Determine how much home you can afford.
This really should be your first step. It is easy to get excited about all the great homes you will come across in your home search. However, you want to be realistic about your finances. This is the time to sit down and create a household budget so that you are clear on your total expenses and other obligations. Also, factor in obligations that may likely kick in the next few years. If you are starting a family, daycare can be a major monthly expense. If you plan to increase your savings for retirement or college, make sure you have room for that in your budget.
Check your credit.
I would definitely recommend checking your credit when you decide it’s time to start your search for a new home. Order your credit report from all three of the major credit reporting bureaus – Trans Union, Experian and Equifax. If there are errors, you can get them fixed. If there are any negative items, now is the time to see how you can address them. There are steps that you can take to improve your credit score.
Get pre-approved for a loan.
Getting pre-approved for your loan is a win-win situation. Most sellers expect buyers to already be pre-approved when the offer is made and so it may give you a competitive advantage over other buyers. For you, it lets you know how much of a loan the bank is willing to give you. It also means that your credit history, income and employment has already been reviewed by the bank. I will caution here, however, that you need to compare the estimated mortgage payment form the bank (including taxes and insurance) against the budget you have already prepared. Ask the tough questions now about your budget before you fall in love with your dream home.
Know What You Want
Identify the features that are important to you in your new home. How many bedrooms or bathrooms are needed, level of updates, attached garage, or finished basement? Does the neighborhood provide what you and your family need -- desirable homes in your price range, decent schools, acceptable commute time to work? Decide on those things that are non-negotiable. In addition, are there changes to your family that will impact your living situation in the near future. These changes may include room for an elderly parent, a new baby, or a need for a home office.
Find a great agent.
You should expect stellar service from your realtor. It is important that your realtor will listen to your needs, map out a plan for your home search, communicate with you regularly, manage the details of your real estate search and negotiate in your best interest.
Get a home inspection.
No matter the condition or age of the home, you should get a home inspection by a qualified, certified home inspector. The cost upfront is worth it for your peace of mind. The inspection will tell you whether repairs are needed and the cost of them. A good inspector will educate you about the systems in your home and tell you the age of your mechanics. This information may come in handy during the negotiation phase with the seller’s agent.
Hire a real estate attorney
This is a legal contract that you will be signing. You need to make sure that your interests are protected and a good real estate attorney will be helpful. Your attorney will be an additional advocate to protect your interests. You may want to add modifications to the offer and an attorney makes sure that this is done most effectively.
FINALLY, ASK QUESTIONS IF YOU HAVE THEM
In this transaction, like any other, read the contracts and ask questions if there is any confusion on your part. Make sure you understand the terms of the loan. Make sure that you understand the contract. It is your signature and you need to make sure that you are well informed throughout the process. I will make sure that the process is as smooth as possible but if you need additional answers, ask.
Are you planning to buy? If you have any questions about the home buying process or real estate in general, feel free tocontact me.