Buying a Home


 

Buying A Home

 

 

 

Home Buyer Checklist

 Buying a home is not something to be taken lightly - or something to be entered into without preparation. Whether you are in the market for a $300,000 home or a $10,000,000 mansion, you need to prepare carefully and make sure everything is ready to go. 

 

The home buying checklist below can help you get started and reduce the chances of an unpleasant surprise down the line. Taking care of these items before you start shopping is an important part of the home buying process. 

  • Set a Monthly Housing Budget

Setting a realistic monthly housing budget is essential, and it should be the first step on your checklist. Financial experts recommend that the total cost of housing, including the mortgage payment, real estate taxes, homeowners insurance and any maintenance or association fee’s and upkeep, should be no more than a third of your gross income.

You can use an online mortgage calculator to estimate the cost of your monthly mortgage payment and use it to determine a price range when you start to shop for a home. Remember it is best to err on the low side and buy less home than you can afford rather than stretch to make the monthly mortgage payment.

  • Check Your Credit Score

Your credit score will help determine the interest rate you pay on your mortgage, or if you qualify for a mortgage at all. If you do not yet know your credit score, make it the next item on your home buying checklist. 

Many credit card issuers now include credit scores on their monthly statements. If yours does not, just contact the credit reporting agencies to get a copy of your most recent score.

  • Research the Local Neighborhoods

You will probably be shopping in more than one neighborhood, so it is important to research the local area thoroughly. Look at things like school graduation rates, trends in violent and nonviolent crime and home values as you select neighborhoods and make your home shopping list. 

    Find a Great Realtor®

Once you have all your ducks in a row and know how much you can afford to spend, it is time to start interviewing local real estate agents. You want an agent who knows the local area and has specific expertise in the type of home you have in mind.

Some of the keys to look in for an agent are his or her experience.  This is so important in today’s marketplace with different regulations and rules to adhere to. Most experienced agents will also have good working relationships with other local Realtors, lenders and attorneys to make the sale go more smoothly. Ask questions like “are you a full time or part time agent?”, “Can I see how many past sales you’ve had?”, “Where can I find recommendations clients have written for you?” and “What times are you available to show me homes or answer my questions?”

Look for a Realtor® who holds all the required licenses and has attained the necessary accreditations. Once you have selected a great agent, you can get on with choosing the right home for yourself and your family.

  

Common Mistakes First Time Home Buyers Make

For most people, the roof over their head will be the largest single purchase they will ever make. If you are in the market for your first home, you have probably discovered just how complicated and downright intimidating the process can be. The potential for mistakes is all around you when buying a home, and those blunders can be costly ones. Here are some of the most common mistakes first time home buyers make, and how you can avoid them.

 

  • Buying Too Much Home

Buying more home than they can afford is perhaps the biggest mistake first time home buyers make. It can be hard for first timers to know how much they can really afford, and some real estate professionals are only too happy to steer those buyers into homes that are too expensive.

Always do your own homework and conduct your own research when setting a budget and a price for your new home. If you are unsure, look for a less expensive home than you think you can afford - you will sleep better at night.

  • Not Assessing Your Financial Situation

If you are living paycheck to paycheck and struggling to make ends meet, now is probably not the time to buy a home. Being a homeowner can be an expensive proposition, with not only mortgage payments but things like ongoing repairs and maintenance.

Any decision to buy a home should start with a thorough assessment of your financial situation, including any cash you have saved, emergency funds, retirement accounts and the like. Make sure to check your credit score to see how that will impact mortgage interest rates. Once you know where you stand, you can see how much you have for a down payment and make sure your income will allow you to make the monthly mortgage payments. 

  • Look at Your Job Situation

Your employment prospects will obviously play a big role in your decision to buy a home. If your employer is stable and you have good visibility of earnings, the shift from renter to homeowner can be a smart one. If the company you work for is struggling financially, you may want to put off the decision and rent for a little longer.

It is also important to think about possible relocation before buying a home. If you think you might relocate for work within a year or two, it might make more sense to buy a home in your new location. If you think you will stay where you are for the long term, buying a home is probably a good idea. 

No matter what your budget or circumstances, it is important to think carefully before buying a home. The commitment to buy a home is long term, and you will probably be paying the mortgage for the next 15 to 30 years. Given the importance of the decision, it is important to make sure you are truly ready before you make the move from renting to buying..

  • Not Understanding Down Payment & Loan Options

 In a perfect world, every home buyer would be able to put 15% or even 20% down, thus lowering their monthly mortgage payments and maximizing their equity from the start. Unfortunately, in the modern real estate market that high level of down payment is often unrealistic. 

If you are buying a $350,000 home, making a 20% down payment means coming up with $70,000 in cash plus closing costs. That is a high bar for the average home buyer, and an impossibility for many others.

The good news is that there are plenty of ways to buy a home with a much smaller down payment, or no down payment at all. Knowing where to shop and which programs you may qualify for can make the home buying process easier and less stressful. Some options include VA loans for veterans of military service, FHA loans administered by the Federal Housing Administration, and the USDA Rural Development mortgage guarantee. Ask your Realtor for the most up-to-date information on these programs to see if you qualify and how they can help you achieve your dream of home ownership. 

 

Useful House Hunting Tips

 Your home is likely to be the most expensive single item you will ever buy. With so much money on the line, it is important to make your choice with care and prepare properly for the purchase.

Chances are you will be looking at a lot of different homes as you shop for the perfect property. Having a way to compare those homes will help you make a wise choice. Here are a few house hunting tips you can use right now.

  • Make a List of Must Haves and Nice to Haves

Before you attend a single open house or even contact a Realtor®, you should first make a list of the things you absolutely have to have, and a second list of the things you would like to have. 

If granite countertops and hardwood floors are a must, you can cross homes with Formica and shag rugs off your list. That can save you a lot of time and cut the list of potential properties substantially. 

I’ve always found that you should list the 3 most important features for each person and then discuss why they are important and necessary. IE one person may say they want a basement so they can have a home gym. If you can find a home with space to create a workout room, the basement may not be necessary.

  • Get a First Impression and Then Take a Second Look

It is easy to get overwhelmed and fall in love with a home, but that is a big mistake. Whether you are attending an open house or scheduling a private showing, walk through the house from front to back.

Let your first impression sink in for a few minutes, and then turn around and walk through the home more slowly. Take a closer look at everything you just saw and take notes as you go. You can refer to those notes later and use them to make an informed buying decision. 

  • Measure Your Existing Furniture

If you are planning to bring your existing furniture with you, take measurements before you leave for the showing or open house. It can be hard to tell how your sofa will look in the new living room and having measurements with you will make it a lot easier.

Be sure to get a complete floor plan for each home look at. You can use that information to compare homes and find the best value for your money.

 

  • Check the Storage Spaces

A lack of storage space can be a deal killer, so always check the closets, drawers and other storage areas carefully. Look inside the drawers, assess the closet space and picture how your items will look on those storage spaces.

  • Look Under the Rug

You never know what could be lurking under that rug, so don't be afraid to lift it up. Look for stains on the carpets and hardwood floors that could be difficult, and expensive, to clean.

Throw rugs are often used to conceal imperfections, and many buyers never look underneath to see what they are hiding. Avoiding that mistake can help you get a better value and find the best home you can.

  

Selecting an Agent to Represent You

 

Buying a home can be an intimidating experience but having the right professional in your corner can help a great deal. Asking the right questions can help you find that qualified professional - and then find the home of your dreams.

 

Buyers Agent VS Broker/ Sellers agent

 

Sellers/ Brokers Agent

works for the best interest of the seller.  Their responsibility is to get the best terms and price for the seller.  Listing agents are always the sellers agent and work for the sellers interest.

Buyers Agent

Is hired by the buyer to represent their interest. The buyers broker/ agent works to get the best terms and conditions for the purchaser and not in the sellers interest.

 

Questions for interviewing a Realtor

 

  • How Many Clients Are You Currently Working With?

You cannot realistically expect the undivided attention of the Realtor® you choose, but an agent with dozens of clients may not be able to give you the time you need. Always ask the agent how many clients they are currently representing and make your decision accordingly. 

 

Experience

Even the best training cannot prepare real estate agents for every potential scenario. That is why it is so important to work with an experienced real estate agent who understands the area and the local real estate market. This is so important in today’s marketplace with many new and different regulations and rules to adhere to.

Always ask potential real estate agents how long they have been in business and how many years of local experience they bring to the table. It is also a good idea to look at industry awards and accolades, since they are generally given to the best and most expert agents.

 An experienced agent will also normally have a good working relationship with other local Realtors, lenders, and attorneys to make the sale go through more smoothly.

 

Buying a home can be difficult, knowing what to look for will make it easier. The above tips can help you get started - whether you are looking for a starter home or moving up to a new and larger property.