The home buying process can be stressful, especially in today’s market. Because there is so little inventory in most areas, we call this a “seller’s” market, and buyers can wear themselves out trying to deal with the situation. Here are three tips to make it easier.
1. Know what is really important and what you can compromise on.
When you walk into a house, you’ll see things you like and things you don’t. If the things you don’t like are fixable (such as paint color, carpet rather than hardwood, or the hardware on the kitchen cabinets), then learn to look past them. Even if you can’t fix them immediately, such changes can usually happen pretty quickly.
If, however, what you don’t like is structural (too open, not open enough, not enough bedrooms or bathrooms), then look elsewhere. While we all watch the renovation shows on TV and it seems easy, making structural changes can be expensive and time consuming.
If you are really picky, consider building your home with a production builder that allows you cosmetic choices and some structural changes. Many will allow you to relocate a door, turn a closet into a pantry, or add floor outlets to an open concept space.
2. Look at homes a little below the top of your budget.
When you talk with a lender, they will review your income, assets, debt, and other financial numbers and let you know how much you will qualify to borrow. This usually happens at the start of your home search, so both you and your real estate agent can look at houses at the right price point.
If you stretch to the top limit of your buying power, that could prevent you from making changes that might make a home close to perfect. Keeping your home search a little below your budget opens up the possibility of making cosmetic changes. It also will give you a few extra dollars every month to continue to make the house something you can really love. And if it is your first time owning a home, you will have a bit in reserve for those things you might not have planned for, like higher electric bills or that really great grill for the patio.
3. Just accept the fact that the lending process isn’t logical.
Because the buying cycle in a seller’s market is often a long one, you may end up providing the documentation (such as pay stubs and bank statements) for your loan qualification 90 days or more before loan approval.
Lenders require all documentation be updated within 30 days of the closing of the loan, meaning even if have the same job and nothing about the documentation you provided before has changed, you will need to provide new pay stubs to re-validate your income. And you will also need to provide new bank statements that still show you have the money for the down payment. While it does take some of your time, the best way to reduce the stress and worry of closing on time is to respond quickly to your lender when they ask for something.
The home buying process is ultimately about change, and change (even for the better) can produce stress. Knowing what is important, being wise about your finances, and working as a partner with your lender can keep that stress to a minimum.