Homebuyer’s Guide

10 Things You Need to Know Before Buying Your Dream Home


1. Do Some Research

Sounds obvious right? But, so many buyers go into the buying a home blind. Although there are many professionals that will help you along the way; you will only help yourself if you do a little research before and during your home buying process.

What kind of research?

• Research home styles (ranch, colonial, bi-level, etc.)
• Community amenities
• What you might like or dislike in your next home
• School districts
• Neighborhood features
• Different activities in the neighborhoods
• Distance a community is from family or your job

2. Know What You Are Looking For

After you do some research, make 3 lists…

List 1: What you HAVE to have
This is everything you cannot live without. For example, if you have 3 children you might HAVE to have a 4-bedroom home.

List 2: What you would LOVE to have
These things are not necessarily a deal breaker but, would be nice to have. For example, an in-ground pool or a finished basement.

List 3: What you DO NOT want
This means if a home has anything of these features, you will not purchase the home. For example, right next to the freeway or maybe it has a pool and you do not want a pool.

Having these lists will not only make your life easier, but it will allow your real estate agent to show you the homes that best fit your wants and needs. Even the most experienced real estate agents are not mind readers; show them and tell them what you want so they can help you find the perfect home.

3. Money on Hand Needed to Buy

There is more to buying a home than just the purchase price. Closing Costs, Inspections, Appraisal, Moving Fees, Homeowners Association, Homeowners Insurance, and other fees are often a surprise to unprepared buyers. Even if you are paying cash for a home versus using financing there will be costs. Prepare by having money on hand for the following:

Closing Costs – Closing costs depend on the terms of your purchase, the state and area you live in, etc. The closing costs will also include lender fees and proration of property taxes. The title company will prepare the documents as provided from the lender and the purchase agreement. The title company will make sure the title is free and clear of all liens, order a survey of the property, record the new deed, and more.

Down Payment – Depending on the type of loan you are pre-approved for will depend on the amount of money you will need for your required loan down payment.

Inspections – After your offer is accepted, typically you have a negotiated inspection period where you can inspect the property for any potential repairs needed. You can decide if you want a general home inspection, radon test, or any other inspection. After the general home inspection, you might have a specialist inspect specific elements that need further investigation such as the foundation, etc. Inspections can run you $275 and up, depending on what inspections you have done and your location. We highly recommend you have a home inspection before purchasing any property!

Moving Fees – Make sure you factor in expenses for a moving truck, taking off work, hiring painters or getting new carpet. Give yourself an estimated budget and plan to save that chunk of money for your moving expenses.

Homeowners Association – If the home you are purchasing has a Homeowners Association, make sure you know what the fees are and if they yearly or monthly? Your lender will require this information.

Homeowners Insurance – This is obtained before closing, but it is an expense you need to have on your list. Talk to your insurance agent and get quotes from several companies to find the best fit for you.

*There may be other costs to purchasing your next home, talk to a real estate professional or lender to get the details!

4. Start Saving for a Move-In Fund

Okay, you have found the perfect home and it’s time to start decorating! But you just spent a good chunk of your savings on your down payment, inspections, closings costs, celebrating at an expensive restaurant and you don’t have much money left. Don’t let this be you! Make sure you budget and save money to help you with decorating expenses and potential unexpected things that could happen after moving in.

5. Get a Loan Pre-Approval

Before you begin looking for a home, you need to get a pre-approval from a credible lender. This will put you in the best position when making an offer on a property. It will allow you to know what type of loan you are pre-approved for, your interest rate and what monies you will need. The lender will run your credit score and check your employment information to determine that you are pre-approved for a home loan. You will not be fully approved until a loan application is filed and processed.

This is your time to do some research to make sure that you choose the right lender  and loan for you.

6. Know Your Loan Options

Are you a first-time home buyer?
Do you want to get a loan that will help you rehab your next home?
Are you a resident fresh out of college, in debt with school loans?

Whatever your situation, make sure you know your options. When it comes to buying a home, hire a lender and a real estate agent who know how to help you with your unique situation.

There are many ongoing changes to the financial world that happen daily. Different lenders have different programs as well. We encourage the use of a local credible lender. Getting a referral is even better. There may be a first-time homebuyer loan program and sometimes special loans for specific occupations like a doctor loan.

*Contact a lender for details and restrictions.

7. Who Represents Who?

Anytime you start working with a real estate agent in Ohio they will present you with an agency relationship document called a “Consumer Guide”. This document explains what Buyer Representation, Seller Representation and Dual Agency. Make sure you understand these terms and how they affect you. Having a real estate agent representing you means they are looking out for your best interests and have a fiduciary duty to you and only you.

Note: Every state has different guidelines on Buyer Representation.

8. Foreclosures & Short Sales

When buying a home, you will likely come across a Foreclosure (Bank Owned, REO) or a Short Sale

Foreclosure – A home that is owned by the bank after the previous owner stopped making payments. These properties are typically listed at or under market value based on the selling price of other homes in the area and the condition of the home. Foreclosures do not take as long as short sales to close on. These homes are almost always sold at an ‘as-is’ condition. You can still have an inspection, but the bank will typically not make any repairs or take care of any city violations.

Short Sale – A home that is in or close to foreclosure, and the homeowner is trying to sell the home to a new owner for less than they owe on the property. This is where the term “short” sale comes from. Typically, a short sale can take up to 6-12 months to close. This is a long process because the homeowner is negotiating with the bank to take a loss on the property to avoid foreclosure. Not all banks will even consider a short sale option for the seller. Unfortunately, the bank does not usually advise if they will allow the short sale approval until a purchase agreement is submitted for consideration.

*Depending on the type of loan you have, you may have some limitations on buying a foreclosed home or short sale due to repairs or city point of sale requirements. Be sure to discuss with your lender and real estate agent if this is something you are considering.

9. Know the School Districts

A school district may or may not be important to you at your time of purchase. It could be an important resale point. You may want to take school district rankings into consideration when searching and purchasing your next home. Living in a great school district can make the area more appealing to more buyers. Living in an area with a low scoring school district may or may not deter buyers.

Real Estate agents are not permitted to provide opinions on neighborhoods. You can go to the Ohio Department of Education’s website, click here to get the most recent score and evaluations of every school district in the state.

10. Understand the Market Value

When it comes to purchasing a home, your real estate agent will help you determine the market value of the home. In other words, what the home is worth in today’s market. Market value is constantly changing. What your home is worth today may not be the same a year from now. You can see what the market value of a home is by pulling what is called a “comparable market analysis”. This is where the sale price of comparable homes is pulled and compared to the home of interest. This should be done by your real estate agent before you write an offer on a home. An appraiser will ultimately determine the value of the home if you are financing your purchase. It is the appraiser’s opinion of value on that given day in time.

Jody Finucan & Danielle Dooley, Great Lakes Home Team with KW Greater Cleveland Northeast

Jody Finucan & Danielle Dooley, Great Lakes Home Team with KW Greater Cleveland Northeast

We hope you found this information helpful! We are licensed in the state of Ohio and are happy to help you personally or if you are outside our area, we have a collaborated group of real estate professionals we can refer you to.

Jody Finucan (440) 221-6383

Danielle Dooley (440) 488-1893





Disclaimer: This information may not include all steps or costs in the process of buying a home. Much is dependent on the state you live in and type of loan you are preapproved for.