There are few purchases in life that carry the financial and psychological weight of buying a home. No matter what type of buyer you are; first-timer, move-up, empty nester, or something in between, there are basic principles that can help keep the process moving forward.
When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion. Buying a home can be an emotional process, nevertheless it is vital to keep your emotions under control and not let them cloud your judgment.
1. Arrange Your Financing
There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there are search for that great home is understandable, you must line up the financing you will need before you start shopping for a home.
Getting the financing ahead of time has several important advantages. Chief among them is knowing how much you can afford! Nothing is worse than finding the PERFECT home only to discover that it is beyond your financial means. Secondly, most sellers will not even entertain an offer from you without proof of financing in the form of a pre-approval letter. Finally, many agents will be less likely to show you a property until you can prove that you are an able buyer.
It is also important to take a good look at the various types of mortgages on the market before getting started in the home buying process. These days, mortgages come in far more choices than the typical 15 or 30-year products. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.
2. Study the Neighborhood
It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle. It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.
We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case. Buying a home in the wrong area can be a huge mistake, and it is important to choose the location as well as the home. Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents. When exploring, be sure to drive by the home at different times of the day to see what sort of traffic noise the area has.
3. Find a Great Agent
Once you have your financing in order and a good idea where you want to live, you need to get a buyer’s agent. A buyer’s agent is someone that represents YOU in the transaction in exchange for a pre-negotiated portion of the listing commission. If a listing agent places a property on the Multiple Listing Service, he or she agrees to pay commission to another agent if they bring a buyer. You are NOT writing the agent a check for their services. It comes from the sale proceeds.
A buyer’s agent works on your behalf and can assist in finding and showing you a home, helping you craft your offer, negotiating the terms, and making sure everything goes smoothly until the closing. This is NOT something you want to do on your own. If you don’t know a good agent in your area, fill out this Referral Request Form and someone will connect you with a professional that can help you reach your goals! It’s totally FREE to you!!
4. Make a Reasonable Offer
Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for. Comparing the sales of comparable homes, what are known as “comps” in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property. Listen to your agent’s advice. That’s why you hired them!
5. Get a Home Inspection
Always investigate the home for any possible defects! Most state contracts allow for an inspection period after the offer has been accepted. Compared to the cost of surprise repairs after the fact, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy. Talk to your agent and ask for several recommendations. Check online for ratings and reviews before you make your selection.
6. Play Nice with the Seller
Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller. It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale. This is a great place where the “golden rule” applies. Put yourself in the seller’s shoes. How would YOU feel if a buyer did what you are doing? A home sale should be a win-win situation for everyone involved.
If you keep these 6 tips in mind, you should have a much smoother transaction. Buying a home can be very exciting, so try to enjoy the process as much as possible!