 600), you will be considered high-risk and likely won't even qualify for a home loan. Most lenders won't even make you an offer if your credit score is below 620. Even if your credit score is good enough to place you in the market as a buyer, the lower your credit score, the higher your mortgage interest rates and monthly payments are likely to be. Sometimes a greater down payment is also required. And, of course, higher rates and payments can in turn affect how much home you can afford. Take a look at these data projections (courtesy of myFICO.com) to see how your FICO score can influence your annual percentage rate (APR), monthly payment amount, and total interest paid — assuming you live in Colorado and are requesting a principal amount of $100,000: FICO Score APR Monthly Payment Total Interest Paid 760-850 4.469 % $505 $81,744 700-759 4.691 % $518 $86,515 680-699 4.867 % $529 $90,340 660-679 5.081 % $542 $95,042 640-659 5.51 % $568 $104,630 620-639 6.055 % $603 $117,113 As you can see, a bad credit score will not only lock you into a higher rate but also force you to pay more each month, resulting in an additional $35,369 in total interest paid! 3. Luxe features require a larger budget In the Open Listings survey mentioned previously, respondents were asked which amenity or feature they didn’t have in their current home that was a “must” in their next (or, presumably, a renovation requirement). Top responses included hardwood floors (18 percent) and quartz or granite countertops (15 percent). Additionally, Doug Smith, president of Miller & Smith, a Washington, D.C.-based home builder and real estate developer, has seen "a seismic shift in buyer expectations” over the last few years. “Today’s consumers bypass anything mass produced in exchange for ‘artisan’ products, fixtures, and features,” Smith says. “Thanks to the HGTV phenomenon and saturation of home improvement shows, many buyers expect luxe features, such as hardwoods on every floor and granite or quartz countertops, to come standard at all price levels.” Of course, that’s simply not the case. The price tag of such specialized features is above standard levels, and the customization homeowners crave may not always be feasible for the average budget. That doesn’t mean homebuyers, flippers, and builders need to be millionaires to make their homes into something that suits some of their preferences. But be prepared to pay more for luxe renovations or to buy a move-in ready home with them. Smith explains that his company finds the balance in offering customization and providing simplified options through a selection process where homebuyers can capitalize on what is most important to them. 4. Your debt-to-income ratio matters What you might not realize while you're binge-watching Property Brothers is that homebuyers almost always go into debt when financing a home. However, if lenders predict that you're about to take on more debt than you can handle, they will not make you a loan offer. Right behind your credit score in order of importance is something called your "debt-to-income" ratio, or DTI. Simply put, your DTI measures your housing, monthly, and other debt expenses against how much you earn. This number shows creditors how well you can manage your debt payments and, unlike your credit score, you want to keep this number as low as possible. Usually, lenders won't even give you the time of day if your DTI is above 43 percent, meaning 43 percent of your income goes directly to managing your debt. The ideal DTI ratio is at or below 36 percent. Lenders pay particularly close attention to two types of DTI ratios: Front-End DTI: Also known as the housing ratio, the front-end DTI shows the percentage of your income that goes exclusively to housing expenses, such as mortgage payments, mortgage insurance, etc. Usually, your front-end DTI needs to be around 28 percent or lower in order to qualify for a mortgage. The higher your front-end DTI, the more likely you are to default on your mortgage. Back-End DTI: The back-end DTI measures what percentage of your income goes to paying off other debts, like credit card payments or car payments. In simple terms, you can only improve your DTI ratio in two ways: either increase your income or decrease your debt. Unfortunately, these methods tend to be easier said than done. While there's no magic bullet answer for increasing your income, some smart strategies can help you cut down debts and improve your personal finance management. 5. Managing renovations can get messy In Fixer Upper, Chip and Joanna Gaines never shy away from the physically messy aspects of flipping a home, whether it’s removing an abandoned refrigerator with rotting food or discovering a termite infestation in a crawl space. But if you’re not a contractor yourself, you need to be on top of your game managing the various parties renovating your home. John Bodrozic, co-founder of HomeZada, says that home improvement shows completely underestimate how you, the homeowner, need to manage your contractor on the remodel projects. HomeZada helps customers negotiate pricing, build budgets for projects, and track documents and photos to manage your contractor. Bodrozic explains, “You need to review a contractor’s quotes, make sure they are licensed and insured, check their references, and agree to a contract with payment terms that protect you.” Otherwise, you can end up paying more than you bargained for with unsatisfactory results at best — and damaged property at worst. Bodrozic also advises homeowners to take pictures during the remodel to document in case things go wrong “so you can hold your contractor accountable to finish the project to your satisfaction.” Keep in mind that before renovations or even a purchase, a proper inspection that goes more than skin deep is key to determining if a house is worthy of an offer. And, like hiring a contractor, that depends on someone else (in this case, the home inspector) doing a job right. Ben Mizes, founder and CEO of St. Louis-based Clever Real Estate explains that “the walkthrough process isn’t like as seen on TV. There’s much more meticulous inspection of the core systems of the property and looking for major red flags than it is talking about dream floor plans and designs.” A good home inspector won’t let emotions interfere with what should be a thorough and unbiased inventory of the condition of the home. 6. Mortgage rates change every day Occasionally, while you're watching your favorite home-buying program, you might wonder why either the homebuyers or the realtor is particularly anxious to close the deal on a certain day or at a certain time. While this urgency can be attributed to excitement at starting a new life (the homebuyers) or getting paid (the agent), it might also be due to the fact that they've happened upon a particularly good mortgage rate and want to strike a deal before that rate goes up. The fact of the matter is that mortgage rates operate very similar to stock prices: they fluctuate frequently, even several times a day. This is why it can be almost impossible to get a stable rate quote ahead of time. Take a look at this chart (courtesy of Zillow.com) to see just how much a mortgage rate can dip and spike in just one day: Mortgage rates change so often for a variety of reasons, many of which revolve around the current state of the economy and economic forecasts. Thankfully, mortgage rate aggregators like Zillow can clue you into the best mortgage rates at any given time, and many top mortgage companies will update their mortgage rate estimators according to market conditions. 7. Soft costs are involved Jonathan Faccone, managing member and founder of New Jersey-based Halo Homebuyers, says that whether it’s from the house-flipping show phenomenon or the first-time home buyer shows, everyone thinks they know what it entails to purchase and renovate the perfect home. However, a key element missing from the media portrayal is cost. Faccone explains that “the flipping shows never show you what the ‘soft costs’ are when purchasing a fixer-upper.” These soft costs include all the costs other than the actual construction-related expenses that will be incurred and include, but are not limited to, the following: Title insurance Attorney fees (in certain states) Home inspection Home insurance (impacted by vacancy and need for a builder’s risk policy) Closing costs Carrying costs When planning your home purchase with renovations in mind, plan for the expected soft costs as well as for the inevitable unexpected. Faccone suggests that the amount of money a typical buyer thinks a home needs for a renovation budget should be doubled. “I am always going over budget in my own projects because of the unknown fixes that I didn’t expect lurking behind the walls.” Alberto Marinas, CEO and co-founder of PadBlock, reminds buyers about the impact of the appraisal on the home sale. The price, the value of upgrades, and the reliability of current appliances may not be appraised to the agreed purchase price. Not to mention the cost of new furnishings for the home once the renovation is complete. “This can derail even the most cooperative seller,” he explains. “Unless the buyer has additional cash to cover the difference, the asking price will have to drop to the appraisal price. More often than not, in today’s market, the buyer has just enough cash for downpayment and closing fees — and not a penny more.” Finally, adequate insurance for a house requiring major renovations can be steep. Scott Johnson, founder of Marindependent Insurance Services in the Bay Area, California, explains that “consumers often fail to disclose to the agent their intentions [to flip] and often go mis-insured.” He describes two issues regarding property insurance during a house flip: If you are not planning on living in your new purchase in the first 30 or 60 days, then the home will be considered vacant and you are not eligible for typical home insurance. If your home undergoes significant construction, you should secure a builder’s risk policy protecting contractors and workers on your property. So how much does proper coverage cost under such circumstances? Johnson says it’s impossible to say without knowing all of the details of a situation, but a builder’s risk policy can easily cost $3,000 per year, while a regular home insurance policy might only cost $900. 8. There are different types of mortgages Wait, what? Whenever agents on TV tell clients something like, "Alright, now we just have to fill out some paperwork," they are most likely referring to the loan application. And somewhere on that application, the future homeowners will have to indicate which type of mortgage loan they are shopping for. The sheer number of mortgage loans is the many-headed monster of the home-buying process and includes FHA loans, VA loans, Jumbo loans, USDA loans, Conventional loans, and ARMs. Each type of loan has unique eligibility requirements, advantages, and disadvantages, but for the purposes of this article we’ll touch on two types: Fixed-Rate Mortgages: The main benefit of choosing a conventional or fixed-rate mortgage is you know exactly how much you'll be paying each month for the term of the loan. The one main drawback, however, is that fixed-rate mortgages tend to initially sport higher rates than do adjustable-rate mortgages. The most popular term lengths of fixed-rate mortgages are the 30-year and the 15-year. Each term length has strengths of its own. Mortgage Type Advantages Disadvantages 30-Year Fixed-Rate Monthly payments tend to be lower You will end up paying more interest over time, and at a higher interest rate 15-Year Fixed-Rate/strong> You pay less total interest over time, and at a lower interest rate Your monthly payments will be much higher Buyers who want lower monthly payments will often go with the 30-year fixed-rate mortgage, but a 15-year mortgage gets you on track to pay off your home loan in half the time, avoiding a bulk of the interest payment. Adjustable-Rate Mortgages (ARMs): Adjustable-rate mortgages are just as they sound: over the course of your loan, the rates and monthly amount you pay are subject to change. This can either be a good or a bad thing depending on your future plans (e.g., how long you plan on staying in the home, how comfortable you are with changing your rates, etc.). Just remember, while you might initially pay a lower interest rate than you would with a fixed-rate mortgage, that can easily change in as little as a year. Below is a list of some of the most common ARMs available: Mortgage Type Description Advantages Disadvantages 1-Year ARM Interest Rate Changes year-to-year Qualifies for a higher loan amount; good for flipping Considered risky, as payment can change significantly each year 10/1 ARM Rates fixed for first 10 years; fluctuates for next 20 Lower rates than 30-year fixed rate (at least for first 10 years) Bad for those wanting to stay in the same house for more than 10 years 2-Step Rates are fixed for first part of mortgage, and adjustable for the second Borrowers can choose when to pay fixed vs. adjustable Rates could adjust upward following fixed period 5/5 and 5/1 ARM Rates are stable for 5 years, then adjust every year or five years until loan is paid off Good for borrowers who can accept periodic changes Bad for short-term homeowners 5/25 ARM Rates stable for 5 years, then adjusted at year 6. Rate only changes once in 30 years Rate could adjust upward for a 25-year period 3/3 and 3/1 ARM Rates are stable for 3 years, adjust every year or three years until loan is paid off Good for borrowers wanting a new rate after 3 years Bad for long-term borrowers Keep in mind that if you’re considering buying a fixer-upper, ideally you should be ready with a cash offer with minimal contingencies so that you can land a great deal. “The better deal you can get,” explains Jonathan Faccone of Halo Homebuyers, “the more margin you can build in for unexpected costs, along with being able to put in your desired finishes and renovation requirements.” Faccone says the problem is that most home buyers don’t have enough cash to fund both the purchase and renovation. In that case, there are conventional and FHA 203(k) rehabilitation loans that can cover the difference, “but the amount of paperwork that you have to do and the red-tape of the process can put a damper on your first flip experience.” It’s clear that funding a flip is not for the faint of heart! 9. Knowledge and grit don't guarantee success Successfully renovating a home or even purchasing the perfect move-in ready home can’t be guaranteed on a certain timeline or with certain financial limits, even for the most persistent buyers. Grit, talent, or strong emotions alone won’t carry a sale or renovation to fruition. An evolving market and other factors outside your control are at play. John Bodrozic, co-Founder of HomeZada, laments that real estate TV shows “tend to focus on the lifestyle and emotional aspects of buying a home and fixing it up while glossing over financial details” such as negotiating strategies on how much to offer based on list price and other market comparisons. In addition to knowing how much of a down payment you can make and the loan amount you qualify for, “it is wise to get a comparative marketing analysis (CMA) to help you determine your approach” when it’s time to make an offer and negotiate. Remodeling costs, too, can vary dramatically based on your product and brand selections and the market conditions with local contractors. In regards to a complete remodel, even the most experienced flippers find that things unexpectedly go wrong throughout the process. Many of the experts we consulted for this piece shared their own not-made-for-TV stories. Ben Mizes, founder and CEO of Clever Real Estate, says, “I wish these shows would share that investing and flipping isn’t as glamorous as it sounds. When I first started investing in real estate, I did all my own work, and there was a lot more of hauling old cabinets and 2:00AM sewer clogs than there were brand new houses and excited buyers.” 10. A good lender is crucial Brad Pauly, owner of Pauly Presley Realty based in Austin, Texas, thinks HGTV makes buying real estate look easy. And, surprisingly, he says it can be — “as long as you have the right people working for you!” An agent with years of experience is important because “the seasoned agent has already experienced all the potential pitfalls of the home purchase.” Pauly explains that a good lender is crucial because once a buyer puts a property under contract, the lender is responsible for getting the buyer’s loan approved — and on time. So how do you choose a good mortgage lender? Obviously, some mortgage lenders are going to be better than others. The home loans industry can seem difficult to navigate, especially if you're a first-time homebuyer. So here are some guiding questions to keep in mind before you sign any paperwork: What do mortgage reviews say? Read real, verified customer reviews to determine if a lending company provides good customer service and follows contractual agreements. How transparent is the lender? One of the most important qualities of a trustworthy mortgage lender is how honest the company is about what you, as the borrower can expect throughout the process and what the company generally charges for lender fees. Which loan type are you seeking? The type of loan you seek for your purchase and/or remodel is important because not all lenders offer every loan product available. Is a fixed-rate or adjustable-rate mortgage best for your long-term plan? For a remodel, will you purchase with a 203(k) renovation loan, or finance with a conventional loan, then fund your renovation with a personal loan, credit card, or another method? Who can give you the lowest rate according to your credit score? As we discussed, interest rates vary, but get an interest rate estimate from multiple lenders to see how each lender’s rates compare to the national daily average. If you’re disappointed we've ruined the picture-perfect world of your HGTV binge-a-thon, take heart in knowing you can still embrace the entertainment value of these shows while also being armed with the knowledge of important details often left out of these portrayals. And when the time comes for you to play the lead in your own, real-life house-hunting drama, you’ll have realistic expectations to guide you and keep you grounded through the excitement!