Looking for the right home can be a daunting process for first time buyers and seasoned vets alike. From the style of the house to the type of appliances, there are countless factors that can go into such a big purchase. The following short checklist outlines the most important things you should think about when you’re on the hunt for a new home.

1. Define your budget:
It’s never fun to fall in love with a house that you can’t afford. Avoid the heartbreak by taking the time to analyze your financial situation before you begin the search. Start by reviewing your credit score, monitoring your debt and choosing an appropriate down payment. Meeting with a financial professional can help you get an accurate picture of your financial situation and the loans you are eligible for.

Looking at your debt-to-income ratio is one of the ways that creditors establish how qualified you are for a mortgage loan. Your debt-to-income ratio is determined by taking your monthly debt (think current mortgage payments, student loans, car loans, etc.) and divide them by your gross monthly income. Ideally, you want to keep that ratio at 43% or lower. According to the Federal Consumer Finance Protection Bureau, “studies of mortgage loans suggest that borrowers with a higher debt-to-income ratio are more likely to run into trouble making monthly payments. The 43 percent debt-to-income ratio is important because, in most cases, that is the highest ratio a borrower can have and still get a Qualified Mortgage.”

Don’t skip the down-payment analysis! A huge factor in getting the best mortgage rate relies on how much cash you are able to put down initially. The rule of thumb has been to put 20% down as a minimum. Anything below the 20% rule will usually require mortgage insurance and end up costing you more on the loan long term. Determining the right path for you will require you to analyze your own situation—your budget, timeframe and any other factors involved in figuring out your financial capacity to save and put money away for your new home.

2. Your Must-Have List:
Always search for homes that meet your “must-have” list. A must-have list encourages you to write out exactly what you need in a new home and will significantly aid in narrowing down the scope of your search, especially when searching with another person. This list will also foster communication on critical aspects of your new home that might not have been discussed previously, and help you identify requirements that may be in conflict with each other.

Focus your list on the high-level, pricey aspects of a home. Minor changes such as painting and smaller renovation projects can be worked on down the road, but changes that add up in time and money should be avoided (think kitchen remodels or adding another bathroom). Narrowing down your search to homes that don’t require major changes will help ensure you choose a home that is within your budget.

If you are struggling on where to start, think about what type of home you want to live in–Single Family or Townhome/Condo? How many bathrooms and bedrooms do you need? Do you want a fireplace or pool? What’s the minimum lot size you would be comfortable with and do you require a garage? What about air conditioning?

Keep your list short and sweet–try to keep your must-haves on the shorter side by focusing on major requirements and ranking them by importance. Prioritizing your list will help when it comes to decision-making time, as selecting a home will often require some flexibility. Your list will provide you with an easy way to determine which aspects you can compromise on and which are red flags telling you to move on.

Compromise can be hard, but don’t let small things completely take a home off of your short list. Remember, minor changes such as painting and smaller renovation projects can be worked on down the road, however, if there are a lot of these things the costs of those projects can add up. Focus on the minor modifications that you feel comfortable changing.

3. Location, Location, Location!
While the importance of location is often a no-brainer, the location of your potential new home serves multiple purposes. Location will impact your daily life and happiness as well as your home’s value down the road.

When looking at location in terms of resell value, you want to look at a multitude of things: school districts, crime stats, and the neighborhood & community. A little research can answer most of these questions, and this website offers Market Insider, a tool to give you details on all these factors and more! Besides looking at the current stats and trends, take this information and think about what the value of the area might be in 5 or 10 years when you potentially could resell your home.

Along with the resale value, analyze the location of a home from the perspective of your wellbeing and happiness. Things such as your daily commute, surrounding noise, and community will greatly shape your experience in the home.

Along with this checklist, seeking guidance from a professional is always a good idea! A realtor like me can offer a wide array of skills and expertise, from the showing of a home to the endless paperwork. You can count on me to guide you through the process and assist in your home buying decisions.

Finding the right home might not necessarily mean finding the “perfect” home, but rather, finding the right home for you to make your own. Hopefully this checklist provides you with a guide to start your journey towards the right home. When you’re ready to start looking, don’t hesitate to give me a call!

Real estate professionals get that consumers, by and large, ignore housing statistics and the market until they become involved in the purchase or sale of a home. It’s only natural then that what impacts the market is a bit of a mystery to many. What determines a buyers’ or sellers’ market? What factors influence home prices?

Of course the answers to these questions and more may be multi-faceted, but it’s important to pay attention to them if you hope to keep more of your money when it’s time to buy or sell real estate.

Believe it or not, even in what seems like the gloomiest of real estate markets, there will be a glimmer of light for some.

Pay Attention to Interest Rates

It certainly is no secret that obtaining a lower interest rate for a mortgage typically allows for a lower payment. Naturally then, low interest rates make home-buying an attractive venture—and, even whispers of a rate hike can spur folks to get out into the market.

For instance, by the end of 2015, the U.S. saw 5.26 million home sales, which was the most robust housing market since 2006. Lawrence Yun, chief economist for the National Association of REALTORS^® (NAR), attributed the robust market, in part, to the mere “prospect of higher mortgage rates in coming months.”

And, rise they did, throughout the following year. In fact, late in 2016, mortgage interest rates rose eight times in nine weeks, according to bankrate.com. Sounds rather gloomy until one recognizes that, post-hike, rates were still at historic lows.

The bottom line is that if you’re in the market for a home and interest rates decrease or remain attractively low, it’s time to get excited about the housing market.

The Economy

The current economy is a key factor affecting the real estate market. “Broadly speaking, when the economy is sluggish, so is real estate,” claims Joseph Nguyen at Investopedia. Rather than look at the glass half-full, however, we choose to take the opposite tack—when the economy is humming along, the housing market is at its most attractive.

When job growth is robust, consumer confidence rises and we’re more apt to spend money on high-ticket items, such as cars, appliances, vacations and, yes, homes.

Exciting Markets for Sellers

There’s an old saying in the real estate industry that counsels homeowners that the best time to sell a home is when you need to sell your home. Yes, we understand that isn’t very helpful. If you’re one of the fortunate who has no compelling reason to sell (such as a job offer in a different town or divorce), you have the luxury of choosing when to put the home on the market.

Get excited if real estate professionals mention the words “sellers’ market.” This is a period in which there are few homes for sale but buyer demand is high. During sellers’ markets prices typically increase rapidly and homes sell at or above list price.

One of the biggest mistakes we see in sellers’ markets is the homeowner who feels that the market itself will bring top dollar for the home, regardless of condition. Be aware that it’s the homes in good condition that sell the quickest and for the most amount of money. Regardless if market conditions favor sellers, if your home isn’t in move-in condition, it may be passed over by home buyers.

Buying a Home This Year?

A buyers’ market—when there is a large selection of homes for sale and few other buyers in the market—is a great time to purchase a home. Unlike a sellers’ market, prices aren’t rapidly escalating and you won’t be competing against a slew of other buyers. These markets are more relaxed so homebuyers can take their time deciding.

In a sellers’ market, however, it’s more important than ever to have all your ducks in a row before making an offer on a property. Ensure you know exactly how much you can spend and that you’ve obtained a preapproval letter from your lender. Make your offer stand out from others by keeping it lean and mean, with the shortest time periods for contingencies as possible. Finally, come in with your highest and best offer. A sellers’ market moves too quickly to assume the homeowner will negotiate over price.

While the type of market may determine when to jump in, as mentioned earlier, interest rates can also cause excitement in the housing market. Low rates and relaxed lending guidelines, such as we saw in 2015 and 2016, presented a prime opportunity for many would-be buyers who previously couldn’t afford to purchase.

Lower mortgage rates mean a lower monthly payment, which means you have more purchasing power, and that additional power can “mean the difference between buying a 2-bedroom home versus a 3-bedroom one; between buying a home with large closets versus small closets; and, between buying an upgraded home versus a dated one,” according to Dan Green at The Mortgage Reports.

Regardless of the media’s perception of the housing market, there is always a mix of good and bad news, depending on whether you are in the market to buy or to sell. Arm yourself with a professional real estate agent who can supply you with current and local market information (too often what you read in the news is stale and based on nationwide statistics), follow his or her advice and buying or selling a home in any market will be an exciting process.