Tips to Successful Home Buying
Make A Plan And Get Pre-Qualified
Every important decision needs to be clearly though out. Developing a home buying plan can help you focus on important factors and organize the entire process. Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are 10,000 lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with loan department managers are over. Today, you can apply for a loan over the internet or even use a mortgage broker to shop for your loan with hundreds of lenders. When choosing a lender, you want to avoid apples to oranges contrasts by comparing fixed rates to fixed rates, not fixed to ARM's.
A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan, but you can be higher based on the loan type and your credit score. Planning your actions and getting pre-qualified will keep you out of the panic mode, allow you take advantage of opportunities, and most importantly, risk losing money. A thorough plan will save both time and money! Decide how much money you have to work with, where it is coming from, what type of loan is best suited for you (fixed, adjustable, FHA, VA, Conventional, USDA, etc), and get all the required documentation together ahead of time to save time and frustration. Getting a mortgage pre-qualification letter also allows you to shop for your home with confidence too!! This can be done quickly and easily. Ask us for a list of lenders that our previous clients have had great experiences with. We can help you avoid some of the nightmares that exist out there!!
Determine Your Target home
Location, Location, Location is still the main factor in determining value in Real Estate. If you have an eye towards improvement. Sometimes buying a home that is a little "rough around the edges" will allow you to customize it to fit your needs and build some value quickly. Ask us about a market analysis that will compare the home to others of similar size, features and location to see how it compares value-wise to others that have sold. This helps ensure, along with lenders appraisal that you are not over paying. By reading available materials, talking to friends and experts, and spending time looking at different homes, schools, and neighborhoods will you end up with your American dream.
Used Vs New
Older more established neighborhoods can be more peaceful with large trees, establishes landscaping and neighbors that are familiar with each other. Older homes can require more maintenance and have higher utility bills because they were not built to today's energy standards. Likewise, since these homes were built many codes are likely to have changed. Home inspectors are required to inspect to today's codes and will find, depending on the age of the home, many items that have not been updated. They must include these in their report and most sellers will not be aware of code changes. Your mortgage company will not require these items be brought to today's decision. To do so will be a personal decision. Most sellers feel like, since they have lived in the house as it is, and in many cases raised their family with no problems, they do not want to perform repairs associated with code changes.
New homes can be great value, many builders offer incentives ( usually tied in with using their lender) and if we locate a builder with an inventory home that suits you, we can sometimes negotiate very good terms. Builders pay Realtors out of their marketing budget, so having expert representation does not cost you. Maintenance and utilities will be less with a new home but taxes can be higher. You must be sure the mortgage company sets up your escrow account correctly or you could face a huge escrow short age when taxes and insurance are paid. This could result in a huge increase in your monthly payment.
Create A List of Amenities and Prioritize Them
When shopping for a home, list features (fireplace, fenced-in yard, etc) that are most important to you in deciding on which home to buy. Establishing "your criteria" early on will save time shopping for appropriate homes and may keep you from buying a home on a whim. Remember, your top reason for buying a home should be the value you are getting as well as the location and lifestyle change you are searching for. Some of your top amenities could logically be sacrificed if an incredible value is available and the location is right.
Sign A Contract That Protects You
Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Obtaining a Residential Service Contract that has certain warranties helps, and be sure to look over a Seller's Disclosure statement carefully if there is one. This disclosure tells you everything that the seller knows and, perhaps, doesn't know about the property you are interested in. Ensuring that the contract you sign will minimize potential legal battles will let you swim in your new pool with your family, friends, and neighbors instead of with the sharks. Ask if you are not sure. As a qualified and licensed Buyer's Agent Representatives, our loyalties are you, the Buyer, not the Seller, and the best of all...Our services are FREE to you!!
Put yourself In The Seller's Shoes
You are about to make one of the most important decisions that will affect both your life and the life of the seller. If you take time to understand the reasons the seller bought the home, their reasons for selling, and the home improvements they have or have not made, you'll be in a better position to evaluate the home and negotiate a better deal. In the end, the home buying process excludes the professionals and comes down to the individuals buying and selling the home.
Get A Quality Home Inspection
Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives-their homes. Paying for qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of dollars for repairs.
Peace of Mind: Home Protection Plans
To protect both you as a buyer, as well as the seller, it is a good idea to purchase a home protection plan. What exactly is it? A home warranty, or home protection plan, is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which does not overlap or replace homeowner's insurance policy, this type of warranty can save the new homeowner lots of headaches, as well as put seller's fears to rest. The warranty covers mechanical breakdowns, while insurance typically repairs the related damage. For example: if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall! This usually negotiated "up front" in your offer to purchase a home and we always recommend it. There are also many companies to obtain this type of warranty with. Ask us for a recommendation!!