Are you thinking about buying your first home and you don’t know where to look? Are you ready to get out of Mom and Dad’s basement or maybe get rid of that apartment that you’ve been in for years? Look no further. Today I’m going to share with you the five critical steps for buying your first home in Grand Rapids, Michigan.
You can always reach out to us if you want to know more about this. These steps, they’re critical, and so they’re common denominators of a successful home purchase in the West Michigan area.
- Assess your readiness
What does that mean? Get an amount in your savings account that is three to six months. Some people say it’s not necessary. Oh, it sure is because if something should break down, you’re going to then need to reach into that fund and self-fund the repair.
What is a bad idea is if something breaks down and you reach into your wallet and grab the credit card and swipe it. If you can do that and pay it off. Super-duper. I’m getting into the philosophies, sort of my personal philosophies on this, and I promise you they will serve you if you lean into those two, three to six months of your monthly.
Write them all down, make a note of it and multiply that by three, four, or five, I would say four to six. Let’s not do three, four to six months. That way you have adequate savings. Should something go wrong, if an event occurs, furnace, water heater, air conditioning, uh, heaven forbid two of those happen at the same time, you’re going to be able to self-fund that, pull the money out, pay for it, and then replenish that account rather than leaning onto the old credit card.
- Get Pre-approve
Find a lender that is local, has relationships with local real estate professionals because you’re going to have a much better chance of getting your offer accepted. The real estate agents know the lender. They’ve worked with them. There’s a track record there. Okay. I know you work with, maybe you have a bank that you’ve been going to, look for a lender that is in the game of lending money to buyers.
I have a bank that I’ve been with for years. I’ve been with them for 15 years. I have not used them for a mortgage because we have lending relationships with people that know how to get you the right rate at the right time and have relationships with agents, which is a better chance of you getting into the right home.
Here’s the deal, get that pre-approval letter upfront. Don’t wait until later. If you find something on your credit report, now you can get it fixed early rather than waiting until later. That impacts your payment over a 30 year period. This is a big deal. You have time then to clean up the credit. But Kevin, my credit score is perfect.
Guess what? So is mine, got pre-approved. This was years ago, and I was ready to buy a house. Little did I know there was a $12 bill that was lingering from the past that I couldn’t get cleaned up in time. So my interest rate ended up being 0.25 higher, which means my payment went up by like a hundred bucks a month.
This is a big deal. I don’t know about you, but you know, I kind of value that $1,200 a year, so get the pre-approval. Earlier than you might think. You can always re-up it without having to impact your credit score, and then you’re ready to go.
Why is it always that? That’s the most important thing? Because it just is, think about it, of all the things about your house. You can improve your house, you can add on, you can, you can take rooms off. You can make the kitchen better and brighter.
You can add a room, a bedroom, and a bath. You can finish the basement. You can’t change the location unless you move the house, which doesn’t ever happen. So think about how important that is. So get clear on the location.
Proximity to parks, restaurants, and walkability. There’s a walk score, walk score.com. Check that out. This matters a lot because the home that you drive home to every day, home is where the heart is, but the location drives that bigger than anything else.
It has more of an impact on whether you like your home. Than any other factor is where it’s located. So get clear on that, get the top one, and then maybe two others, but don’t go so broad that you’re willing to live in 20 locations. It’s going to be frustrating for you as someone looking for a home and extremely hard to hone in on that right place.
- Get clear on your must-haves
Your must-haves are not the same thing as I might like. So this market, especially now, and as we’re moving into a different type of market, is not the type of market that everything is I want to have, or I need to have. This is clear that you need to have the top things that you must have in a home, get clear on what those are and these are things you cannot settle for.
So in other, it matters more if you have a garage, if you want a garage, than say, I need to have a fence in the backyard. Why does that matter? Because putting a fence up is not that big of a deal. To add a garage is a bigger deal. So you see what I’m saying here? So I must have three bedrooms because I have X amount of people that are going to occupy the property versus say in the same example, I must have a fenced backyard.
I had somebody that was just adamant about the fenced backyard. I’m like, it’s going to be like a thousand bucks. But they were missing out on great homes because of the fence thing. Don’t worry about the fence. Install that later. Get the must-haves down. I must have bedrooms, I must have a garage. Is it attached or detached? You get the idea. So those are your must-haves.
- Lock into a relationship with a real estate professional
Someone with a proven track record that has the capacity to find homes that are not on the market.
What? Not on the market. Right? Because this market has changed. There’s a lack of inventory. We have low supply, and high demand in January, and that’s going to continue, that trend will likely continue throughout the year. So what does that mean? There are not as many homes on the. And that means that your agent has got to be a baller.
Someone out there looking for the property while you are sleeping, your agent is working and looking for homes that are off the market, knocking on doors, making phone calls, and doing the work. They have your back. They know what your must-haves are, they know your location, and every waking hour of the day, they’re focused on finding that right home for you.
So lock into that right agent and make sure you’re doing the five steps. I will repeat them. Number one, have an inadequate savings. So that’s assessing your readiness. Number two, get a credit. Um, get your, uh, preapproval letter, making sure you have your credit score. You can clean anything up that’s, uh, negative on that.
Number three is location, location, location, location. To get clear on that number four is to find your must-have list and super critical, hire the right agent to get the job done for you. It’ll make a big difference in the negotiating power and finding that dream home so you don’t have to settle.