25 Tips For Buying A House: How To Close On The Right Property

The process of buying a house is complicated. Pondering the qualities of your dream home, navigating the financial implications, searching, buying, and moving in is a long journey. Oh, not to mention selling the house you currently live in if you’re not a first-time homebuyer. 

You may already have an understanding of the core process: Getting pre-approved for a loan, finding a real estate agent, searching, offering, inspecting, closing, and moving.  However, understanding what essential tips you need to know about as you get into the intricacies of each of those steps, is critical. 

Many people like to make a buying a house checklist when they begin the process. If you’ve done that already, here are some great tips to add. If not, no worries. The information you will find here can help you get started.

Starting from when your new home is just a twinkle in your eye and ending with the thrill of moving into your dream home, here are 25 tips to make sure your experience is as successful as it can be.

1. Finances First

Almost everyone, especially first-time homebuyers, jumps on their favorite house-hunting website to start their home search. Of course they do; it’s fun! Scrolling through pictures, imagining the improvements you’d make to each house, and envisioning your family spending time together in each room is entertaining. 

Unfortunately, the not-so-fun activity of putting a budget together should mark the beginning of your home-buying journey. In the end, this will make the home searching part even more fun because you won’t get excited about homes you can’t afford. You might even realize you can afford more than you thought you could!

Start by finding a mortgage lender you trust and having them explain the preapproval process to you. This process will include pulling a credit report to determine your credit score and getting critical financial information, including your income, debt, bank statements, retirement savings, financial goals, and much more. A complete understanding of your overall financial health is critical to determine if you are ready to make a home purchase. In addition, it helps determine how much you can afford. 

The lender will give you a letter indicating that you are preapproved for a mortgage loan that includes the highest amount you can pay for your new home. They will also give you an estimate of your monthly mortgage payments and how much mortgage you can afford, including the down payment and closing costs. The preapproval letter will be critical later in the home search process when you are ready to make an offer. 

One big tip here is understanding that what you can afford and what you are comfortable spending are not the same. Don’t stretch your budget to the max and end up with a house you can’t afford to maintain or a monthly budget that is maxed out after making your monthly mortgage payment.

The good news is that there are many loan options mortgage lenders can make available to you for buying a home. Conventional loans, federal housing administration loans (FHA loans), VA loans (for veteran military service members), USDA loans (for people in rural areas), and jumbo loans (for high-priced houses) are just a few of the options.  

Once you and your real estate agent find the right house, it’s time to make an offer. Now your lender can get you some specific numbers on your loan. First, they will help you with the final selection of your loan type (conventional loan, FHA, etc.). 

Next, they will calculate your down payment and monthly payment. This will include things like:

The home’s purchase price isn’t completely set yet but knowing your offer amount creates a clearer financial picture. The best tip to remember here is that coordination between your real estate agent, your lender, and you is critical.

The closing process involves a lot of players, including your real estate agent, the title company, the seller, the seller’s agent, and your mortgage broker. By now, your lender has gone over your closing costs, so there shouldn’t be any surprises. Pay close attention during the days leading up to the closing, as your lender may need some final numbers to make sure they can have the loan funds sent to the title company on time.

2. Pick The Right Realtor®

While it’s not impossible to buy a home without a realtor®, you should think twice before going that route, especially if you are a first-time buyer. Real estate professionals go through intense education and certification to become licensed real estate agents. Their profession is set up this way because managing a real estate transaction is a complicated process best left in the hands of a qualified professional. 

A realtor® is a real estate professional who has gone a step further by training on the guiding principles and code of ethics enforced by the National Association of Realtors®. If you want the highest chance for success on your home purchase, hire a realtor®.

Picking the right realtor® is a critical early step in the home buying process.  Interview a few different ones, and don't just pick someone because you know them. You wouldn't do that when hiring someone at work, so why do it when hiring your realtor®?

Many people think all real estate agents are the same, so they don't put much time into this process. Don’t make that mistake. Find an agent with a clear understanding of the real estate market and a track record of helping their clients save money and time. This is especially important in a competitive market, where there are a lot of other buyers trying to get the same home.

Your agent needs to understand the local market, move quickly, and have a high level of professionalism. This will allow them to make sure you get your dream home, even when many different buyers want the same house. Quiz potential agents upfront and check their references to make sure they will deliver when the time comes.

3. Know The Difference Between What You Want And What You Need

It’s hard not to start your search looking for your perfect dream home. Perusing listings of castles and mansions can be fun. Envisioning yourself in an infinity pool that overlooks the ocean is even more fun. It’s hard to resist this type of unrealistic dream shopping, but zeroing on the house that meets your needs as well as your budget will set you up for success.

If you were shopping for a car that would fit you and your three kids, you wouldn’t start at the Ferrari dealership with an unreasonable budget in mind. Home searching is no different.

Think about it in terms of things you must have compared to the things that are just nice to have. If you work from home, then an office might be a critical component of your new home. If you have a lot of kids, your bedroom count might be a minimum of 4. 

If you don't spend much time at home and live alone, perhaps a large amount of square footage isn't necessary. If you don’t mind a long commute to work, maybe your house doesn't need to be very close to the office. 

If you love hot tubs but can live without one, that would go on the nice-to-have list. A stable would be on the must-have list if you have horses and need a place to keep them. 

Talk to your real estate agent and lender at the beginning about what you need and what you want. Your lender will be able to help you determine if you can afford it, and your agent will know exactly what to look for when searching for your new house.

4. Make Sure You Are A Serious Buyer

Searching online to look at homes for sale has become a favorite pastime for many Americans. According to the National Association of Realtors®, 90% of home buyers used online searching as part of their home buying hunt. However, sometimes it’s not part of the actual home-buying process and just a fun way to kill time.  

If you are genuinely interested in making a move, online searching is a great way to hone in on that perfect home. If you are just doing it for fun and have no intention of buying, employing a realtor, lender, and all the other real estate professionals involved is a waste of their time and yours. 

Be honest with yourself and others about your intentions. Searching for the fun of it is fine; just don’t pretend to be a serious buyer if you are not.

5. Make Your Offer Stand Out Above The Rest

A seller’s real estate market is one where inventory is low, demand is high, and buyers are paying well over the asking price for homes. 2021 has been a strong seller’s market. According to First Tuesday Journal, 75% of people think 2021 is a good time to sell a house, and 20% think it’s not.

In a seller’s market, many homes listed for sale garner multiple offers over the asking price. So, understanding a few tips and tricks to get your offer to the top of the pile is critical.

Most of the time, the offer that gets accepted is the one with the highest purchase price. The trick is knowing the price of other offers and beating them without paying more than you need to. Sometimes your real estate agent can get hints from the listing agent, but you usually don’t know the exact amount to get the deal done. To solve this, consider an escalation clause, which indicates you will pay a specific price and then raise that price a certain amount over any other verified offer.

When many offers have the same financial benefits, sometimes the people selling the house will choose based on personal factors. Writing a personal letter to the seller can be an excellent way to move your offer above the rest. 

Let them know why you love the house and how you envision using it. Always keep the tone positive and full of compliments for how they have taken care of the house. Don't point out any deficiencies in the house and don't mention any negotiations related to price. Leave that to your realtor®.

6. Don’t Pass On The Inspection

The strong seller’s market has prompted some buyers to bypass the inspection process altogether. This makes their offer more appealing because the seller doesn't have to worry about things being found in the inspection that will lower the price. If you are a buyer making an offer on a home, don't do this. 

The home inspection contingency is a critical safeguard for buyers, ensuring they don’t buy a home with severe safety defects. Skipping this process because you think you’ve found your dream home and don't want to miss out on it can end in a nightmare.

7. Over Communicate

With any large project that involves many people, communication is critical. Talk to your real estate agent daily about how the search is going. New properties come on the market many times a day, and you don’t want to miss one that might be right for you. 

When your lender asks for financial information during the preapproval process, respond as soon as you can. Delaying the creation of your pre-approval letter might mean you won’t have it when you are ready to make an offer on a house. 

The home inspector you hire will send you a report once the inspection is complete, and it is essential to review this with your real estate agent immediately. Most contracts have a time limit for you to request any inspection-related items fixed, and you don't want to let it expire

8. Trust Your Team

When buying a home, the first team you work with is your family or whomever else you will be living with. Talking with them about your shared needs and goals related to the home buying process will set the path forward. 

The next group of people who become your team is your real estate agent, lender, and other specialized professionals. Remember that they are the experts, not you, so trust them to give you the best possible advice

9. Place Yourself In The Seller’s Shoes

Real estate transactions can become adversarial by their nature. Buyers want the lowest price and sellers want the highest, for example. This can create conflict -  sometimes, so much conflict, that it can blow up the deal altogether. 

Always keep your best interests in mind, but think about what will make the seller happy as well. Successful real estate deals are all about compromise, and the best way to achieve that is to put yourself in the seller’s shoes from time to time.

10. DIY Or Don’t

Fixer-uppers (homes that need some work) can be an excellent opportunity to increase the market value of your home instantly. For example, if you buy a home with an outdated kitchen and take the time to update it, the value of the home rises. 

If you can make home improvements without hiring professionals, you will save money on labor costs. Even if you hire people to do these projects, the increase in home value will often outweigh the costs. Be sure to know your limits, though, as you don't want to bite off more than you can chew.

11. Location Location Location

It's easy to get excited about the inside finishes or curb appeal of a home and forget about where it’s situated. Don't make this mistake. Think about what type of area you want to live in the right at the start of the home buying process. 

If you have visions of sitting on the front porch gazing at a scenic view, country living might be the way to go. If you get energized by the hustle and bustle of a city, look for places downtown. 

Think about the type of neighborhood you imagine living in. Is it full of mature trees and old, unique houses? Or do you prefer a subdivision with lots of green grass and houses that all look the same? If you choose the latter, don't forget to look into the homeowners association fees that often accompany subdivision homes before making an offer.

Don't forget to measure the distance from work and school if you don't like a long commute. The perfect house isn't so perfect if it’s in a location where you don't want to live.

12. Be Budget Conscious 

Many people find out how expensive a house they can afford from a lender and use that amount to drive their home search. This is a mistake. 

Calculate all of your living expenses, income, and money in your savings account while keeping in mind that you always want to have an emergency fund if something unexpected happens. 

Once you see what you can afford, it’s time to start the search, taking all of that into account. In addition, once you get preapproved for a loan, stay financially responsible all the way to the closing. Things like big purchases or loss of income can result in your loan getting denied, which blows up the deal.

13. Don't Overlook Maintenance Costs

Most homebuyers focus on the price of the house and what their monthly payment will be once their mortgage, taxes, insurance, and utilities are added up. This is a good starting point for monthly costs, but there’s more. 

Owning a home means that when something goes wrong, you can't call the landlord to fix it for free. Set aside some funds (1 percent of the total home cost per year is a reasonable estimate) for maintenance and repairs. If you are buying an older home, set aside more.

14. Keep Emotion Out Of It

Buying a home can be an emotional journey full of hope, disappointment, and thrilling accomplishments. It’s such an important decision because you decide where you and your family will spend most of your time together. However, don't get caught getting swept up in the emotional side of it. 

In the end, buying a home is a transaction filled with negotiation, strategy, and the need for firm resolve. When you start making decisions with your heart instead of your head, you will start making mistakes that can be costly. This can include overpaying for a home you fall in love with or missing out on one that turned you off just from the pictures.

15. Research The Real Estate Market

Talk to your real estate agent about home prices in the areas you want to live to get a sense of the market value for the homes you are considering. If it’s a hot market for sellers like 2021 has been so far, this means you should consider higher offers. 

If it’s a buyer’s market where there are deals to be had, you may be able to come in under the asking price. Either way, don't get tunnel vision and look just at the specific homes that interest you. Educate yourself on the entire local real estate market.

16. Consider A Small  House

Don’t make the mistake of thinking big is always better. Think about what amount of square footage is necessary for you and your family to live comfortably. Sure, a 6,000 square foot mansion may seem appealing, but maybe a 3,000 square foot house is plenty big for your needs. Perhaps it’s nearly half the cost as well, leaving you with some extra cash to spend on other things. 

You may even want to consider tiny homes or container homes. These have grown in popularity recently, and the prices are tens of thousands instead of hundreds of thousands. 

If you have a big family, a tiny home might not work. If you live alone or with one other person and travel a lot, leaving your house empty much of the time, a tiny home might be perfect. 

Remember that a bigger house means larger maintenance and utility costs as well. The initial price tag is only the beginning of the financial strain buying a house that’s too big entails.

17. Get Second And Third Opinions

When you look at a home, don't just rely on your impression of it. Think about what your partner and kids think, and then take it a step further. Parents, friends, coworkers, and other people in your life may offer perspectives you didn't consider. The more different people who look at the home you consider buying, the more insights you will get.

18. Consider The Season

Buying a home isn't the same process year-round, especially in areas that have four distinct seasons. The spring real estate market tends to be hot, with lots of potential buyers out there competing with you for homes. In the winter, there are fewer buyers competing, but also fewer homes for sale. Talk to your real estate agent about seasonal fluctuations in your local market so you can get a sense of the best time to buy.

19. Safety First

Pretty counters, a lavish pool, and a cozy fireplace are easy to notice when you tour a home. Safety issues usually aren't so apparent. Make sure you have your inspector focus on looking for things like mold, asbestos, and defects that will lead to significant repair costs. If you find something like this, prioritize them over nice finishes and fancy furniture.

20. Be A Nosey Neighbor

No one knows a neighborhood better than the people who live in it. When you go to a house showing, see if there are any people who live close by out and about. If they are, strike up a conversation to get a sense of the area you might be living in. 

People know a lot about the other people they live close to. Beyond just what’s going on in the neighborhood, they may even have specific details about the house you are considering buying. When it comes to researching a home, getting every bit of information available helps you make the most informed decision possible.

21. Know What You Don't Know

Understanding your expertise and those on your home search team is integral to a successful home purchase. Many people think they know real estate, lending, and the other aspects of buying a home well enough to do it themselves. This usually ends poorly.

Even if you have a good understanding of the process, professionals who do it every day will know more. Stay as informed as you can, but trust the experts regarding strategy and advising on big decisions

22. Look To The Future

It’s easy to get caught up in the moment during your home purchase, but try to do some forward-thinking. How long do you see yourself living in the house? If it’s five years or more, the likelihood of getting an excellent return on your investment through appreciation is high. If you are thinking about being there for less time, home improvements are the only way to ensure the value increases. 

Think about how the area you are going to live in might change in the future as well. Are there developments that could occur around your house, like new homes or businesses being built? What are the population trends in the area? By looking to the future, you can ensure you will be happy in your new home for years to come.

23. Question Everything

Buying a house is something where you shouldn’t just go along for the ride. Trust the experts, but make sure you question their advice, so you have a good understanding of why they are giving it. When you are looking at a home, be critical. You don't want to let little things prevent you from purchasing a home, but you do want to know every little thing before buying.

Many people searching for homes fall in love with a house before seeing it in person after looking at the pictures online. Don't make the mistake of making up your mind too early. Review everything about the house  -, from the attic to the asking price - before heading to the closing table.

24. Trust Your Gut

If something doesn't feel right, it probably isn't. Sometimes a successful home purchase comes down to trusting your feelings. When you first walk into a house, think about how it makes you feel. Can you envision yourself living there? Can you see your family being happy there?

The square footage, number of bedrooms, and asking price can only tell you so much about a house. Sometimes it simply comes down to a gut feeling when you are in the home. Trust it.

25. Be Ready To Walk

When you make an offer on a home, it’s an exciting feeling. You start to envision your new life there and where you will put all your furniture and other items that will make the new house your home. 

Don't get swept up in this feeling, as it may make it hard for you to walk away, even if it's the right move. For example, if the inspector finds safety issues that the seller won't fix or give you money to fix, it’s probably a good idea to walk away. 

Always remember that there are other houses out there that can make you happy; maybe even more satisfied than the one you are currently trying to purchase. If the deal goes sour, you have to be willing to walk away and start your search anew.