Buying a Home

About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C., area who works with clients virtually across the country. Dream Financial Planning is a Fiduciary Financial Planning firm specifically designed to help individuals at any stage of life take control of their finances and fulfill their dreams. Feel free to schedule a Free Consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals. 

When people talk about the American Dream and what it means to them, buying a house is often near the top of the list. However, the care and responsibilities of owning a home can sometimes be overlooked: You’re not only buying the house but also committing to a new roof every couple of decades, keeping the electrical and plumbing systems in good repair, and replacing the water heater. You may need to take care of landscaping or lawn maintenance, as well. It can quickly become a considerable to-do list! And, this list only becomes more complicated when you’re thinking about a second home.

Home Purchase Checklist

This is a comprehensive checklist that highlights the types of issues you should consider when purchasing a home. First-time homebuyers are not always fully aware of the financial ramifications of such a major decision, and I work with my clients to ensure that they are equipped to deal with these issues, allowing them to enjoy home ownership to its fullest.

The Money

Whether you’re financially ready or just starting out, most questions about home ownership come down to money. Have you saved enough for a down payment? Can your budget accommodate a monthly mortgage? Is your income seasonal or steady? How’s your credit history? These questions all relate to your ability to "thread" that financial needle and make the purchase happen.

• Did you know that 74 percent of all buyers financed their home purchases in 2024? This is a decline from 80 percent in the previous year.¹
• First-time buyers were more likely to secure financing, with 91 percent doing so compared to 69 percent of repeat buyers. A record-high 26 percent of homebuyers paid in cash in 2024.¹
• Among recent buyers, 49 percent used their savings to fund their home purchases, down from 54 percent in 2024. For first-time buyers, savings were the most common source at 69 percent. In contrast, 25 percent used a gift or loan from a relative or friend for their down payment. Interestingly, 52 percent of first-time buyers opted for a conventional loan whereas 29 percent chose an Federal Housing Administration (FHA) loan, and 9 percent used a Veteran Affairs (VA) loan.¹
• Buyers continue to view purchasing a home as a wise financial decision, with 79 percent believing it to be a good investment, and 39 percent of those believing it was better than other investments.¹

The Time

People rent for many reasons. Some may not have the money to buy a home, while others might view home ownership as a hassle. The responsibilities of home ownership are considerable, after all, regardless of location. Ultimately, it's a personal question of, "How much time and energy do I want to spend?"

• Did you know that the median age of first-time homebuyers increased to 38 years old, up from 35 years of age in the previous year? Meanwhile, the typical age of repeat buyers rose to 61 years young, up from 58.¹
• Among recent buyers, 62 percent were married couples, 20 percent were single females, 8 percent were single males, and 6 percent were unmarried couples.¹
• Notably, 73 percent of recent buyers who did not have children under 18 in their homes represent the highest percentage recorded.¹
• Additionally, 17 percent of homebuyers purchased multigenerational homes for reasons such as cost savings (36 percent), caring for aging parents (25 percent), accommodating children or relatives over 18 returning home (21 percent), and housing children over 18 who never left (20 percent).¹
• Among recent buyers, 16 percent were veterans and 2 percent were active-duty service members.¹
• The primary motivation for purchasing a home was the desire for ownership, cited by 22 percent overall, but rising to 64 percent among first-time buyers.¹

The Research

Some of the information a homebuyer may want to gather can be categorized as "money considerations." You’ll want to ask yourself: Are you pre-qualified or pre-approved by a lender? Remember, pre-qualification doesn’t require as much information and is only based on estimates, while pre-approval is based on more detailed income verification. This may be important as it gives you a measure of what you are able to buy.

When applying for a loan, be certain to understand your options. For example, some may find down payment assistance programs and grants for households with low- to moderate-income attractive.

• Did you know that 88 percent of home buyers used a real estate agent or broker?¹
• Meanwhile, 5 percent of buyers bought directly from a builder or their agent, and another 5 percent purchased straight from the previous owner.¹
• The primary reasons home buyers used an agent or broker were to find the right home (49 percent), and to negotiate the sale terms (14 percent).¹

The Search

The actual house-hunting can begin once the research is out of the way. While this may be the most fun part of the process for many, it can be both exhilarating and exhausting! Since this is such a big commitment, it will help if you clearly understand what you need from your house. For example, are you bringing family members, or will there need to be room for family members to come? How big is the yard, and what do you want to do with it?

• Did you know buyers spent a median of 10 weeks searching for a home in 2024, typically viewing seven homes, some exclusively online.¹
• Every home buyer utilized the Internet in their search, finding the most valuable information to be photos (41 percent), detailed property information (39 percent), and floor plans (31 percent).¹
• Additionally, 21 percent of buyers contacted a real estate agent as their initial move.¹
• Real estate agents played a pivotal role, with 86 percent of all buyers using their services, making it the most utilized source of information.¹

Buying a home may be the largest purchase of your life. It’s a place where you and your loved ones can gather and enjoy your lives. I’m not a real estate expert, but I can speak to how a home fits into your overall personal finances. I encourage you to work closely with qualified professionals who can guide you through the process as you prepare to make one of the biggest purchases of your life.

Different Ways You Can Work With Us

Wealth Management - Combines ongoing financial planning and investment management. The financial planning fee is waived if we manage at least $1,000,000 in investments for you. You can review our investment management fee structure here. Tax Preparation and the ability to create a Will or Revocable Trust-based Estate Plan will be included.

Ongoing Financial Planning - Starting at $400/month, our most popular program now includes tax prep. This is a good fit if you have several goals and want the option to manage your investments. We'll cover everything from spending, insurance, taxes, investments, retirement planning, and estate planning. Our goal is to give you and your family an easy-to-understand comprehensive plan to provide you with confidence you're making the right financial decisions.

One-Time Financial Plan With Ongoing Support - Starting at $4,800, this is an accelerated version of the service above with additional support for one year after your start date. This service requires prepayment for the year and is offered at a significant discount from the annual pricing for ongoing planning. Tax Preparation and the ability to create a Will or Revocable Trust-based Estate Plan will be included.

Tax preparation is now part of the ongoing financial planning program. This will be in addition to the Tax Report we already generate for clients and our work with the IRS Withholding Calculator to help prevent our clients from getting a surprise tax bill.

Three-Hour Ask Me Anything - This is a good fit if you have 2-3 goals you want help with. These three one-hour meetings need to be completed within three months. The fee for this service is $2,000. You also get a free 30-minute meeting to help us get started.

Financial Coaching - Our financial coaching program starts at $99/month. This is ideal for someone who is looking to simplify and automate their finances. We'll also serve as an accountability partner and help you overcome obstacles that may be stopping you from accomplishing your goals. You can learn more about our coaching program here. If you think this program might be a good fit for you, schedule a 15-Minute Demo.

Hourly Financial Planning -Billed at $400 per hour. For each hour of meeting time, we'll bill at least one additional hour for meeting preparation and follow-up.

Our Full-Service Process For New Clients

Net Worth and Budget

The first thing I do for new clients is assess their current financial situation. We do this with the aid of financial planning software. We review assets, liabilities, income, and expenses. If you'd like to test drive my comprehensive financial planning software, visit Right Capital and create a profile. View this Right Capital video to learn more.

Insurance

As a Fee-Only Firm, we don’t sell insurance or charge commissions. However, we like to review home, auto, and umbrella insurance to ensure you have the proper coverage. We’re happy to work with your existing agent or refer you to an independent broker to ensure you get the best deal. We also look at your employee benefits, long-term and short-term disability insurance, along with life insurance to make sure your family is protected.

Tax Preparation and Tax Planning

Tax preparation is now part of the ongoing financial planning program. This will be in addition to the Tax Report and Tax Planning we already generate for clients. We also use the IRS Withholding Calculator to help prevent our clients from getting a surprise tax bill.

Investments

Whether you want us to manage your investments or you want to manage them yourself and you're just looking for a second opinion, we can help. We'll help you optimize your investments to make sure you’re not leaving any money on the table. Here’s an example of the quantitative analysis I can do for your investment accounts where we also evaluate your current fees.

If you’d like to review your risk tolerance, complete our risk tolerance questionnaire. This will give you your personalized risk number as seen on page 1 of the sample portfolio above. Feel free to check out the article 10 Best Tips for Beginning Investors from U.S. News where I shared a few investment tips.

Retirement Planning

This is where we bring everything together. Take a look at the links below for examples of some of the deliverables we prepare for clients.

• Get Your Free Retirement Check Up
• Elements® Financial Monitoring App
• One Page Financial Plan
• Financial Independence Presentation

Estate and Legacy Planning

If you're looking for a cost-effective solution to get your estate planning documents in place, we can help. We have partnered with a leading Estate Planning platform to deliver high-quality Estate Planning documents for a fraction of the cost of working with an attorney. I included a blog post below that highlights the key documents that should be in your Estate Plan and my normal pricing.

What's In Your Estate Plan?

Revocable Living Trust-Based Estate Plan

• Individual - $1,600
• Couple - $2,100

Will-Based Estate Plan

• Individual - $900
• Couple - $1,400

I hope we get the opportunity to work together. If you'd like to see if any of these services are a good fit for you, feel free to schedule a free consultation or send me an e-mail.

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