House Hunting Tips and Shopping Guide

By Bill Lyons | Published on October 3, 2023

Finding a new home to purchase is a monumental step in anyone’s life. Anticipation, excitement, and a little bit of stress come together to help you find your perfect home. Each home has its own story, charm, and potential pitfalls.

House hunting is more than just finding a place to rest after a long day of work; it’s about discovering a home where you’ll build memories, share experiences, and possibly grow your family. As thrilling as the hunt can be, it also comes with challenges ranging from financial decisions to logistics.

Equipping yourself with the right resources is crucial. Keep reading to learn how to start looking for a house with our house hunting tips.

How to Prepare for House Hunting

Whether you’re looking for your first home or transitioning to a new space, house hunting is a thrilling journey. However, it’s also a significant investment that demands careful planning and preparation.

Entering the real estate market unprepared can lead to overspending or ending up with a property that doesn’t fit your needs. So before browsing listings online and attending open houses, you should lay the groundwork to ensure you’re equipped for the hunt ahead. Use these tips to learn how to house hunt.

Make a budget

Establishing a budget is one of the most crucial steps in the home buying process. Budgeting isn’t merely about knowing how much you can afford to spend; it’s about understanding how a mortgage translates into your monthly financial commitments.

You can make a budget by reviewing your monthly income and expenses. Account for all costs, including groceries, utilities, transportation, and existing debts like credit cards and student loans. Once you have a clear picture of your monthly spending, you can subtract these costs from your income to determine how much you can comfortably afford to spend on a mortgage.

Next, factor in the additional costs associated with homeownership that might not be immediately evident. These include property taxes, homeowners insurance, and maintenance expenses. Many experts suggest that your housing costs, including the mortgage, taxes, and insurance, shouldn’t exceed 20% of your monthly gross income. Remember, there is a difference between what you can buy and what you should buy.

Start saving for a down payment

A down payment is your initial investment in your future home and a significant element of the home buying process. Generally, the larger the down payment, the better the loan terms and the less you’ll pay in interest over the life of your loan.

While the traditional recommendation is to save up for a 20% down payment, many lenders offer options for lower down payment options. However, putting down less than 20% on some traditional mortgages often means you’ll be required to pay for private mortgage insurance (PMI), which is an additional monthly cost.

You can save for a down payment by setting a goal based on your budget and average home prices where you want to live. Create a dedicated savings account for this purpose, and consistently contribute to it based on your income versus expenses. You can even automate your savings by redirecting a certain percentage of each direct deposit directly to your dedicated savings account. To save faster, you can cut unnecessary expenses, find additional sources of income, or invest wisely.

Get pre-approved for a mortgage

Once you’ve saved for your down payment, get pre-approved for a mortgage before you begin house hunting. Mortgage pre-approval is a process where a lender assesses your financial health and determines how much they’d be willing to lend you at that point in time. Having a mortgage pre-approval letter in hand provides you with more clarity on your budget by helping you narrow down your choices and focus on properties within your price range.

Additionally, a pre-approval gives you more negotiation power. Sellers often prefer buyers who have pre-approval since it signals serious intent to purchase and the capability to close the deal.

Another benefit of getting pre-approved is a faster closing process. Since lenders have already evaluated your financials, they can streamline the closing process, allowing you to move into your new home sooner.

You’ll need to provide your lender with financial documents for mortgage pre-approval, such as pay stubs, tax returns, bank statements, and information about your debts. Keep in mind that pre-approval is not a guarantee of a loan, and these letters expire within 60 to 90 days.

How to Start Looking for a House

Once you’re financially prepared, the actual house hunting process can begin. But before you start browsing online listings, consider defining your criteria by listing your must-haves, nice-to-haves, and deal breakers. Think about the number of bedrooms, type of property, proximity to essential amenities, and other personal preferences. Here are a few house hunting tips to help you:

Work with a real estate agent

The expertise of a real estate agent can be invaluable for first-time buyers. These agents provide expert guidance and insights into the local real estate market, inform you about specific neighborhoods, and help you identify potential homes within your budget and criteria.

They also possess negotiation skills that can help you secure the best deal to ensure you neither overpay or miss the opportunity due to underbidding. Plus, they have access to listings others don’t. While many homes are listed publicly, some sellers list their properties privately. Real estate agents can provide you with access to these exclusive listings, broadening your options.

Look up homes online

Looking up homes online can help you determine what type of homes and features are within your budget before you attend open houses. Websites and apps provide access to thousands of listings, allowing you to explore homes across different neighborhoods, price ranges, and styles. In addition, many listings now include virtual tours, which can give you a comprehensive view of a property without needing to visit it in person.

Keep in mind that while these platforms are helpful tools, they should not replace physical open houses. Virtual tours can’t always capture the feel of a home or the ambiance of a neighborhood. However, they can help you discover available homes in your area.

Schedule tours and attend open houses

While online listings can provide preliminary insight into potential homes, there’s no substitute for experiencing a property in person. Setting up tours and attending open houses can offer new perspectives to help you determine if a house aligns with your criteria. If you’re working with a real estate agent, they can set up tours and schedule open houses based on your schedule.

If you plan to schedule tours and attend open houses on your own when house hunting, consider scheduling in advance. You can contact the listing agent or your real estate agent to schedule a private tour to get a more personalized experience and provide yourself with enough time to assess the property.

You can also attend weekend open houses where anyone can drop by and view the property. These are convenient opportunities to see multiple homes within a few days.

Before heading out for these open houses, consider preparing a checklist of essential features you’re looking for in a home. This can help you evaluate each property against your specific criteria and ensure you don’t get swayed by the looks of the property alone.

In addition to the specific properties you view, you should consider the neighborhood. The house itself is just one part of the equation. You’ll want to consider other aspects, such as noise levels, proximity to amenities like freeways, traffic patterns, and the overall feel of the neighborhood.

Another consideration is to stay open-minded. While having a list of preferences can help you find a home that’s functional for you, it’s important to stay flexible. A property might not tick every box, but it could still have a unique charm or potential that resonates with you.

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6 House Hunting Tips

The process of house hunting can be exciting and overwhelming. It’s more than just scanning pictures online; it’s about envisioning your future life, understanding neighborhoods, and foreseeing potential challenges to make the best long-term decision. To streamline this process and increase the odds of finding your dream home, consider these essential house hunting tips:

Make a list of must-haves and deal-breakers

Having a list of must-haves and deal-breakers can help you determine your priorities. Make a list of all the features you want in a home and number them based on priority level. For instance, a certain number of bedrooms might have a priority level of 1, while a pool has a priority level of 5. If you’re purchasing a home with a partner, family, or friends, ensure everyone is involved in creating the list to ensure their concerns and desires are addressed.

Don’t forget to include your long-term needs. For instance, if you plan on expanding your family or starting a home-based business, factor these into your list. You might need an additional bedroom for a child or a space for a dedicated home office.

Unfortunately, getting everything you want in a home is rare, so it’s important to be realistic and flexible with your priority levels. Market conditions and budget constraints might need you to make adjustments.

Compare real estate agents

Real estate agents vary as widely as the properties they sell. They come from diverse backgrounds, possess distinct skill sets, and offer varied perspectives. To ensure a smooth and efficient home-buying process, it’s essential to find the right real estate agent for you.

You can compare real estate agents by investing in their track record. Consider factors like how long they’ve been in business and their achievements. An agent with a solid track record might be better equipped to find a home in your area that suits your needs.

Agents may also have specializations. Some excel in luxury listings, while others specialize in suburban homes. You can find a real estate agent based on the type of home you’re looking for who can set expectations with you and help you find the best listings.

Another important trait is communication skills. A good real estate agent should keep the lines of communication open. You should feel comfortable talking to them and asking questions. You should also be able to expect timely and transparent responses. But beyond the basic professional qualifications, ensure your personalities mesh well. Trust, mutual respect, and understanding are crucial for a successful partnership when house hunting.

Don’t be afraid to ask for a consultation or interview before making your final decision. Discussing your needs and expectations can help you and the agent determine whether the partnership is a good fit.

Make location a priority

House hunting isn’t just about finding a home with aesthetic appeal. You may stumble upon a gorgeous home within budget, but if it takes you hours to get to work or it’s in a neighborhood that doesn’t resonate with your lifestyle, the allure of that home may fade over time. Instead, assess the area where the home is located, including factors like safety, commute times, and available amenities.

You can also visit the neighborhood at different times of the day to get a more genuine feel. While many aspects of the home itself can be changed, the neighborhood can’t. Prioritizing location ensures your dream home doesn’t turn into a nightmare.

Separate cosmetic issues from serious problems

When touring potential homes, it’s easy to get swayed by aesthetics or deterred by superficial flaws. Disliking the wallpaper in the living room or tiles in the bathroom shouldn’t sway your opinion too much because these things can be fixed. However, foundational cracks, sagging roofs, and persistent plumbing issues signal deeper, more expensive troubles. Being able to distinguish between cosmetic issues and serious problems can prevent future headaches and unforeseen expenses.

As you walk through the property, remember to focus on the bones of the house rather than the current decor or adornments. Understand that while aesthetics can be updated or changed, serious issues can impact the safety of the home.

Engaging professionals like home inspectors can provide an unbiased evaluation to help identify potential hidden challenges.

Inquire about additional costs

The asking price of the home isn’t the only cost associated with it. Hidden beneath that initial cost are various other expenses that can significantly affect your monthly costs. Before finalizing the deal of a property, get a comprehensive understanding of its additional costs.

You can ask the current owner about their average utility costs, including water, electricity, and gas. You can also investigate if the area requires specific insurance like flood or fire insurance. Is the property part of a homeowner’s association (HOA)? If so, those fees should be factored into your budget.

Being informed about the additional costs ensures you’re financially prepared and helps in the decision-making process to ensure owning a particular home is sustainable long-term.

Look into foreclosure and short sales

Foreclosures and short sales can present unique opportunities for home buyers. A foreclosure occurs when a homeowner can’t make their mortgage payments, leading the bank to take ownership of the property. On the other hand, a short sale happens when the homeowner sells the property for less than their outstanding mortgage balance with the lender’s approval.

Both of these scenarios offer homes at below-market prices. However, there are more complexities involved when purchasing one of these homes. For instance, these properties may require extensive repairs, and the purchasing process can be lengthier and more unpredictable.

3 Things Not to Do When Looking for a House

House hunting is as much about what you should do as what you shouldn’t. While it’s easy to get caught up in the excitement of finding a new home, certain pitfalls can distract you from your purpose or lead to regret later on. Here are three things to avoid when looking for a house:

Don’t seek out perfection

Everyone has an idea of their dream house, but it may not exist. While it’s natural to have an ideal image in your head, adhering to that image can set you up for disappointment when shopping for a home. No home will tick every single box on your wishlist, which is why it’s so important to prioritize.

With a little work or compromise, your new home could end up being even better than the house you envisioned in your mind. Instead of seeking out perfection, focus on the home’s potential. Of course, that doesn’t mean you have to buy a fixer-upper. Instead, being open to slight variations can lead you to a home with unique qualities and charm you hadn’t even considered.

Remember, a house isn’t just made of four walls and a roof; the memories you build and what you do with the house matter most. The minor imperfections or deviations from your original dream could be the elements that give your home its unique character.

This flexibility can also be financially advantageous. Being open to homes that might need more work allows you to find properties below market value and customize the home to your liking.

Don’t get too invested in a home

If you find a home you love, it’s easy to get emotionally invested and start envisioning your life there. However, getting too emotionally invested in a property before finalizing the deal can set you up for heartbreak.

Unfortunately, there are many steps between finding a house and making an offer and getting it. Negotiations, inspections, and securing financing can affect your ability to close the deal, and, in the end, you might be forced to walk away. By balancing your emotions, you protect yourself from the stress of house hunting and remain open to other opportunities.

At the same time, falling in love with a house means potentially overlooking major red flags and rushing into deals. This emotional attachment can lead to hasty decisions, where the urgency to seal the deal overshadows the importance of due diligence. For instance, if the property has major structural damage uncovered during the appraisal or home inspection, you might still offer to pay the full asking price, leaving you with a hefty out-of-pocket expense once you move in.

Don’t house hunt before getting pre-approved

While it may be tempting to start browsing online listings as soon as you decide to move, you should never underestimate the power of a mortgage pre-approval, whether you’re applying for a conventional or Non-QM loan. Remember, the pre-approval provides you with a clear picture of your financial standing, giving you a realistic idea of what you can afford and where you stand in the eyes of lenders.

Beginning your search without a pre-approval can set you up to fail. For instance, you might find a house you love only to realize it’s out of your reach financially, leading to heartbreak and, at the very least, wasted time.

Moreover, in competitive markets, being pre-approved gives you a significant advantage. Sellers are more inclined to accept offers from pre-approved buyers because they demonstrate financial readiness and a genuine interest in this property. In some cases, a pre-approval letter may be the deciding factor for sellers comparing multiple offers.

Get Pre-Approved With a Qualified Lender

Getting pre-approved is a testament to your readiness and seriousness as a buyer. It clarifies your budget and strengthens your position in negotiations while accelerating the closing process. Unfortunately, not all lenders are created equal.

Partner with Griffin Funding for a customer-centric approach to mortgage lending, where your financial needs and goals are prioritized. With our dedicated team, we guarantee a seamless and transparent lending experience from start to finish. Get pre-approved for a mortgage today to start house hunting.

Bill Lyons

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.