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How to Pick the Right Home and the Right Price Range

April 2, 2013
Mortgages
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

In pursuit of that dream home, some buyers get fixed on the “right” home, only to find that, by the time they have all their ducks in a row, the property’s been sold.

In general, these people worry “themselves out of buying the right home,” says Richard Schulman, a Los Angeles-area realtor. “They over evaluate homes, and miss out on buying. In this market, home buyers miss the right home, and then see prices go up 10%, and can’t ever get that right home back. In many cases, they will end up never buying a home.“

Know what standards you should have for the “right” home and what steps you need to take to ensure you get it.

Nail two birds with one stone: Meet the Agent and the House

When you enter the homebuying market, you’ll need a couple things to get started: some idea of what homes you’re interested in and a guide for the entire transaction.

You can take care of both in one fell swoop: go to an open house, check out the home – although you don’t want to get too attached in a recovering market – and interview the realtor while you’re at it: decide if this person can do right by you.

As you formulate some questions for that interview, keep in mind what makes a good agent.

“A good Realtor becomes a friend to the buyers as they support them in all facets of this transition. What we do should be far more then show them houses and help them close” – their responsibility isn’t limited to the transaction itself, says Kerry Stricker, a realtor in Rogers, Arkansas.

It’s ensuring you transition into homeownership and residency with as much comfort as possible. That includes helping you set up utilities, obtain repairs, contract for updates and enroll in schools, she says.

As you do interview some real estate agents with this criteria in mind, as yourself: Does this person fit the bill?

Nailing the price range

Needless to say, perhaps the most important part of the home-buying process – more important than picking the home itself – is settling on a price range.

The greatest measure of your price range will be the mortgage for which you qualify. That number can make or break life for the next 10 to 20 years – however long the term of that mortgage is.

When you do get an idea of your future mortgage, with that qualification, know how to use that number to arrive at a healthy price.

The obvious first step: “Do not over-extend your budget just because it is a ‘fabulous dream home,’” says Alisa Baker, a realtor in Grove, Oklahoma. In fact, you may want to do the opposite: shoot low.

“I always try to get my first time home buyers the house that meets their needs at a price as far below what they qualify for as possible,” Stricker says.

Those prices may be daunting – they’re likely at least 6 figures – but don’t be frightened

“Look at buying your first home as an investment.  A property that you could re-sale in the future when you start to have a family without losing money,” says Sue Vosen, a realtor and associate broker in Ooltewah, TN.

A home isn’t just an investment for the feeling of stability you’ll get with your very own home; a home and the mortgage that comes with it is also an opportunity to build equity, to build something of value that could pay real dividends down the line. 

Good luck on the hunt!