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I hope my graphic isn't too graphic.  Buying a home is a huge decision. I am finding that buyers start the process, look at some homes and maybe even write an offer.  Then they get cold feet.  Some back out before the contract to purchase the home is fully executed. I am seeing this type of behavior more often than ever before and so are my peers around the country. I have had the experience with three sets of buyers this year. I wrote an offer for each and in each case they decided not to buy this year. 

It is better to back out before the contract becomes legally binding but it would be better not to make an offer at all until you are sure that home ownership it the right decision.

Most buyers get a little nervous after making an offer, that is something that seems to go along with any huge purchase. You wonder if you did the right thing, or if you offered too much and maybe even have some concerns about the home of the long term commitment involved when you think about a thirty year mortgage. 

The process should start with deciding how much you feel comfortable paying each month for housing. The next step should be meeting with a lender.  The lender will tell you how much money you can borrow.  That information alone is not enough.  Ask how much you need for a down payment and ask how much closing costs will be.  Closing costs include a mortgage origination fee, a state mortgage tax, several other fees and what we call prepaids, or money that is escrowed for property taxes and insurance . . . and there is more. For more Minnesota home buyers the minimum down payment will be 3% of the loan amount and the closing costs will be around 3% of the loan amount. The lender should provide a good faith estimate. Ask for one! It shows the true cost of borrowing the money.

After all that is done and you understand it all and are comfortable with it you can go house hunting. For some the type of house that they want to live in and what they can afford just don't match up. it is possible that after looking at some houses you may decide that you don't want to buy one. It is better to decide not to buy before making an offer.

Sellers need to understand that buyers are nervous these days and they are looking for bargains if your home doesn't look like a bargain chances are you won't be getting any offers. When an offer does come in it may bot be what you were hoping for but it may be the last offer for a long time. Take that into consideration as you negotiate. Have your agent to a market analysis to prove that your home really is worth what you are asking for it.