| |
|
|
|
|
There are a few things that you can do to help make the process go
as smoothly as possible
Check your credit
Before you apply for a home loan, regardless of your credit, it's a
smart idea to obtain a copy of your credit report from the three
major credit bureaus and review the information. If there are errors
or things that need to be addressed, it's easier to address them
before you have found a house, than after you have found a house and
are trying to close your loan. If you know that there are a few
blemishes on your credit, let your lender know what they are, why
they are there, and why you are a still good credit risk. Lenders
look at your credit to determine how likely you will pay back the
loan. If you had extenuating circumstances - like a loss of a job or
medical bills - let them know so that they understand that it is not
likely to happen again in the future.
Get approved before you buy
An approval means that a lender has reviewed your credit history,
verified your assets and employment, and has approved your loan
before you have found a home to purchase. As long as the home
appraises for at least the purchase price, the loan should close.
Getting approved also gives you an advantage over other buyers. Your
firm approval makes it easier for you to negotiate on the price of a
home, than a person who is not approved or is pre-qualified. While
getting pre-qualified may sound official, it is really just getting
an idea of what you can afford. Its having a person plug in a few
numbers that you give them - your monthly income and your monthly
debt - and getting an approximate payment calculated. From the
payment, the calculator can approximate the house price range that
you can afford. No information is verified. Because your assets,
income or credit is not verified, a pre-qualification has little
value when purchasing a home.
Find a great buyer's agent
Traditionally real estate agents represent the sellers in a
transaction. When you are not working with a buyer's agent, they are
less likely to negotiate the best price or contingencies for you. A
buyer's agent's job and fiduciary responsibility (meaning legal
duty) is to you, the buyer. Before working with an agent, establish
if they are a buyer's agent or a seller's agent. After spending a
lot of time with a Realtor, it's natural to feel like you're a team.
But if they are not negotiating for you, then they are not on your
team.
Learn about the neighborhood
Often times the house you find may be in a neighborhood that you're
not familiar with, which is ok. It just means that you'll have to do
a little more research. If you find a house that you like, ask for a
list of the neighborhood properties that sold in the last year. How
does your home rank? Is it at the top of the price range? If so, it
might be hard to resell. Is it average or on the low end? If so,
great - as the other home prices go up in value, they will pull your
home's value up as well. Check out the schools - are they sought
after? A good school district means your neighborhood will always be
valued by families which is a great reassurance to purchase, not to
mention the value-add if you have school-age children. Next, contact
the police station and obtain crime statistics? Are they acceptable
to you? Sometimes, if they won't give them to you, it could be a
cause for alarm. Talk to the neighbors. The more people you talk to,
the better sense you will get of who makes up the neighborhood and
how they will effect your time spent in it. Check out the location
of the shopping, police and fire stations, schools, and air traffic
overhead. These are all things that might affect your property value
or quality of your life.
Protect Yourself
Ask your Realtor for a copy of the documents you will be asked to
sign if you decide to buy the house. Read them ahead of time so that
you'll understand the questions that you will be asked, the things
you need to know, and the decisions you will need to make.
Have reasonable expectations.
There is a lot of money at stake. No house is perfect. Understanding
and remembering these two statements will help diffuse the
negotiation stage, the inspection stage and the closing stage.
Emotions are high for both buyers and sellers. - The seller may have
loving memories and years of sweat equity in the house. Maybe they
are being relocated and don't want to go. Understanding their
motivations for selling will help you appreciate their situation and
predicament during these emotional times.
There is a lot of money at stake for all the parties involved (and
that includes the realtors) ...
Just remember that market value (the
value of a home) is the price that a willing buyer and a willing
seller can agree to. If you can not agree on a price, ask yourself:
Is there something you missed? Are there comparables that support
the price that they want? Are there motivations that might factor
into the price they are demanding? In the end, does it matter? What
is the house worth to you today and what do you think you can
reasonably sell it for based on the amount of time you plan to spend
in it? Think about the answers to those questions before you make
your move.
No house is perfect - Always get an inspection.
It might be a few
hundred dollars, but it's worth it. It's the inspector's job to find
any problems with the house that could cost you thousands to repair
down the road. Some inspectors have a tendency to over play the
importance of their role and the items that they find. Get objective
opinions that you trust before making a decision on an inspection
report. Likewise, if an inspector says a foundation is cracked but
its nothing to worry about - get a second opinion. Ask a handyman
for an idea of how much repairs will cost and how complicated they
are.
The home buying process is an emotional, complex and time-consuming
process, but it is worth it. Nothing compares to owning your own
home in a neighborhood.
|
|
|
|
|
|
|
|
