Is contacting a Real Estate Agent really the first step? Or a Lender? Just today I saw a social media post from a first-time homebuyer looking for a Realtor who would then typically refer them right over to a lender who should ask them a series of important questions they may not know the answer to. It might surprise you to learn that neither of these are really the correct first step. The very first step to buying or selling a house should be getting your financial house in order. What does that mean?

Honestly this is some basic Economics 101 as well as financial literacy, but I think most of us realize this is missing from our education by no fault of our own, it's just not as available as would be ideal. So then where do you begin if you don't know where? Begin with asking yourself (and/or your partner if buying or selling together) these few questions:

What is our budget? Taking a look at all fixed monthly expenses along with variables and luxury spending, what does our monthly budget look like? What can we change or eliminate?

What can we afford? After looking at our budget, what is a monthly payment that we can afford or are comfortable with?
Should just pay cash? Is buying with cash the smartest way to use our money, or is there other options?

How much savings do we have and what can we add to it each month while we house shop? Buying and selling a home is typically never a net zero cost, so making sure there are some savings to start it necessary.

What are our short- and long-term plans for a home? Determine the most likely and least likely plans for the time in the home with regards to keeping forever, becoming a rental, job moves, outgrowing, etc.

What happens if we list and get a contract on our home and then find out we cannot get approved or afford our next home?

These are all critical thoughts to work through LONG before you speak to a Realtor. Be Smart, Be Wise… get your financial house in order FIRST! One you have thought through the answers to some of these questions, you need a Mortgage Advisor to help you with any missing pieces as well as to understand the exact next steps and in what order. This is not the same as punching in order like information into a computer. This is a loan options consultation, so if you are not offered this first… maybe seek another option. You likely won't have all the answers right away, but each one of these thought-provoking questions will get you that much closer to the clarity and options you are seeking to understand.