Buying a home is a big financial (and life!) step, and if you've never done it before, it can feel overwhelming. Diving straight into the murky waters of mortgage rates and median home prices can be scary, so doing a few little steps can help you rack up some easy wins and put you in a positive homebuyer headspace. Here are four super simple tasks that you can easily check off your list.
Note: If you're not sure you're quite ready to buy yet, you can still walk through these steps. It'll be good practice, and you'll feel more confident about the process when the time comes.
1. Check your credit score
There are many things you'll need to do financially to prepare to buy a house, but this is the most basic first step. Any bank you approach for a mortgage loan is going to pull your credit report to see how much they're willing to lend you, so you should know what they're going to see on it. The Federal Trade Commission ensures that all Americans are entitled to a free credit report every 12 months from each of the three major credit bureaus (they're Experian, TransUnion, and Equifax). You'll want to look at all of them, since they can have variations. Annualcreditreport.com is the authorized site recommended by the FTC.
2. Pick one real estate listing service and sign up for alerts
Just one—not four, not forty. Don't overwhelm yourself or your inbox. Plus, the vast majority of homes for sale are part of the MLS (Multiple Listing Service) database, which is used by nearly every listings site, so you'd just be getting repeats anyway.
Even if you're not ready to pony up a down payment on The One, this is still a useful step. You're seeing what's out there and getting a feel for your local market, so it's best to not be too specific in your search query. Be a little loose with your price range or search radius, for example, and don't check off too many features as must-haves. Plus, looking at houses is the fun part! Have some fun.
Zillow, Estately, Trulia, Realtor.com all will send you new listing emails, or you can sign up with a local real estate office's website. There are also several real estate apps, if that's more your style.
3. Take a class
While there's a wealth of information about buying a home available online, taking a class helps you realize what you don't know you don't know. After all, you can't Google a question you haven't thought of.
Nonprofit Homeownership.org offers a HUD-approved online class about the finances of home buying. It can also be helpful to go local, since each real estate market has its specific quirks. Many local agents and brokerages will host these sort of first timer classes, or you can check with your state's housing authority or even your local library for more general options. For example, here are several seminars happening in the next few weeks in the Chicago area, a NYC event at Cooper & Cooper this Saturday February 4, and one that's taking place in different cities all over Massachusetts.
4. Brush up on the lingo
This should be covered (at least partially) if you decide to take a class (see #3). But just like any industry, real estate has its own vocabulary. Knowing the terms will boost your confidence that you can talk the talk and (eventually) walk the walk. This can range from the euphemisms that agents use in listings, to more technical stuff like different mortgage types. Take it slow, and remember that it's okay to ask for explanations and clarification!
More questions about home buying? We have some answers.