5 tips for becoming a homeowner in 2014 from 'Beat the House'‘s Christopher Kromer
Catch Christopher Kromer helping buyers find their dream home on HGTV’s Beat the House, premiering tomorrow, Tuesday, January 7th at 11 PM ET/PT.
“Owning a home is a keystone of wealth—both financial affluence and emotional security.” — Suze Orman
Our homes are one of the most important aspects of our lives. More than just a place of shelter, a home is a place of safety. It’s the center-piece of our families and oftentimes where most of our treasured memories are made. It’s also a reflection of our personalities. Buying a home can be a significant milestone in your life—it’s likely to be your biggest financial commitment, as well as a strong emotional commitment to your future and overall quality of life.
Owning a home has long been an American dream, but buying one is a complicated process in many ways, and can be emotionally demanding. If one of your goals in 2014 is to become a homeowner, here are my top five tips for achieving that:
1. Hire a professional.
Because it’s such an important purchase and there’s often a lot of money on the line, the most important advice I would give buyers looking for a home is to make sure they’re in the hands of the best broker they can find. That broker is going to be their guide, their advisor, and their partner in a very complicated, challenging, intricate, and important chapter of their lives.
I think this is especially true nowadays, where in most areas it’s a very challenging and competitive housing market. There is very little supply and a lot of demand out there, and a good broker—somebody who is a terrific negotiator, works aggressively on your behalf, and really goes to bat for you—is invaluable. Yes, there’s a lot of information that’s readily available, but a good broker will know how to interpret comparable sales, analyze the information properly in assessing market value, and negotiate aggressively on your behalf. Having a professional on your team is essential. As they say in the legal profession, “A man who is his own lawyer has a fool for a client.” I believe the same can be said about the complexities of a real estate transaction—why would you choose to navigate the process without an expert in your corner?
2. Identify your needs vs. your wants.
As you start visualizing your dream home, challenge yourself to differentiate between what you want and what you truly need, while keeping in mind that compromise is unavoidable. We’re all usually forced to reconcile our dreams with our financials and the realities of the real estate market.
3. Get your finances in order.
Create a budget so that you know how much you’re comfortable spending each month on housing. This is important because you’ll fall in love with a home emotionally, and then try to rationalize buying it. Without first figuring out how much house you can afford, you risk falling in love with one you can’t, which may lead to decisions that are not financially sound. You want to look for good value at a price you can manage.
4. Speak with a lender.
If you’re going to need a mortgage, don’t wait until you’ve found a home and made an offer to investigate financing. Gather your financial records and meet with a lender to get pre-approved as soon as possible. Pre-qualification by a lender isn’t enough to put in an offer; it’s a pre-approval that sellers want to see.
5. Pound the pavement.
Once you have an idea as to what you’re looking for and how much you can afford, go out and see as many homes as you can. You’ll develop a real intuitive sense of value the more homes you visit. Knowledge is power and the education will empower you so that when the right home comes along, you’re buying with confidence.
I’ve heard it said that a year is a 365-page book that’s waiting to be written. If your goal for 2014 is to include a chapter on buying a home, I hope the above helps you in fulfilling your dream.