Decide to buy

Coming up with a perfect mental picture is easy. Understand that every desired feature—from more space to a well-kept lawn to certain neighborhood amenities—will have an impact on a home’s price. For instance, if you’re looking for a place with a large yard on a cul-de-sac where your kids can ride their bikes, it’s probably going to be more expensive than a modest home with a small garden.

Similarly, if you prefer more bedrooms, that will influence the final purchase amount as well. (And if you ever were to sell it in the future, these features would affect the property’s list price then, too.)

Usually, larger and more expensive homes tend to appreciate less than smaller homes in the long term. What’s a reasonable benchmark in terms of size? In 2020, the median square footage for a completed single-family home was 2,261 square feet.

To give you a sense of how much inventory is out there, nearly 80% of homeowners in the U.S. own a single-family home.

Of course, home type is a very personal choice. But consider factors such as your lifestyle, cost of maintenance, desired features, and the years you plan to live in the home when deciding upon the type you’d like to buy.

1.       What is my ideal neighborhood?

Do you prefer a bustling neighborhood with quick access to food, art, culture, and recreational activities? Or are you the type that would rather be in a quiet, leafy suburb – one which has all the amenities and is still close enough to your place of work?

Once you’ve settled on what type of home you want, it’s important to give a lot of thought to your ideal neighborhood. And if you’re a real estate investor, consider other key factors like school zoning, transportation facilities, and future development plans for the neighborhood that could boost the property value appreciation.

But now’s not the time for unbridled optimism. Apart from the above, there might be negative consequences to choosing a certain place. For example, if the region is prone to natural disasters or extreme weather, you might need to take out additional insurance. For example, properties located in flood-prone areas will require flood insurance.  

2.       What are the costs involved in buying a home?

Before buying a property, it’s important to know all the hidden expenses involved in the transaction so that you can factor them into your budget.

Typically, those include:

  • Property taxes in the area
  • Homeowner’s Association (HOA) fees
  • Homeowner’s insurance (HOI)
  • Closing costs
  • Moving fees
  • Attorney fees
  • Maintenance and repair costs
  • Appraisal and home inspection

3.       Do I need a real estate agent?

According to the National Association of REALTORS, a majority of homebuyers “hired an agent to help them find the right home.” A real estate agent (a buyer’s agent, to be specific) plays a pivotal role in getting you that dream home while balancing all the other factors discussed above.

It’s like having an expert in your corner. For first-time homebuyers, an agent can help them discover the exact home they need based on location, amenities, proximity to schools, the number of bedrooms, and other features. If the buyer is a real estate investor, the agent will also focus on factors that matter to them, such as capital growth and rent yield.

Moreover, a buyer’s agent carries out extensive property appraisals to identify the accurate sale price of the home. They also negotiate on your behalf to help you secure a better deal.

Where to start?

Now that you have the insights on smart market timing and the home buying process, below, we’ll share how you can set out on your homebuying journey.

Start with:

1.      Deciding on a mortgage type

Choosing a mortgage that best fits your financial situation saves you money in the long run. But be diligent when weighing your options. For example, a fixed-rate fifteen-year mortgage could be less burdensome compared to a variable 30-year loan. (The prospect of a smaller monthly payment can lead to challenging scenarios if rates suddenly rise.)

Some types of mortgages including:

  • Conventional loans, which are available with low downpayment but have stringent credit requirements.
  • FHA loans, which are easy to qualify for but have strict mortgage insurance requirements.
  • and VA loans for U.S. military veterans and eligible spouses, which don’t require a down payment. 

2.      Getting pre-approved  

Being a well-informed buyer—and the kind that sellers want to work with—starts with financial pre-approval. Getting pre-approved by a lender gives you the assurance to pursue your home-buying dream. It means the lender is confident in your loan repayment ability.

As a lender reviews your finances in detail, a pre-approval also accurately determines your budget for buying a home.

Once you’ve decided on the type of loan you want, shop around for a mortgage lender who can offer the best mortgage rate, terms, and personalized service. You’ll prove to sellers and their agents that you are a serious buyer, and that’s always a good thing.

3.      Hiring a buyer’s agent

There are a lot of things in life you might choose to DIY. Real estate transactions, however, may not be one of them. After all, a buyer’s agent knows the ins and outs of a local market intimately; they possess the experience and knowledge needed to narrow down your search as well as help negotiate with the seller and the listing agent.

They can save you time and money for a comparatively affordable investment (2.5%-3% of the sale price).

Moreover, it’s their job to maintain an unbiased opinion, unlike the buyers who are likely going to be emotionally involved in the purchase. Emotional attachment tends to cloud judgment—and that alone is reason enough to consider hiring an experienced buyer’s agent.

4.      Taking a physical home tour

Much of our lives have gone online during the pandemic. However, no matter how accurate a 3D tour seems, it’s important to try to visit a property in-person. Virtual tours often don’t show you the age of major systems or any necessary repairs that could be out of sight. When you’re onsite, you can identify issues much more easily.

It typically doesn’t take more than a a few hours to complete a tour. You could do the walk-through with both the home inspector and the seller. The latter might fix those issues or accept a lower price to close the deal faster. Be prepared to ask questions, take photos and record any issues you find. (You can take video of the property and add commentary while filming, for example, or you could record voice memos on your smart phone.)

5.      Making an irresistible offer

When so many buyers are clamoring for homes, you need to play your cards fast and smart. In today’s hot real estate market, it’s wise to be prepared to make an offer that the seller can’t refuse. Maybe this means forgoing certain contingencies, committing to a faster closing time, or offering a higher amount or even to cover closing costs.

Get the mortgage, finish your paperwork on time, include a home inspection contingency to cover repairs (if you so choose) and in the end, you might just close the deal.

A more prosperous future awaits


Buying a home is part of the American dream. It symbolizes a major achievement in life. Fulfilling that dream, however, requires extensive preparation. From analyzing market timing to understanding the buying process, your readiness can remove critical roadblocks and help you close the right deal faster.

The insights provided above can help you make an informed decision and lay the foundation for a prosperous future. After all, a home isn’t just your abode; it’s an investment that can bring peace of mind and financial security for generations.

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