What those homebuying TV series don’t show

If you’ve ever watched those popular television shows where TV crews follow prospective buyers throughout their homebuying journeys, you have vicariously lived through the homebuying process.

According to the 2022 National Association of REALTORS^® Buyers and Sellers Generational Trends Report, 56% of all buyers stated that finding the right house was the most challenging task in the entire process. This finding helps explain why television shows about shopping for a home are so engaging.

Don’t let other people’s experiences lead to assumptions about the homebuying process.

During the opening scene, we watch cameras pan to couples or solo buyers in their current living situations. We watch as they hang out in their current home while a narrator tells us about their personal lives and what they do for a living.

However, for most of these shows, the mortgage lending side of the homebuying journey receives little to no camera time. By the time viewers meet prospective buyers, they have already determined how much they could afford to spend on a home while on camera.

Instead, we watch couples debate over floor plans, or we see buyers debate the merits of one neighborhood over another with friends and family members there to provide moral support while on their journey. We become vested in this journey and even take sides as buyers plead their cases on why they need everything on their house wish list. At some point in the conversation, the real estate agent confirms the maximum amount the buyers have budgeted and can afford to spend on their home purchase.

The budget conversation tends to be the time when a random dollar amount magically appears on the screen, but even then, viewers don't have any clue how or why the buyers arrived at this dollar amount. Instead, the focus shifts, and we now watch intently as the cameras follow these buyers as they complete back-to-back open-house tours.

Ironically, what helps make these shows possible is that many of these TV homebuyers have secured a preapproval, which is a conditional loan approval for the financing needed to confidently start and share their home shopping journeys.

A mortgage preapproval provides buyers with an estimate of how much they may be able to borrow so they can focus their homebuying search. It also lets sellers know the buyers have the financing they need to purchase.

Completing the preapproval process with their lender is a significant milestone, but this accomplishment is rarely mentioned or celebrated on camera. This significant milestone helps homebuyers determine how much they may be able to borrow to purchase a house. It also allows real estate professionals to identify properties that best fit a buyer's budget.

The preparation stage of the homebuying process may not make for riveting TV, but it’s a big part of why reality TV homebuyers can share their journeys. It's also why these shows have a budget to post on the screen.

Maybe you've seen the funny social media posts about these shows where viewers are baffled as to why some buyers think they can afford to spend based on what they do for a living or the type of house they want to purchase. But the preparation stage of the homebuying journey tends to happen off-camera, which means viewers don't get to learn how these homebuyers determine their homebuying budgets.

One thing we don't see reality TV homebuyers do is review their credit reports. Credit scores can impact many things, including whether your loan is approved.

As we watch buyers visit multiple homes, we become emotionally invested in every twist and turn. We feel disappointed when they lose a bidding war to a higher offer. We get excited as we watch buyers fall in love with a house and then feel the same sticker shock as the buyers also learn the sales price.

Unfortunately, this fear can derail your homebuying journey. If you don’t know how much you want to spend or where you want to live, this uncertainty may be enough to cause you to procrastinate and put off completing any steps related to securing your mortgage loan.

There are ways to reduce or eliminate the likelihood that you will experience some of this on-screen homebuying drama when starting your homebuying journey.

Assessing your credit history before applying for a mortgage can help you address any issues that might hurt your credit score. This step can help determine if you are ready to complete a prequalification or apply for a mortgage preapproval.

It is helpful to review your credit report from the three major credit bureaus: Experian, TransUnion, and Equifax. Reviewing your credit reports helps ensure the information is accurate and lets you take action to address any negative issues impacting your score before you apply for a mortgage. You can also pay a small fee to request your credit score, or check with your bank to see if they offer free credit score monitoring services.

Learn how you can check your credit score, track your spending, and much more in the Wells Fargo Mobile^® app and Wells Fargo Online.^® Get the details.

Many reality TV homebuying programs only show what happens after the buyers meet with their lender to determine how much they can afford. However, establishing your budget before shopping for a home is an important first step.

Although watching buyers make a budget doesn’t make for riveting TV, the steps they complete to determine which homes fit their budgets are why these episodes make it to the screen.

Your lender can provide two ways to help you determine how much to budget for your monthly payment: a prequalification tool and a preapproval application. Both can help you determine how much you may be able to borrow before you start looking at the home listings in your dream neighborhood.

Which tool you start with depends on your goal.

• Prequalification. Suppose you only want a rough estimate of what your lender will likely lend. You can use a prequalification tool to get a ballpark amount to start your budget.
  A prequalification is a preliminary look at your overall financial profile, which your lender uses to estimate how much they’re likely to lend you based on the self-reported financial details you provided. Since the lender doesn’t verify the information provided at this stage, a prequalification isn’t an official approval or loan guarantee. Instead, it gives you a starting point to create your preliminary homebuying budget.

• Preapproval. On the other hand, if you are eager to start searching online listings or touring homes like the reality tv homebuyers on these shows, you may want to complete your lender’s preapproval application. If you choose this option, you will give your lender permission to review your credit and verify the financial information you provide as part of the preapproval application process. A mortgage preapproval will give you a better sense of how much a lender will likely loan you based on your financial profile and credit history.

When you start your homebuying journey, you can help your real estate professional recommend homes and negotiate with sellers based on what works best for your needs and finances. Taking a budget-first approach to homebuying can deliver the same excitement you see when the reality TV homebuyers finally settle into their homes.