Buyers Need Some Serious Advice!

Your mom and dad finally win, you are going to buy your own home. When doing so, having a better understanding of the process and making sure you have a qualified professional agent by your side will help you navigate your first purchase. Here are some steps or tips to help. It is a process but this is simplified. Get pre-approved, which is a written estimate from a lender stating how much you will likely be able to borrow based on an initial review of your credit and financial information. It is the basis for the entire process. It shows how much you can spend and what price range you are going to be searching in. It holds more weight than a pre-qualification. Typically for a pre approval, you will need to provide a lender with a variety of financial documents including pay stubs, tax returns, and bank statements. Getting pre-approved at the very beginning of the process is key. You’ll be certain as to how much you can afford, if there are any concerns with your financial picture and/or credit you have time to address them, and if/when you find a home you love you’ll be ready to go and not have to scramble. Even though pre approvals expire typically within 90 to 120 days, your lender will be able to update it for you with a quick phone call and perhaps a few updated documents.

Visit a lot of houses before making a final decision. Maybe even before selecting an agent. Not homes on the market, but homes of friends and family. Keep in mind that you are going to have to make a selection of a home that has the qualities you are looking for specifically. There are many factors that go into determining your perfect home: Price, neighborhood, street, size, views, condition, and proximity to places you frequent. Searching online is incredibly valuable but nothing replaces in- person visits. Taking the time to visit several houses will allow you to confidently narrow in on your preferred criteria and make an offer with confidence once you do find a home that you love. Too often, buyers will miss out on the perfect home because they feel they haven’t yet seen enough properties to confidently move forward with an offer.

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. 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.