So, you’re out house shopping and you’re trying to figure out how to know if you’re ready to make an offer on a house or not.
How do you know if you’re ready to make an offer? Well, there’s really four things that you need to consider.
One, have you really looked at your buying power? The interest rates have been a roller coaster over the last few years. You may have talked to a lender a few years ago but it’s really important that you know what your buying power is today, at this point in time. So you want to talk to a lender and actually have them run current numbers. They can do this for you based on different scenarios without actually running your credit. And this is a conversation you should have before you even go out house shopping, before you spend too much time swiping online to keep your expectations in line with your buying power.
The next thing you need to do with that lender is actually get an approval letter. This is generally a pre-approval. But what is happening right now to make you more competitive in a multiple offer situation is that people get a full underwritten approval. It’s important that if you’re an independent contractor or maybe a 1099, you need to have that lender run your different sources of income to make sure you’ve got the number right. If you have a W-2 and you’ve been in your job a long time, the lender is gonna be able to get you an approval a little bit easier, so the pre-approval is a little bit more appropriate there.
The next thing that you want to do is make sure you’re really, really clear on the location that you want. And this can be a wide area if that works for you. I have a lot of clients right now that are looking everywhere from, say, LaGrange to Naperville because they really want to be in the Western Suburbs, but they’re not sure which town or they maybe don’t care what town because they’re all great. But you really want to make sure that the things that are important in a location are very clear in your mind. Because what you don’t want to have happen is you write an offer on a place because you fell in love with the house and then you realize later that it’s not actually the location that you want. At that point, you’ve wasted money on a home inspection or maybe have some buyer’s remorse later.
And along with the location, think about what your other must haves are. And this might only be a couple of things. But if you really, really wanna have a basement, make sure that the houses you are looking at have a basement. You don’t need to look at it without one..
Once you’re clear on those four things, you just need to find the place that meets your criteria and you will be ready to make an offer.