There’s a lot to know if you’re thinking about buying a home. Here are 10 tips to get you started:
1. Know what’s important to YOU
Beyond bedrooms, bathrooms and square footage, what about other criteria? A water view? Something close to work? Resale value? Condition/building quality? Security? School system? By figuring out your criteria early on, you’ll save hours or even days in your home search, and I’ll be able to help you focus on the best fit for you as quickly as possible.
2. Get help from a pro
Even with all the information available to you through the Internet and newspapers, you’ll likely be better off working with a professional agent. By knowing what to look for and what to avoid, I can help with the selection/evaluation process to find value that may not be readily apparent. I can also show you comparable sales to help guide your initial offer and use proven negotiation techniques on your behalf for a successful bidding process.
3. Get pre-approved, not just pre-qualified
A mortgage pre-approval takes a little more effort to get than a pre-qualification, but it will give you a realistic idea of what you can afford and give you more leverage in negotiations. Because there’s greater confidence that you can close the transaction, sellers will often show preference to you over a buyer who only offers a pre-qualification.
4. “Location, location, location”
Why is this the mantra of real estate pros? Because a great location can increase your home’s value, while a bad one will drag it down. The other side to this important concept is that real estate is local, so instead of focusing on national real estate headlines, be sure to work with someone who knows what’s happening in your neighborhood.
5. Recognize that it’s impossible to “time the market”
One of the biggest mistake buyers make is waiting for the “perfect” time to buy. There’s simply no way to know precisely where the market is going at any given moment. So while you’re waiting on the sidelines hoping for even better opportunities, you’re also missing out on important homeowner benefits.
Here’s a better question: Are you financially and emotionally ready to be a homeowner? If so, then it’s a good time to buy. Instead of renting while you try to “time the market,” buy now and begin building equity, getting tax deductions and enjoying the many other advantages of ownership.
6. Do your homework before you make an offer
It’s hard to recognize a good deal if you don’t know the market. By analyzing recent sales and current listings, I can keep you informed about what’s overpriced and what’s a great value so that you can act when the right property appears.
7. Be ready to pounce
Elizabeth Weintraub writes about the “Red Shoes” experience of home buying:
Say, you need a new pair of red shoes. You go to the mall. At the first shoe store, you find a fabulous pair of red shoes. You try them on. They fit perfectly. They are glamorous. Priced right, too. Do you buy them? Of course not! You go to every other store in the mall trying on red shoes until you are ready to drop from exhaustion. Then you return to the first store and buy those red shoes. Do not shop for a home this way. When you find the perfect home, buy it.
Besides draining your time and energy, this approach often leads to disaster. Reluctant buyers may find that by the time they decide to come back, other buyers are now interested, or even worse, the property has already been sold. Don’t be the buyer who ends up not getting the property they now realize was perfect for them. When you find what you want, be ready to act!
8. Know How to Make a Successful Offer
A lot of people think the best way to make a bid is to low-ball the seller and hope they’re desperate. Over and over, I see buyers on the other side of a transaction end up paying more for a property in the long run because they take the wrong approach in the beginning.
If you know what price similar homes have sold for recently, you can use that data to make an educated lower offer that’s defensible and won’t offend the other party. More often than not, you’ll end up with a better counter offer and a lower final price. After all, it’s a lot harder for a seller to argue with hard numbers than with someone just looking for a “steal.”
As your realtor, I can help you determine an effective initial offer based on sales of comparable homes, how often the property has been shown, any past offers and whether or not you’ll be competing against other buyers.
9. Get a quality home inspection
Paying for a qualified home inspection isn’t just for peace of mind—it’s absolutely essential for anyone who wants to know exactly what they’re getting. This can help you avoid surprises after the deal is closed.
10. Get a good-faith estimate of closing costs
Many first-time homebuyers are unprepared for the costs involved with completing the transaction. Early on (even if you don’t have a contract yet), ask your mortgage consultant for a good-faith estimate of closing costs to avoid surprises. Once the contract is signed, a preliminary HUD-1 settlement sheet will provide details on all the costs and charges involved. Be sure to obtain this document and review it with your agent and/or attorney.
Buying a home is a complex process, but can be a lot less stressful if you’re working with an experienced real estate professional who understands your needs. If you have any questions, feel free to contact me and I’d be happy to help.