Looking to buy a home? Here are five essential tips for making the process as smooth as possible.
Get a pre-qualification letter – find a Lender
Figure out your finances. What is your credit report looking like? How much money do you have saved up? Do you know of all the different types of lending programs out there? You don’t need a 20% down to buy a home these days. Find a lender from someone you trust, get a couple of options and choose one you trust! The pre-qualification letter is a MUST in this market. If you don’t have one, your offer will not even be in the running because everyone else will have it!
What property is right for you? What can you afford?
A general rule of thumb when it comes to buying a home: two-and-a-half times your annual salary. With that said, there are many tools out there to help you out, the best thing you can do is look at a mortgage calculator. This gives you estimated taxes and includes insurance also. Treat your mortgage payment as what you pay for rent right now. When you talk to your lender, they will give you a number you are qualified for…that does NOT mean that is the price of your new home! Figure out how much each house costs your monthly payment and is that what you are paying a month now? Is it below, or higher? Find the right spot for you to live comfortably.
Hire a Realtor…NOW!
This day in age everything thinks they can do it themselves thanks to the internet. To be honest, the internet gives us a TON of information we didn’t have 10 years ago. HOWEVER, the internet can only do so much and sometimes it takes a little bit to get updated…or even a long time to get updated. In our market, timing is crucial. Can you truly rely on websites to be completely updated and be looking at the market like it’s your job? You have another job right…so you can buy this new home?! Hire a professional who looks at the inventory daily, several times a day to make sure you are notified about new listings. Let them work for you to get you the listings, set up the showings and submit offers and negotiate for you! Want the best news of all? Buyer’s agents get paid by the sellers!!!! You DON’T pay YOUR buyer’s agent…the sellers pay someone to work for YOU! Now doesn’t that sound amazing?!?
Homework, Homework, Homework
Before you make an offer, what is going on in the market? Before you even visit any properties…what is going on in the market? Let’s look at an example: Today’s market (4/12/17) is a sellers market. You want to buy a place for no more than $250,000. If you hire a professional, they will tell you that well priced properties are going for 10-15k over asking price because there are 3 or more buyers trying to win the house. Knowing that, you need to be looking for properties in the 230,000-240,000 range. A great agent will also let you know when there are properties just sitting on the market because there is something wrong with it or it’s over priced…or it’s finally priced right but was over priced for a LONG time. Homework involves knowing your market, know if the property is priced correctly, know how many offers are submitted, know your limits!
Think investment, not just now
When you buy, you should be staying in that property for several years so you can build up equity. Everyone wants a deal, to make sure when they sell they don’t lose money. The biggest thing to remember is buying at the right time for the right price. Don’t just buy a property because you HAVE TO. You will not be homeless if you don’t buy the property right away. Sometimes the best decision is the wait. Renting is always an option if you can find a place to let you rent on a month to month or short term lease. Maybe find a sublease to get you that extra month to find something. Bottom line, if it doesn’t make cents for the future, it doesn’t make sense now.