There are so many articles out there that guide you through the process of buying a house. As my husband and I dreamed of one day buying a house of our own, I read through hundreds of articles and posts. Every single one of them fell short, though. There was something missing from all of them that left me confused and frustrated and it took me way too long to figure out what they were missing. I finally realized, none of their lists, directions, and how-to’s started from the beginning.
When you want to buy a house, it starts as a dream.
You fantasize about what your home will look like, the memories that will be created there, and the sense of comfort it will provide. I’m no stranger to those fantasies. If you’re reading this, I’m going to guess that you’ve been dreaming this dream for a while now.
How to make your dream a reality.
If you want to make your dream a reality, your first step is going to be making that dream a little more realistic. While I know it’s not unheard of (thank you HGTV), buying your dream house with a multi-million dollar budget at the ripe old age of 24 when your only source of income comes from your 9-5 as a barista is pretty darn unlikely.
Look at your dream and decide which aspects are ones that you’re not willing to compromise on, regardless of budget. For me, that was three bedrooms to grow our family, a dining room where we could share family meals, and a big back yard to play in.
For you, this could be an en suite bathroom and an internal garage or a condo in the city with a wonderful view. You see what I’m getting at. Break it down and pick which ones are non-negotiable for you.
Start researching early.
Once you’ve figured out what your essentials are, it’s time to do some research. Chances are, you already have a location in mind that is either close to your office, has great school districts, or is just the right distance from your family.
I need to stress with the utmost importance, you are only doing research at this point. Do not, I repeat, do not allow yourself to become emotionally invested in any of the homes you find during your research.
I recommend that you start looking around on Zillow.com to get an idea of what the market looks like. If location was one of your essentials, you’re going to be looking at all of the homes that meet your essential criteria in your desired neighborhood.
If location is not one of your essential criteria, look at homes that fulfill your essentials list in the different neighborhoods of your desired area.
Let me show you why this is so important.
Blawnox, Pennsylvania is a very quaint little suburb of Pittsburgh along the Allegheny River. Homes here sell for an average of $150,000. Now, if you look at the neighboring suburb of Fox Chapel, Pennsylvania, it’s an entirely different story. Homes in Fox Chapel regularly sell for well over $1,000,000. These towns are less than 3 miles apart and the houses are selling for over a million dollar difference in some instances.
(Go ahead and get lost looking at those gorgeous homes in Fox Chapel. They’re totally worth it!)
Why are you researching anyway?
Researching is important because is gives you a framework for your savings goal. One of the first (and biggest) hurdles of buying a house is saving for a down payment and for the closing costs. I’m going to assume that most everyone knows you need to have a down payment when you buy a house but there’s no set dollar amount for how much you need to save. Your research shows you what your dollar amount needs to be.
How much you need to save.
When you do your research, take note of the listing prices. Have an idea as to the highest (and lowest) you are willing to spend on a house. Even though you may not end up paying anywhere close to that number, I want you to use it as a reference for how much you need to save for your down payment.
Look at the highest listing price that you are realistically able to spend and make your saving’s goal 20% of that price. For example, if you are only comfortable spending $100,000 on a house, your saving’s goal is going to be $20,000.
You’re ready to move to the next step of buying a house!
Now that you have a saving’s goal, you’re ready to move to the next step of the home buying process: Saving For a Down Payment and the Closing Costs.