Buying a home is exciting but it’s important to balance your dream home features with your budget. A well-thought-out homebuying wish list helps prioritize needs vs. wants while staying financially responsible. This guide will help you create a wish list that aligns your budget and lifestyle.
Parts of a homebuying wish list
The following are the separate parts of a homebuying wish list.
Start with your budget: How much can you afford?
The first step is getting pre-approved for a mortgage. If you aren’t sure how, we have a complete guide on how to get pre-approved for a mortgage. Reach out to a few mortgage lenders and they’ll give you a list of documents you’ll need to provide so they can decide how much money they’d give you to buy a house.
This is important to do before house hunting because most sellers won’t negotiate with you without a pre-approval letter from your lender. Without one, they don’t know if you have the means to afford their property. One important caveat – just because you were pre-approved for a certain amount, that doesn’t mean that’s what you can afford. Ask your lender what the mortgage payment on the full amount would be and see if you could slot that into your monthly budget.
It’s also important to understand your total home costs. That means your mortgage payment, property taxes, homeowner’s association fees (if applicable), insurance, and maintenance costs. Property taxes are public record. So, if you’re seriously considering buying a home you can go to the county’s property tax website – this is Polk County’s – and get the official property tax billing statements for the property.
If you already have homeowner’s insurance or renter’s insurance, you can get a quote on your new prospective home from your agent. As for maintenance costs, these vary a bit but the rule of thumb is “The 1% Rule.” It says to take one percent of the total purchase price of your home and set it aside for regular maintenance and repairs. So, for a $300,000 home, this would equate to $3,000 annually or $250 per month.
Identify must-haves vs. nice-to-haves
Now that you have a good idea of what you can afford it’s time to identify what you have to have in a new home and what would be nice to have but not required.
Often, these are things that fall into the must-have category for homebuyers:
- Number of bedrooms and bathrooms
- Location
- Home size and layout
- Essential features such as a garage, yard, or disabled accessibility
- Price
These are things that are usually in the nice-to-have category:
- Extra living spaces (bonus room)
- High-end kitchen finishes or appliances
- Smart home features
- Outdoor amenities (pool or deck)
Be honest with yourself on what amenities belong in which category. You don’t want to walk away from a home that would better suit your family simply because it doesn’t have one of the nice-to-haves that you could save up for only to purchase a home that already has one for a higher price tag that lacks elsewhere.
Research market prices and set realistic expectations
When you have an idea regarding your must-haves compare recently sold home prices in the area you’re shopping in. You can check public records at the county assessor’s office, search real estate websites like Zillow, Realtor.com, and Trulia, or consult with a local real estate agent.
It’s also important to understand the market conditions. Is it a buyer’s or seller’s market? To determine the market, look at the balance between supply (available homes) and demand (potential buyers). A seller’s market has high demand and low supply while a buyer’s market has high supply and low demand. If you notice homes are getting multiple offers and are selling quickly that’s an indicator of a seller’s market.
If you notice homes that match your needs/wants are significantly outside your price range and you can’t wait for a better buyer’s market, you may need to adjust your homebuying wish list.
Finalizing your homebuying wish list
Now that you have all the components of your homebuying wish list, rank your wish list items from most important to least important. This will help you be open to trade-offs that are bound to come up. Lots of times, we don’t find the exact home we picture in our minds. However, there is a home that balances your budget, location, and features on your homebuying wish list.
Now that you have your wish list, reach out to one of our experienced real estate agents who have helped people just like you find their new home in the Bolivar, MO and Southwest Missouri area!
