Being purposeful with your purchases is something I discussed in my last blog post, which can be found here.

When making a purchase, I ask myself – “Will this improve my life, or the lives of people I care about?” Not every purchase will fall into the “yes” category, but this question helps me create intentionality behind my purchases. And before you ask, yes, the entire box set of Seinfeld does qualify as a “life improver”, especially during stressful times like the ones we are currently experiencing.

A purposeful approach to daily spending can also be translated to larger, one-time purchases as well. In the case of this post, we are going to discuss a purposeful approach to buying a home.

Running the Numbers

Purchasing a home may be the largest (long-term) financial commitment some people make in their lives, so you want to get it right. The first step is to determine if it makes financial sense to buy.

The conventional wisdom that buying makes more financial sense when compared to renting isn’t always as clear cut as it seems. There are so many factors (both financial and otherwise) that go into the decision.

The New York Times published an excellent “Rent vs. Buy” calculator that helps to account for those factors so you can determine if buying is right for your situation. It can be found here. This is a good place to start but be sure to think through all aspects of your personal financial situation when determining if buying is right for you.

Assess the Situation

So, you’ve used the tool and determined that it makes sense for you to buy. Congratulations! Although it may make financial sense, there are other factors to consider before breaking out your checkbook.

Overall Satisfaction – Are you happy with your current living situation? Do you have the capacity to engage in the activities you enjoy?

Yard Work – Do you enjoy mowing the lawn, weeding, planting, raking, and all the other joys of yard work? If you don’t, are you willing to pay someone to do it for you?

Home Maintenance – Do you have the desire for the upkeep that goes along with buying a home? This includes replacing appliances, potentially dealing with field mice before calling the exterminator and fixing that leaky faucet (among other things). Can you afford the expense of hiring a professional when you can’t handle the job?

Education is Key

At the risk of sounding theatrical – buying a home can be complicated and confusing, so it is natural to feel anxious; however, that anxiety can be lessened through educating yourself on the home buying process. 

With education on the subject, you will be able to set proper expectations for yourself and perhaps find some appreciation and joy related to the process of house hunting. After all, you are taking a step to put down roots and put time and effort into something that can be uniquely yours. These are reasons to get excited!

A Checklist

Below you will find a checklist of items needed to have a “seat at the table” when preparing to shop for a home. This isn’t a complete list by any means, but it will get you pointed in the right direction…

• A pre-approval letter – this is a letter from a mortgage lender that outlines how much home you can afford and shows sellers that you are serious about the homebuying process. A pre-approval letter can be obtained quickly if you have all the required financial information. Some examples of things you’ll need are: W2s, tax returns, and statements for any bank and investment accounts.
• A 20% down payment and extra money for closing costs and fees.
• If you don’t have 20% as a first time home buyer, understanding the different types of loans available is very important.
• A Realtor who knows the area and with whom you feel comfortable – make sure to interview them beforehand! 
• An estimate of additional costs that come with home ownership.
• A list of “non-negotiables” that must be present in your new home.

Let’s Go Shopping!

Now that you have your checklist of pre-requisite items for shopping, search for some open houses in your area. If you are new to the home buying process, or haven’t purchased a home in a while, a list of questions to ask when touring a home will only get you so far.

If you can spare the time, tour some properties that you know you wouldn’t want to buy to get a feel for things. After a few walk throughs, you will be surprised at how quickly a mental checklist develops. A few practice runs can help alleviate some of the stress and may allow you to be more mindful of the houses you choose to see in the future.

Once you’re feeling comfortable, work with your real estate agent to find some houses that are true contenders. As you do the walk-through, consider taking pictures or video so you can refer to them later. During the tour, be sure to ask yourself – Does this place feel like home? How much work will I have to put in to create a space I enjoy? What are the limitations that can’t be fixed without serious renovations? Am I willing to look past these until we can save up enough to make changes?

Be a Good Neighbor

These considerations aren’t just exclusive to your future home, but your potential neighborhood as well. After you tour the property, walk around, and take notice of the homes in the area. Are the facades well maintained? Do people seem friendly?

If you are looking in a smaller town, walk into the local police station and ask about crime in the area. If there is a main road with shops and restaurants, pick a spot that looks like it has been there a while and grab some lunch. While you’re there, ask to talk to the owner. As an integral part of the community, owners of established local businesses will be able to paint you a great picture of the community you are considering joining and how it has changed over time.

Slow Down

Talk to anyone that has purchased a home recently and they will tell you the same thing – once you find the one you want, the process can move very quickly. Taking things at your own pace and doing some prep work beforehand can save you a great deal of headache in the end.

As said before – this is a huge financial decision, so take it slow. Create some intentionality in your own process before making an offer. After all, the housing market isn’t like Amazon – there are no free returns.

Thanks for reading and be well.