What Should You Do Before Buying a Home in Kentucky?

Buying a home can be exciting.

It can also become unnecessarily stressful when buyers start looking at houses before they're prepared for everything that happens afterward.

That's why I don't think the home-buying process should begin with scrolling through listings.

It should begin with a plan.

Before we start scheduling showings, I want to understand what you're trying to accomplish, determine how you plan to purchase, establish realistic property criteria and explain what to expect once you find a home you want to pursue.

The goal isn't simply to find a house you like.

The goal is to help you make an informed real estate decision.

1. Start With Your Own Financial Picture

Before deciding what to buy, understand what you're comfortable spending.

That isn't necessarily the same as the maximum amount a lender may approve.

Your housing expenses can include more than principal and interest.

Depending on the property and financing, you may also have:

• Property taxes
• Homeowners insurance
• Mortgage insurance
• HOA or condominium fees
• Utilities
• Maintenance
• Repairs

Think about the payment and overall ownership costs that fit your financial plans before setting your search range.

2. Talk With a Lender Before Touring Homes

If you'll be financing the purchase, talk with a qualified mortgage professional early.

A lender can help you understand financing options based on your individual circumstances.

Depending on the loan program, the conversation may involve:

• Income documentation
• Employment history
• Credit
• Assets
• Debt obligations
• Down payment
• Estimated closing costs

Financing requirements vary by borrower, property and loan program.

Your lender, not your REALTOR®, should advise you about the mortgage products and qualification requirements available to you.

3. Understand the Difference Between Prequalification and Preapproval

You may hear both terms during the mortgage process.

The exact terminology and level of review can vary by lender.

A preliminary conversation may rely on information you provide, while a more extensive review may involve documentation and credit information.

Ask your lender exactly what has been reviewed and what remains subject to verification or underwriting.

A financing letter isn't a guarantee that a loan will ultimately close.

4. Choose Your REALTOR® Before You Need to Write an Offer

Waiting until you find a property to begin thinking about representation can create unnecessary pressure.

Talk with your real estate professional before you're ready to make an offer.

Discuss:

• Your property criteria
• Your preferred locations
• Your financing
• Your timing
• How showings will work
• How offers are prepared
• Agency and representation
• Compensation
• Communication expectations

You should understand the professional relationship before making transaction decisions.

5. Understand Buyer Representation

A real estate licensee's duties depend on the agency relationship and applicable agreements.

Before entering into an agency or representation agreement, review it carefully and ask questions about anything you don't understand.

Among other things, buyers should understand:

• Who the agent represents
• The scope of the relationship
• Compensation obligations
• The agreement's duration
• Any exclusivity provisions
• How the agreement can be terminated, if applicable

Real estate agreements create legal obligations. Questions requiring legal interpretation should be directed to a qualified attorney.

6. Decide What You Actually Need From the Property

A search becomes much more useful when we move beyond price, bedrooms and bathrooms.

Think about physical and location criteria such as:

• Approximate square footage
• Number of bedrooms and bathrooms
• Garage or parking requirements
• Basement preferences
• Lot size or acreage
• Home age
• One-story or multi-story layout
• Condominium, townhome or detached housing
• HOA considerations
• New construction or established housing
• Regular travel destinations
• Access to particular amenities

Then separate those criteria into:

• Must Have
• Would Like
• Doesn't Matter

That helps us search for properties instead of chasing every new listing.

7. Research Locations Using Objective Information

Location matters, but buyers should make their own decisions about which communities meet their needs.

As a REALTOR®, I can provide and help you locate objective information about properties and locations.

Depending on what matters to you, research may include:

• Property taxes
• Road access
• Public transportation
• Utilities
• Flood information
• Zoning and land use
• HOA information
• Distance to specific destinations
• Parks and recreation
• School district information

I don't rank communities or tell buyers where people like them should live.

My role is to help you obtain objective information so you can decide which properties and locations match your priorities.

8. Verify School Information Directly

If school information matters to your property search, use official sources.

School boundaries, assignments, enrollment procedures and programs can change.

Don't assume that the school closest to a property is necessarily the school associated with that address.

As a REALTOR®, I don't characterize schools or districts as good, bad, better or best.

I can help identify the applicable district and direct you to official resources where you can research current information.

9. Understand Property Taxes

Property taxes are an ongoing ownership expense and should be considered when evaluating a home.

The tax amount shown on a listing or public record may reflect the current owner's circumstances and should not automatically be treated as a prediction of your future tax bill.

Tax rates, assessments, exemptions and other factors can affect the amount owed.

Use the appropriate local property valuation administrator and taxing authorities when researching a particular property.

10. Understand HOA and Condominium Expenses

If you're considering property governed by an association, don't evaluate it based solely on the monthly or annual fee.

Review what the association is responsible for and what obligations remain with the owner.

Depending on the property, documents may address:

• Regular assessments
• Special assessments
• Insurance responsibilities
• Maintenance responsibilities
• Use restrictions
• Rental restrictions
• Parking
• Pets
• Common areas
• Association finances

Condominium ownership in particular can involve responsibilities that differ substantially from owning a detached home.

11. Don't Judge a Home Only by the Listing Photos

Professional photography is designed to present a property clearly and effectively.

It doesn't replace seeing the property yourself.

When touring, pay attention to:

• Room dimensions
• Layout
• Natural light
• Storage
• Exterior condition
• Lot characteristics
• Parking
• Visible maintenance issues
• Surrounding land uses

Photographs help you decide whether to investigate a property.

They shouldn't be the end of your investigation.

12. Look Beyond Cosmetic Features

Paint colors and decorating can be changed.

Other property characteristics may be substantially more difficult or expensive to change.

Pay attention to:

• Foundation and structure
• Roof
• HVAC systems
• Electrical systems
• Plumbing
• Windows
• Drainage
• Lot configuration
• Property access

You aren't expected to diagnose these systems yourself.

That's one reason inspections and qualified professionals can be important.

13. Understand the Seller's Disclosure

Many Kentucky residential transactions involve a Seller's Disclosure of Property Condition form, although exemptions and transaction-specific circumstances can apply.

Source: Kentucky Real Estate Commission

Read disclosures carefully.

Ask questions when something isn't clear.

A seller disclosure is based on the seller's knowledge and isn't a substitute for your own inspections and due diligence.

14. Decide What Inspections You Want

A general home inspection is common, but additional inspections or evaluations may be appropriate depending on the property.

Those might involve:

• Radon
• Termites or other wood-destroying insects
• Sewer or septic systems
• Well systems
• Chimneys
• Structural components
• Roofing
• HVAC
• Electrical systems
• Plumbing
• Environmental concerns

The appropriate inspections depend on the individual property and transaction.

Your REALTOR® can help you understand available options, while qualified inspectors and specialists should evaluate technical conditions.

15. Understand What an Appraisal Does

If you're financing the purchase, your lender may require an appraisal.

An appraisal and a home inspection serve different purposes.

An appraisal generally assists the lender in evaluating the property as collateral and developing an opinion of value.

A home inspection focuses on the property's condition.

An appraisal should not be treated as a substitute for an inspection.

16. Understand Earnest Money

Earnest money may be included with an offer as part of the buyer's contractual commitments.

The amount, holder, deadlines and circumstances affecting its disposition depend on the contract.

Don't assume earnest money is automatically refundable.

Read the contract carefully and ask questions before signing.

Legal questions about your contractual rights should be directed to a qualified attorney.

17. Understand Contingencies Before You Make an Offer

Real estate contracts can contain contingencies and deadlines related to matters such as:

• Financing
• Inspections
• Appraisal
• Sale of another property
• Other negotiated conditions

The presence, wording and effect of any contingency depend on the actual contract.

Don't waive protections simply because you believe doing so will make an offer more attractive without first understanding the consequences.

18. Look at More Than the Purchase Price

The highest price isn't the only term in an offer.

Depending on the transaction, negotiations may involve:

• Purchase price
• Financing terms
• Closing date
• Possession
• Seller concessions
• Personal property
• Inspection provisions
• Appraisal provisions
• Other contractual terms

An offer should be evaluated as a complete package.

19. Don't Make Major Financial Changes During the Loan Process

If you're obtaining a mortgage, your financial circumstances may continue to be reviewed before closing.

Before making significant financial changes, talk with your lender.

That includes decisions involving:

• New credit accounts
• Vehicle financing
• Large purchases
• Employment changes
• Moving significant amounts of money
• Large deposits

Your lender should tell you how a particular change could affect your financing.

20. Budget for More Than the Down Payment

Buyers may have expenses beyond the down payment.

Depending on the transaction, those can include:

• Closing costs
• Inspections
• Appraisal costs
• Insurance
• Prepaid expenses
• Moving expenses
• Immediate repairs or maintenance
• Association-related costs

Your lender and closing professionals can help you understand transaction-specific amounts.

21. Read Before You Sign

This sounds obvious, but real estate transactions involve a lot of documents.

Don't sign something simply because someone tells you it's standard.

Read it.

Ask questions.

Make sure you understand the business terms.

Your REALTOR® can explain real estate forms and transaction processes within the scope of their professional role. Questions requiring legal advice or interpretation should be directed to a qualified attorney.

Local Tips from a REALTOR®

Don't Start With Zillow

Online listings are useful.

But before spending hours looking at houses, understand your financing, property criteria and representation.

A more focused search saves time.

Tell Me What You Don't Want

Sometimes this is just as useful as telling me what you want.

If you don't want an HOA, don't want stairs, don't want a long driveway or don't want extensive renovations, tell me.

Those are objective property criteria that can improve the search.

Drive the Route

If location matters because of work, healthcare, shopping or another regular destination, drive the actual route at the time you'd normally travel.

Don't rely exclusively on mileage.

Don't Skip Due Diligence Because You Love the House

Finding a property you like shouldn't stop you from evaluating it carefully.

Review available disclosures.

Investigate the property.

Consider appropriate inspections.

Understand the contract.

Ask Questions Early

I would much rather answer twenty questions before you sign an offer than discover afterward that you misunderstood something important.

Questions are part of the process.

What Should You Do First?

If you're thinking about buying a home in Kentucky, don't begin by trying to identify the perfect property.

Begin by preparing yourself to recognize and evaluate the right property when it appears.

Understand your finances.

Talk with a lender if you're financing.

Choose your real estate professional.

Understand representation.

Define your property criteria.

Research locations objectively.

Then start looking at homes.

You'll be making decisions with much better information when you find a property you want to pursue.

Frequently Asked Questions About Buying a Home in Kentucky

What Should I Do First When Buying a Home in Kentucky?

Start by reviewing your finances, talking with a qualified lender if you'll be financing, selecting a real estate professional and establishing realistic property criteria.

Should I Get Preapproved Before Looking at Houses?

If you'll be financing the purchase, speaking with a lender before seriously touring properties can help you understand your financing options and establish an appropriate search range. Ask the lender exactly what level of financial review has been completed.

Do I Need a REALTOR® to Buy a Home?

Consumers can choose how they approach a real estate purchase, but a REALTOR® can provide professional representation, help locate and evaluate properties, prepare and negotiate offers, coordinate transaction activities and assist throughout the process according to the agreed agency relationship.

Do Buyers Sign Representation Agreements?

Depending on the circumstances and applicable requirements, buyers may enter into written agreements establishing representation, services and compensation. Review any agreement carefully before signing.

Should I Have a Home Inspection?

Inspections are an important due-diligence option. The inspections appropriate for a particular transaction depend on the property and circumstances. Buyers should understand their inspection rights and contractual deadlines before making decisions.

Is an Appraisal the Same as a Home Inspection?

No. An appraisal generally addresses value for lending purposes, while a home inspection evaluates property condition. One should not automatically be treated as a substitute for the other.

Is Earnest Money Refundable?

That depends on the contract and circumstances. Buyers should not assume earnest money is automatically refundable. Review the applicable contract and seek legal advice when necessary.

How Should I Research Schools When Buying a Home?

Identify the applicable public school district and verify current assignments, boundaries, enrollment procedures and programs directly through official district resources. A REALTOR® should not rank schools or steer buyers based on subjective school characterizations.

What Should I Look for During a Home Showing?

Look beyond decorating and examine layout, room dimensions, storage, visible condition, exterior features, lot characteristics, parking and the property's relationship to your regular destinations.

What Other Costs Should I Expect Besides the Down Payment?

Depending on the transaction, buyers may encounter closing costs, inspections, appraisal costs, insurance, prepaid expenses, moving costs, association expenses and immediate maintenance or repair expenses.

Can I Buy a Home With Acreage in Kentucky?

Yes. Buyers considering acreage should evaluate land characteristics, access, utilities, septic or sewer systems, easements, restrictions, zoning and intended use in addition to the residence itself.

When Should I Contact a REALTOR®?

You don't need to wait until you've found a property. Beginning the conversation earlier allows time to discuss representation, establish property criteria, understand the purchase process and prepare for making an offer.

Have Questions About Buying a Home in Kentucky?

You don't need to have everything figured out before reaching out.

Tell me what you're considering, what questions you have and what you're looking for in a property.

I'll help you understand the process, compare available properties and objective location information, and prepare for the decisions that come with purchasing real estate.

No pressure. Just questions, information and professional real estate guidance when you need it.

David Hittle
Kentucky Real Estate Specialist
Owner | Shop Kentucky Homes, LLC
United Real Estate Louisville
502.489.1135
www.shopkentuckyhomes.com