Looking to buy a home? Here are five essential tips for making the process as smooth as possible.
Get your finances in order.
Start by finding a suitable lender and get pre-approved for a loan. Your realtor can usually recommend a lender who will be a good fit for your situation. Obtain copies of your credit report. Make sure the facts are correct, and fix any problems you find. This will put you in a better position to make a serious offer when you do find the right house.
Find a house you can afford.
As with engagement rings, there’s a general rule of thumb when it comes to buying a home: two-and-a-half times your annual salary. There are also a number of tools and calculators online that can help you understand how your income, debt, and expenses affect what you can afford. Don’t forget, too, that there are lots of considerations beyond the sticker price, including property taxes, energy costs, etc.
Hire a professional.
While the Internet gives buyers unprecedented access to home listings and resources, many aspects of the buying process require a level of expertise you can’t pickup from surfing the web. That’s why you’re better off using a professional real estate agent than going it alone. If possible, recruit an exclusive buyer agent, who will have your interests at heart and can help you with strategies during the bidding process. Traditionally the services of an agent to the buyer are FREE since commissions are paid by the seller.
Do your homework.
Before making a bid, do some research to determine the state of the market at large.Is it more favorable for sellers or buyers? Next, look at sales trends of similar homes in the area or neighborhood. Look at prices for the last few months. Come up with an asking price that’s competitive, but also realistic.Otherwise, you may end up ticking off your seller.
Think long term.
Obviously, you shouldn’t buy unless you’re sure you’ll be staying put for at least a few years. Beyond that, you should buy in a neighborhood with good schools. Whether you have children or not, this will have an impact on your new home’s resale value down the line.
Dealing with Financing
Here are a few tips for dealing with the dollar signs so that you can get ready to move into your new home.
Get pre-approved. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford.You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Don’t make any large purchases or open new lines of credit. While you’re getting approved for a mortgage hold off on buying any appliances or furniture you have to finance. And nows not the time to buy anew car. Keep your focus on your new home, it’s most likely the biggest investment you’ll make. It’s important to have strong credit and not make any financial changes that might have an impact on your loan approval.
Do your homework before bidding.Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood, your agent Hilary Peter can help with this. Consider especially sales of similar homes in the last three months. Your realtor will be able to provide you with recent comparable sales and market activity, as well as advise you on terms when you’re ready to make an offer.