1. Do Your Research First
As buyers, you should do some research ahead of time. Sit down and decide on what things in the home are most important, what things would be nice to have, and what things are negotiable. Make a list of neighborhoods you’re interested in and what things are most important in the area you’re interested in. Make a priority list.
This will help you, narrow down the search parameters and not waste time looking at homes that are not the right fit.
2. Be Realistic
Decide early on what’s most important as you’re filling out that priority list. It’s important to manage expectations. It’s important to point out that you will not find the “perfect” home because that doesn’t exist. The three-sided triangle concept—the triangle has three sides: price, features, and location. You can find a home that meets two sides, but you cannot expect to find a home that meets all three criteria of the triangle. That’s called a unicorn.
3. Get Your Finances in Order
You may not realize that the first thing you need to do is shore up your financial situation. Have you saved enough money for a down payment? Have you checked their credit score? Do you have outstanding debts you need to clear up? These are all questions that need answers before you start thinking about a huge purchase like a new home.
Make sure you don’t do anything that would cost them their new home during the transaction.
4. Get Prequalified First
Once you have figured out their personal finances, the first thing any new homebuyer will need to do is talk to a lender and get prequalified. You need to know how much you can afford before you ever start looking for a new home. You don’t want to waste anyone’s time looking at homes out of your client’s price range. And you certainly don’t want to fall in love with a house you can’t afford.
5. Work With an Experienced Realtor®
This should be a given, especially for first-time buyers, but it’s important for buyers to work with a professional who understands the ins and outs of a real estate transaction. The process can be complicated, full of legal contracts and deadlines, and that you are there to guide them through it.
As a professional, I also advise you to interview at least three agents before you make a decision on who would be the best fit for them. It may sound counterintuitive, but trust us when we say it will actually go a long way in establishing trust with my future clients.
6. Choose Your Moving Timeline
Your buyer clients need to establish a realistic timeline for moving. If you’re expecting to move in the next 30 days, they’re going to have a difficult time making that happen. Have some parameters along how long it takes to find and put in an offer on a home, have it accepted, and go through the process to get to the closing table. Don’t assume it takes months to close on a new home.
7. There’s No Right Time to Buy
You may have some concerns about the economy and the housing market. They may even have some fatalist ideas about another housing crash. The truth is there is no perfect time to buy and no perfect time to sell.
The best time is the time that’s best for them. Real estate, traditionally, has always been a great investment, no matter what the economy is doing.
8. Choose a Neighborhood You Love
You should make sure they don’t only shop for a house. The worst thing that could happen is they find a home you love but end up in a neighborhood that doesn’t fit their needs.
Check out the neighborhood they’re considering buying in. Does it have the conveniences and attractions you are looking for (e.g., schools, restaurants, parks, shopping, entertainment)? True, you have to make some concessions on the things you want, but it’s definitely something to consider when shopping for your home.
9. Don’t Seek Too Much Advice
First-time homebuyers (and maybe even some second- or third-timers) will have family, friends, co-workers, and random strangers offer them advice on homebuying. Just so you know, there might be some good advice offered to you, but much of it will be fear-mongering, outdated information, or even flat-out wrong. That’s why we included this crucial reminder in our house hunting checklist.
It’s natural to seek advice from those you trust. But keep those trusted advisers to a minimum. Ask for help from those you trust most, but then be prepared to make their own decisions. After all, you’re the ones who will be living in the house.
10. Think Long-term
Real estate is more than just buying a house. It’s an investment that can provide leverage against financial hardship. But it’s your job as the real estate professional to help your clients understand how investing in real estate works.
Are you just starting out and looking for a starter home that they can upgrade after a few years? Or are you looking for a forever home? The type of home you are looking for will determine how you should think about your investment. Learn the difference between the types of investments.
No matter what type of home you are looking for, real estate is a long game. Real estate isn’t a quick get-in-get-out investment for most people. It takes time to earn your money back. So prepare them to stay in their home for at least three years.
11. Make Sure to Get a Home Inspection
No matter what type of home you decide to buy, insist to pay for a home inspection. The home inspector’s job is to give the buyer a full spectrum analysis of the home, checking for things they can’t necessarily see on the surface. They will check for foundation, roof, plumbing, and electrical issues to make sure your home is worth the money you are offering to pay for it. In essence, it’s a $500 investment in peace of mind.
12. Don’t Negotiate Yourself Out of a House
It’s the saddest thing to watch entrench yourselves in the negotiation phase of the transaction and end up losing a home you love. Many homebuyers, especially first-time homebuyers, have been taught to believe you shouldn’t offer the asking price on a home. They have learned from somewhere that you should haggle to get the best price possible.
That’s obviously from an old real estate playbook, but you don’t know that. Make sure you keep things in perspective. True market value = what someone will pay. That’s it.
So, if you love the home, but they’re hesitant to offer the full asking price, you should guide them to keep what’s most important in mind—the fact that they love the house. And you should understand that if you’re not willing to pay the full asking price on the home, there’s most likely another buyer out there who is.
13. Factor in Some Repair Costs After Closing
We’ve all had those clients who simply insist that every little thing is completely finished when they move into a house. But honestly, even a brand-new construction home won’t have everything you want. Be prepared for a little spending once you move in. There will inevitably be a few things that need to be addressed after closing.
When you’re doing the final walk-through, and they start picking out things that aren’t completely finished, it’s a great idea to ask them, “Is it important enough for you to not close on the house?” Keeping things in perspective will help a lot when it comes to managing these expectations for your clients.
14. Be Ready to Make a Decision
The real estate market these past few years have really forced buyers to be ready to make a decision more quickly than in the past. But as the market cools, buyers who hesitate on making that commitment. Be ready to say, “Let’s make an offer,” when they see a house they love.
When you start to back-pedal and say things like, “Well, let’s keep looking,” just know that’s their fear coming through. Take a moment and then ask yourself, “If you found your soulmate, would you keep dating?” Sometimes just a little perspective is all they need to see what the next move should be.
15. Bid Competitively
This goes back to the negotiations—don’t try to outsmart the sellers, especially if they love the house. Long gone are the days of the buyer’s market where there are several more options for buyers. Today we are living in a seller’s market, and the sellers have most of the control. If you love the house, then you should make an offer that reflects that.
16. Keep Contingencies to a Minimum
Ah, contingencies! We love them, don’t we? Try to alleviate as many contingencies as possible before putting any offers in.
A contingency could cause your offer not to be accepted. Try to resolve as many contingencies as possible. Our house hunting checklist will help you broach this topic early on in your homebuying process.
17. No House Will Ever Be Perfect
The perfect house is a myth. There is no such thing. It’s a unicorn. Remember the three-sided triangle? . And here’s a 8/10 rule: If the perfect house is a 10 and doesn’t exist, then if you can find a house that is an eight on that same scale, that’s probably going to be the house for you.
No house will have all the features and amenities they want. The questions to ask your buyers are, “What are you willing to accept? What are you willing to concede?”
For example, assume the house they’re considering has the perfect kitchen, but it doesn’t have a covered patio. Both of those things were on their list, but one is more important than the other.
Encourage your clients to go back to their priority list and decide what is a “must have” vs a “like to have” based on what they chose upfront as what is most important.
18. It’s Normal to Second-Guess Your Decision
This happens to practically every single homebuyer—even if they absolutely LOVE their new home, they second-guess their decision. It’s actually more fear of making a bad decision than real buyer’s remorse. They will fear they’ve made a mistake. It’s natural with such a large transaction. And buying a home is a huge step for anyone to take.
19. Don’t Forget Why You Wanted to Buy a Home
With all the craziness in a real estate transaction, it’s easy for you to get caught up in the frenzy and forget the reason they started the process in the first place. But if you go back to your initial interview with your agent, you probably asked them some questions that will help you in these moments.
Recall the reasons you shared with your agent in the initial conversation around WHY you wanted to buy a home. They most likely have dreams—start a family, build a business, generate familial wealth, be near better schools for their kids, open more opportunities, etc.
In many of these situations, a conversation with your clients is all it takes to give them a little encouragement and courage to keep moving forward. They’re counting on you to get them to the finish line. Be their biggest supporter and coach.