Resolving to buy a home in 2011? Resolve now to do it right

Many people start the new year with resolutions about losing weight, starting a new physical fitness routine, or getting their financial house in order. How many of you are making resolutions about buying a home?

All resolutions are only achievable if you start with realistic expectations. The resolution's goal may be very short-term (think … I will finish mailing my Christmas cards by January 15) or longer-term (think … I will fit into my old high school dress in time for the reunion). The experts agree there are two keys to success in achieving your goals. First, commit the goal to paper. Second, tell a friend who will hold you accountable for progress toward the goal. The same keys are critical to achieving success when resolving to purchase a new home.

Buying a new home doesn't just happen. Most homebuyers spend considerable time, effort, and thought when searching for their next house to call "home." Buying your next house is not as simple as going to the store and buying a loaf of bread. You can't see through the wrapper, you don't know how the house is going to fit your lifestyle or budget and, until you talk to a lender, you don't even know what kind, style, or size of home you can afford. Like all resolutions, buying a house requires commitment and effort.

For 2011, it's more important than ever to have a homebuying plan. In the last month or so, interest rates on home loans have gone up about one-half point. That means that the $150,000, 4% fixed-rate, 30-year home loan you might have secured in November will cost about $50 more per month in January just to pay the extra one-half percent interest on the loan. You'll have to pay an extra $600 a year to live in the exact same house. And, you will need about $1,500 additional income each year just to qualify for the home loan. Most financial gurus are predicting mortgage interest rates will rise in the foreseeable future. Even if the price of your dream home does not go up, the monthly payment could rise dramatically if the gurus are right and interest rates continue to rise.

Without a strong commitment to your house-buying resolution, you could miss out on the home of your dreams or the "buy of the year." It's about as easy to begin a diet tomorrow, as it is to begin your home search tomorrow. There's always an excuse to put off starting something important; that piece of pie looks tasty and the diet will just have to wait. The same is true with a house purchase. You buy the new shoes, get the new car, or spend extra money on a nice dinner out. The next thing you know, the month is gone, the year is gone, the money is gone, and you are no closer to homeownership.

So, how do you make a commitment to buying a home? First, follow the expert advice and commit your plans to paper. Don't just make a mental note about buying a house, actually write down your goal: "I will buy a house in 2011." Once you write your goal, take the time to write down exactly what items are important to you about your next home. Do you want three bedrooms or four? It's important to have a yard (big or small), or perhaps you want "country property" on one or more acres? What is more important, a gourmet kitchen or a large family room for entertaining? How far are you willing to commute to work? If you have children, is it important that the home be located in a specific school district? As you begin thinking about your next home, many more "wants" for your next house will come to mind.

The next step in the resolution process is to tell a friend. I recommend when committing to purchasing a house that you don't tell just any friend but rather, tell a knowledgeable friend. Tell someone who knows the "ins & outs" of the homebuying process. Tell someone who has first-hand experience with the entire process – what houses are for sale, how home financing works, what to expect from a home inspector, the meaning of title insurance, what did other houses in the neighborhood sell for? I strongly recommend the friend you select to help you keep your resolution and achieve your goal of homebuying be a Texas REALTOR®.

A Texas REALTOR®, under state law and the National Association of REALTORS® Code of Ethics, is obligated to look out for your best interests. The term REALTOR® has come to connote competency, fairness, and high integrity, resulting from adherence to a lofty ideal of moral conduct in business relations. When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly.

As a Texas REALTOR®, I would be glad to help you keep your resolution to purchase a house in 2011.