Homebuying 9 Things Realtors Wish Homebuyers Knew

Thinking of buying a home? Stop, drop and scroll through this list of tips first.

By Deidre Huntington
PUBLISHED 01/20/2023 | 8

Homeownership is the main source of wealth for Americans. 

This has been true for a long time but, as a result of the COVID-19 pandemic (with increased demand, low supply, low mortgage rates and intense bidding wars), housing wealth is reaching new records for sellers and owners. 

The profit on a typical home sale in 2021 increased 45% from the profit in 2020 and 71% from pre-pandemic profits, according to national property database ATTOM. By the end of 2021, about 42% of homeowners were equity-rich—i.e., their mortgages were less than half their home’s value.

So, yes, it’s safe to say that buying a home is a lucrative investment. But it can be a challenging process to navigate. That’s why we turned to the experts for the top nine things they wish people knew before and during the home-buying journey.  

1. Know the difference between getting prequalified and preapproved. Realty experts agree that both are smart moves for potential homebuyers—so you should absolutely understand what they mean and what they entail. Shaun Martin, CEO of the Home Buying Company, explains that prequalification is when a lender gives you an estimate of what you could qualify for based on your financial situation, and that preapproval is when you apply for a loan and are approved to receive a specific amount.

2. There are certain things you should avoid doing after being preapproved for a mortgage. Once you’ve applied for a mortgage, it’s important not to make any large purchases, apply for credit cards, miss card or loan payments, or switch jobs. “Doing so could jeopardize or delay your final mortgage approval,” says Linda Shaw, an agent with 1st Class Real Estate in Georgia. Why? Lenders will be monitoring anything that could affect your bottom line, change your debt-to-income ratio and alter your mortgage qualification status. “If doing any of these things is unavoidable, talk to your loan officer first,” Shaw adds.

3. Finding the right partner is key. You want to find an agent who not only knows the market but also understands your financial situation, goals and needs. “Take the time to find someone you can trust and someone who is easy to communicate with,” says Stacia Welborn, a broker/agent at RE/MAX Essential in Wilmington, N.C. Referrals from friends, family, neighbors or coworkers can be a great place to start. 

4. Financial help is available. Buying a home is expensive, but fortunately, resources abound—especially for first-time homebuyers. “A lot of people don’t realize that they may be eligible for grants and assistance programs,” says Eyal Pasternak, a real estate investor and founder of Liberty House Buying Group. To make homeownership more accessible, the federal government offers a range of options, and lenders are increasingly offering their own programs (like zero-down mortgages, down payments grants and down payment assistance mortgages) to help certain communities pay for a down payment on a home.

When Kate Kandefer first entered the homebuying market, she admits she was a little skittish, especially when it came to finding the right real estate agent. “I had this attitude that realtors were out to take advantage of me,” she says. But when she found her dream home, she realized just how wrong she was. “My realtor went out of her way to make sure I got a good deal and was satisfied with my decision. She explained that it doesn’t make sense for real estate agents to sabotage their clients because so much of their business comes from word of mouth.”

5. Don’t be fooled by the window dressing. In other words, “Beware of ‘lipstick on a pig,’” says Welborn. “A house may look great on the outside, but it’s important to do some digging about the property and to ask certain questions, like the age and condition of the HVAC system, water heater and major appliances.” What’s the neighborhood like? Is the area susceptible to flooding? How much can you expect to pay on monthly utilities? Why is the seller leaving? Get these answers and more before making an offer. 

6. Invest in a professional home inspection. Sure, it can be tempting to save a few dollars and have your contractor uncle look at your new home instead of getting a real inspection. But Shaw says getting a professional on the job is worth every penny. “Not only are they trained to spot any issues, but they can also point out important elements of your home, such as where the fuse box is and how to turn off the main water line,” Shaw says. Plus, once you have their official report, the results could give you more negotiation power.

7. Understand escrow. There are many terms in the home-buying process that sound like gibberish—and “escrow” is one of them. “Escrow is when you give money to a third party (usually the title company or real estate agent) and they hold onto it until the sale is finalized,” Martin says. “This protects both the buyer and seller from any potential fraud.”

8. Negotiations aren’t just for the price. Most homebuyers focus on the asking price when it comes to negotiating, but Pasternak advises broadening your sights. “Focusing on the terms of the sale can give you more flexibility,” he says. “For example, you can negotiate for outdated fixtures to be deducted from the price.”

9. Be prepared for closing costs. Many people concentrate on saving up for the down payment and then are caught off guard by the closing costs. Theresa Raymond, cofounder of TN Smoky Mtn Realty in Sevierville, TN, explains that closing costs can include agency and broker fees, escrow transactions, and legal and inspection costs, all of which can add up fast. So be prepared and set aside a chunk of money to cover these costs as well.

Millie content is licensed from Dotdash Meredith, publisher of Millie, Real Simple, InStyle, Investopedia, The Balance and more.

Deidre Huntington is a writer and digital nomad who also runs her own strategic communications business. She is currently based in the Washington, DC-area and is passionate about women finding their own path to joy and success.


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