Tips for Home Buyers
Buying a home is one of the biggest private investments you can make. If you're organized and in control, you'll have a better prospect of getting the best home deal possible with the least amount of stress. Follow these simple tips for better results in getting your piece of the American Dream:
Don't Make Any Major Credit Purchases Right Before you Buy a Home
Do not go on a spending spree using credit if you are considering purchasing a house, or in the process of purchasing a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation. Every $100 you pay per month on a credit payment could cost your about $10,000 in home eligibility. The last thing you need is to know that you could have bought a new home had you curbed the urge to spend.
Be Wary About the Listing Agent-Choose a Realtor who represents You
Traditionally, buyers would stop at a home for sale, call the telephone number on the sign, and be shown the property by an agent sitting there. However, the problem with that system is that the agent sitting there's normally the listing agent. Generally, he or she represents the seller, unless they're employed as a trade agent, in countries that allow brokers to represent both parties. Be cautious of what you say to a listing broker. A listing broker's role is to locate a buyer, and to get as high a price and as good terms as possible for the vendor. Unless employed as a transaction broker, he or she is required to notify the seller of any facts that may influence the seller's decision about whether to accept an offer or not.
Always bear in mind that you want the lowest cost and the best conditions. If an agent isn't directly working for you, they might well be working against you.
Pre-Qualified vs. Pre-Approved
It used to be that buyers could go house shopping and when they've found their dream home, then they go to find pre-approved. However, in the current market, that has been shown to be among the least effective methods in landing the dream home.
Most creditors can pre-qualify you to get a mortgage over the phone. But being pre-qualified and pre-approved are various things. Pre-approval means that you've applied for a mortgage; you have filled out the mortgage application, received your credit report, and verified your employment, assets, etc.. When you're pre-approved, you understand exactly what the maximum loan amount will be. Becoming pre-qualified doesn't count for much if you're competing with other buyers that are pre-approved. When you're pre-approved, you and the seller know exactly how much home you can afford. It gives you credibility as an interested buyer and lets the seller know immediately that you will qualify for a loan to purchase their property.
Build a Plan of Action and Get Ready
Before you can create a plan of action, take the time to lay the groundwork to your decision-making procedure.
First, ask yourself how much can you afford to pay for a house. If you are not sure on the purchase price range, find a lender and get preapproved. Preapproval will inform you how much you can afford so you can search for homes in your price range. Getting pre-approved helps you to alleviate some of the anxieties that come with home buying. You understand just what you qualify for and at what rate, you know how large your monthly mortgage payments will be, and you know how much you will have for a down payment. As soon as you're pre-approved, you avoid the frustration of finding homes that you think are perfect, but aren't in your budget.
Second, ask yourself where you would like to live and what's the ideal place for you and/or your loved ones. Things to consider:
- convenience for all family members
- proximity to work, college
- offense rate of neighborhood
- local transport
- forms of homes in neighborhood, such as condos, town houses, co-ops, recently constructed houses etc..
Importance of Inspection
As a buyer, you're entitled to know precisely what you're getting. Do not take for granted what you see and what the seller or the listing agent tells you. A professional home inspection is something you MUST do, whether you're buying an existing home or a new one. A review is an opportunity to have an expert look closely at the home you are considering purchasing and getting both an oral and written opinion as to its situation.
Make certain the report will be done by a specialist. Not only should you never skip an inspection, but you should also go along with the inspector during inspection. This gives you a opportunity to ask questions about the property and get answers that aren't biased. Additionally, the oral comments are typically more revealing and detailed than what you will find on the written report. When the review is complete, review the inspection report carefully.
You need to demand an inspection when you present your offer. It has to be written in as a contingency; if you don't approve the inspection report, then you do not buy. Most real estate contracts automatically provide an inspection contingency.