No surprises here: What to expect when buying a home

Quick insights

Buying a home is an exciting prospect with lessons to uncover along the way. Before kicking off your homebuying journey, it’s a good idea to educate and strategize in advance. Knowing what might come up along the way and whether the current market will work in your favor will prepare you for the exciting journey ahead.

Things to consider before buying

Knowing the current market

Understanding whether it’s a buyer or seller’s market is helpful knowledge to have while house hunting. A buyer’s market is when there are more houses for sale than there are buyers. A seller’s market is when there are more buyers than there are houses for sale.

In a buyer’s market, sellers are competing against one another. In a seller’s market, there is more competition amongst the buyers, meaning the seller will likely have an upper hand in negotiations. In a buyer’s market, you may have a chance at negotiating a better deal with the seller.

The time of year

Consider the season you are buying in. Warm summer months usually have more homes for sale but typically have more people looking to buy. Just like the weather, the market tends to cool down during the winter. This means there are less houses but also less buyers, so more room for bargaining from a buyer perspective. Overall, it's important to consider your advantages and disadvantages in the market you plan to buy or sell.

Interest rates

Interest rates and broader economic conditions can also influence your homebuying journey. For example, periods of higher inflation are often associated with higher interest rates, while lower inflation may coincide with lower rates. These market conditions can affect your monthly mortgage payment and may influence the type of home loan you decide to explore.

Depending on your financial goals and market conditions, you might compare an adjustable-rate mortgage (ARM) with a fixed-rate mortgage. An ARM usually offers a fixed interest rate for an initial period before the rate adjusts periodically based on market conditions. A fixed-rate mortgage keeps the same interest rate for the life of the loan, providing predictable monthly principal and interest payments. 

Expect to take an honest look at your finances

Figure out how much you can afford. Some suggest buying a place below budget, so you have cushion money for other homeowner expenses that come up along the way. If you buy below budget, you can also afford a bigger down payment which may help you avoid higher interest rates.

Finding a lender

Find a lender that works best for you. You may do this on your own, or you may be interested in hiring a mortgage broker to assist you. A mortgage broker acts as the middleman between you and a lender. Their job is to find you a loan and interest rate that works best for you. Mortgage brokers assist with the application process. Once they help you find a lender, they collect the necessary documents and submit them for approval. Keep in mind that not all lenders work with mortgage brokers.

Most sellers prefer a prequalified or preapproved buyer, so you'll be one step ahead of the game. Getting prequalified helps avoid any hiccups along the way that put you in danger of losing the deal. Please note that Chase does not offer mortgage prequalification, only mortgage preapproval.

Dealing with the back and forth

Expect a decent amount of back and forth between you, the buyer, and the seller. That's often the name of the game during the homebuying journey.

Before submitting your final offer, take a second look at your budget. Make sure you’ve considered closing costs, any impending home repairs and other financial responsibilities that may arise during closing.

Once you feel confident, you will make a good-faith deposit. This deposit will put the house in escrow, meaning it will be taken off the market. This is when the lender-required appraisal takes place. This is also a great time to have the home inspected. If all goes well and neither you nor the seller backs out for any extenuating circumstances, you can close and have the title officially transferred to you. Closing can happen very fast or it can take a bit of time depending on who you’re dealing with.

Did I make the right decision?

If you’ve taken the time to research your options, understand your finances and make decisions that align with your goals, you’re more likely to feel confident in your homebuying journey. There is no one-size-fits-all approach to buying a home, and some factors may be outside of your control. You may need to compare mortgage options longer than expected, negotiate with a seller or address unexpected findings during a home inspection. Staying informed, flexible and focused on what’s best for your situation can help you navigate the process with confidence.