Whether you’re a first-time home buyer or a seasoned real estate investor, buying a home is a an exciting process. However, there’s also a lot to consider when you decide to buy. So before you begin your search for the perfect property, here are four questions you should ask yourself.

What do I want?
Take the time to figure out what type of property you want to buy.  If it’s a primary home:

– what location do I want?
– what type of home? Do you want a single-family home? A duplex? There are many different options on the market and it’s important to choose the type that best fits your needs.

– Figuring out the right neighborhood or the TYPE of lot you want to live in is equally important. While a property might have all of the amenities you’re looking for, factors like proximity to highways, ramps, restaurants and stores can impact your decision. A good idea is to list out and prioritize your needs (e.g. location, type of lot and style of home) before you begin your search.

What can I afford?

The rule of thumb is that you should never spend more than 30% of your monthly income on TOTAL mortgage payments. An alternate rule states that you can afford to buy properties that runs about two-and-a-half times your annual salary. For a more tailored look at what you can afford, use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.

Am I financially prepared?
IF you are planning to pay cash, is that cash in a liquid account? Or is it in stocks, bonds, a mutual fund, or an IRA that will need to be liquidatd? In an aggressive market, your cash will need to be in a checking or savings account for a seller to consider your offer seriously. IF you are planning to purchase with a new mortgage, a few months before you start searching for a home, review your credit history and make sure it is in good standing. Get copies of your credit report, ensure that it’s accurate, and fix any issues you discover. It’s likely that you’ll also want to get pre-approved for a home loan, which will put you in a better position to make a serious offer once you find the right property. Pre-approval from a lender is based on your credit history, debt, and income.

How do I make the best bid possible?

Do your research! Your opening bid should be based on the sales trends of similar homes in the area. So before making your opening bid, get online and review the listing prices of comparable properties. Then ask your Realtor about comparable sales. If comparable sold for less than the current asking price of the home you’re looking at, you can feel comfortable make a bid that’s slightly lower than what the seller is asking. If they’re selling HIGHER than past sales, you may want to be more aggressive in your offer.