I told you there would be a part two for the blog that I consider to be very important. The buying of a property and how to actually get started. I stated in the last blog that people in the industry might not have it occur to them that the majority of people who have never purchased a home before, might not know how to even get started. I discussed getting pre-approved for a loan and not settling for a home until they have seen a variety first. Here are some more tips to help the process.
Along the lines of getting pre-approved for a loan, you will have to figure out what your actual budget is.Determine your budget and stick to it. In determining your budget, focus on two key metrics and understand how they work together to impact your budget — your liquid assets and the total monthly housing payment you can afford to carry. Your liquid assets (stocks, bonds, mutual funds, money markets and cash) will help determine your down payment and liquidity post-closing. Make sure to factor in any closing costs, moving costs, and/or renovation costs associated with a specific property. Your monthly housing payment (mortgage, common charges / HOA / maintenance, real estate taxes, insurance) should not exceed 30% to 35% of your pretax income, and ideally will not exceed 25% of your pre-tax income.
There are a lot of homes out there, but we should always have our own agent make sure that the other agent is doing their job or that the seller isn’t asking for too much. We need to have the property “appraised” which will draw a professional value-assessor to the property on behalf of the bank who will determine whether the bank is going to lend you the property amount of money to buy the property for what it is actually worth. Carefully review “the comps” when determining value. When making offers with your agent, consider comparable units that have sold recently, those in contract, and other active listings. Don’t simply focus on those that have sold. Your agent is there to assist you in gathering this information and the market value will be impacted not only by what has sold but also by what is currently in contract and active inventory at that moment.
Select a buyer’s agent early on. Your real estate agent is there to guide you, answer your questions, qualm your concerns, manage the process, and to market you as the best candidate to a seller and his/her agent. The better your agent knows you both in terms of personality and financial profile, and the better he or she understands your preferences, the better they can serve you. Look for agents with expertise in the area you’re searching in. Proven agents are the best. All of the above point to choosing the right agent. Don’t do it alone and don’t trust websites as the only factor. Nothing replaces a knowledgeable and informed agent as your best asset in finding your new home. I can’t stress this enough, not because I am in the industry to sell homes, but I am in the industry to make people’s dreams come true. It is the ultimate purchase and the ultimate source of pride when you own your own home. Good luck all.