Step 6. Start going to open houses
All of your research should have pointed you to plenty of houses that are open on Sundays from 12 to 2 pm or 1 to 4 pm! This part of the process is where you really start to understand whether your really know what you want in a house!
Open houses are primarily done by realtors looking to find new clients. If you don't have a realtor, it can be a good way to find somebody that knows the area and can help you find a house. That being said, the person running the open house may not be the realtor on the house. They sometimes have newer realtors from their office staff the open house to get them experience or new clients.
I recommend you walk through homes at the top of your range that have been remodeled as well as at the bottom or beneath your range. The reason is that you will begin to see what your money will buy you in the various areas you are targeting. That really nice house that was remodeled was probably half the price 8 months ago when the remodeler bought it and fixed it up. The good thing is that you can look at previous sales prices online to know what it was purchased for and get a better feel for what it might cost to do a renovation of a similar home.
As you go through newly remodeled homes, notice the work and craftsmanship. Do the wood types match? Is the painting professionally done? Do you get a sense of quality? If you like what you see, ask the realtor or person sitting there if they know who did the remodel. They may not know who did it but there will be somebody that does so jot down the address and research online for construction permits on the home. That will typically tell you the name of the organization that did the remodel.
Step 7. Talk to Realtors and Builders
You should now have a better understanding of the type of home and remodel you are looking to do and you can start to interview realtors and builders. This is probably the toughest part of the process. My advice is to interview several and let them pitch you on why you should go with them. I strongly recommend that when interviewing builders you ask them if they will walk through homes with you to help evaluate the potential of each home and the scope of the project. Builders look at homes differently because they know and understand the potential of each property but also understand the pitfalls. We did this with our builder and it helped us avoid several properties that at first seemed like good potential in our eyes.
Step 8. Put together a financial plan
You should now have everything you need to make an informed decision on your next step. You may decide that this is too much work and too expensive to move forward. That's o.k. That's part of the process. It's o.k. to know to not move forward.
The next step is to put together a more formal budget. You'll want to plan for all the little costs that add up as you are going through the process. You'll want to take into consideration moving costs, temporary storage, temporary housing arrangements (close dates can and will move or you may sell your house prior to being able to move into your new one), boxes, and closing costs / concessions.
Depending on where you are looking to buy a house, you could be competing with multiple offers and paying more than you expect to spend. Take 5% off your high end budget for the house to keep yourself in check on your budget.
Last bit of advice here: Know your breaking point on budget and don't share it with builders or realtors. I know that sounds easy and simple but if you say your budget is $250,000 to $300,000, you'll be seeing homes in the $275,000 to $320,000 because you can "negotiate" down but it never seems to go that way for most people I know, especially if there are multiple offers.