The start of a new year is the perfect time to lay the groundwork for your future — and if homeownership is on your horizon, it’s time to make those New Year’s resolutions a reality. Whether you’re a first-time homebuyer or moving to a new place, there are key steps you can take in the early months of 2025 to prepare for a smooth and successful home buying journey. Here’s a guide to some crucial resolutions that will help you get ready to purchase your dream home.
1. Get Preapproved for a Mortgage & Figure Out What You Can Afford
Before you start browsing listings or fall in love with a property, it’s important to know exactly how much you can afford. Getting preapproved for a mortgage is one of the first things you should do in the new year. Here’s how to make it happen:
- Get Your Financial Documents in Order: Start by organizing your financial records. Lenders will typically ask for your last few pay stubs, W-2s, tax returns (including your 2024 filing), and bank statements. The earlier you can file your taxes for 2024, the faster you can get the documentation needed for pre-approval.
- Understand Your Monthly Payments: Take time to calculate what your monthly mortgage payments will be at different price points. Don’t forget to factor in property taxes, homeowner’s insurance, and any HOA fees that might be part of the deal. The lender you choose can help you with these calculations.
- Mind Your Debt-to-Income Ratio: Before buying a house, be cautious with your spending habits. Opening new credit cards or making large purchases could impact your debt-to-income ratio and affect your ability to qualify for the loan amount you want. This means now is the time to pay down any outstanding balances and avoid taking on new debts.
2. Choose a Realtor to Partner With
Finding the right realtor is crucial. A good agent will be your guide throughout the home buying process, from finding listings to negotiating contracts. As you think about your goals for the new year, make it a resolution to choose a real estate agent that fits your needs.
- Interview Multiple Realtors: Don’t just go with the first agent you meet. Interview a few realtors to get a sense of their approach and personality. It’s important to feel comfortable with your agent since you’ll be working closely together.
- Discuss Their Experience: Make sure your realtor has experience in the areas you are interested in and is familiar with the local market trends. Ask them to walk you through the home buying process, and check if they have any experience with the specific type of home you are looking for (e.g., single-family homes, condos, etc.).
- Check Online Reviews: In the digital age, online reviews are a valuable resource. Look at your potential realtor’s reviews on platforms like Google, Zillow, or their personal website. What prior clients say about their agent will give you good insight into what you can expect. Favorable reviews can give you confidence in your choice, while negative reviews might be a red flag.
3. Educate Yourself on Locations, Commutes, and Schools
One of the most important aspects of buying a home is finding the right location. Even if you have lived in a particular town or area for years, your priorities may have changed, or you may be considering a new neighborhood entirely. Take time this year to get educated on your options.
- Explore Neighborhoods: Look into different towns or neighborhoods that fit your lifestyle and budget. Consider factors like safety, amenities, and the overall feel of the area. A home that’s in a great neighborhood but far from your workplace might not be as ideal as one that’s closer but in a slightly less desirable area.
- Consider Commute Times: How long are you willing to commute each day? Start by exploring commuting options to work, schools, and local amenities. If you work from home or need to drive long distances, this can be a big factor in your decision-making process.
- Research School Systems: If you have children or plan on having a family in the future, researching school districts should be a priority. A good school system can add value to a home and influence your long-term decision. Your realtor can provide you with resources to better understand the schools in different areas.
4. Understand New Laws & Buyer’s Agreements
Homebuying isn’t just about finding a property and signing on the dotted line — there are legal and financial details you need to fully understand. Several new regulations in 2024 may impact the way you approach the process.
- New Buyer’s Agreement Laws: Some areas have implemented changes to the buyer’s agreement and how commissions are handled. In some cases, buyers may now be expected to contribute more toward their agent's commission, or the process for negotiating commissions may have shifted. Make sure you understand the details before entering into an agreement.
- Know Who Pays for What: Traditionally, the seller has covered the cost of the agent’s commission. However, this may not always be the case anymore. Clarify with your realtor early on who is responsible for paying agent commissions, closing costs, and other fees, so there are no surprises down the line.
5. Stay Organized & Keep Track of Deadlines
Throughout your home-buying journey, staying organized is essential. There will be plenty of paperwork, deadlines, and key steps along the way — from the home search to the inspection to closing. Create a timeline of events and keep all your documents in one place. Make sure you stay on top of everything from inspections to mortgage paperwork to loan approval.