Buying a home is one of, if not THE biggest, most important purchase of your life. After all, it is both exciting and scary when making a purchase worth hundreds of thousands of dollars. Your decision to buy a home should be made after you have carefully considered what you want and need in a home. Only then will you be educated and prepared enough to go forth and make a good investment.
Know What You Can Afford
One of the first and most important things you should do prior to even looking at houses, is determine what you can afford. There is absolutely nothing worse than finally finding the home of your dreams only to determine later on that you really cannot afford to buy it. Meeting with a mortgage lender will help you to determine what you can afford in a monthly payment and what kind of mortgage is right for you. There are many different kinds of mortgages available and depending on your current needs and future earning potential, a mortgage lender can explain your options and help you determine which one is best for you.
In addition, the mortgage lender will pre-approve you for a loan. Therefore, when you find the perfect house, your paperwork is complete, allowing you to move quickly with a bid. Being pre-approved and ready to move forward can give you an important edge when competing for a home with other buyers.
It’s important to note that when determining what you can afford for a monthly payment, you should consider other important monetary factors, including: college savings, retirement, home repairs, maintenance, and improvement, as well as homeowners insurance and taxes.
Determine What You Want Out of a Home
Knowing what you want and need out of a home will not only save you time, but it will help your real estate agent narrow down your search. It’s a good idea to make a list of the most important characteristics you are looking for in a home prior to meeting with your agent. For example:
- Location – What are your specifications pertaining to your work commute? How important is your proximity to shopping (food stores, convenient stores, etc.)? Do you want to be in a neighborhood or would you rather be in a rural setting? Is the area safe (crime)? Would you rather live in the city or county?
- Size: Do you want a home with 2, 3, 4, or 5 bedrooms? How many bathrooms do you need? Do you need an office? Do you need a large yard or would you prefer a yard that doesn’t require much maintenance?
- Features: Do you want a garage; a deck, a finished basement; a big kitchen; a huge master bathroom; a beautiful view; a fenced in yard; gas, electric, or oil heat; central air conditioning; storage attic; big closets; contemporary vs. traditional architecture, etc?
- Schools: If you have children or are planning on starting a family, what public schools or private school are close by? Are they good schools?
Know what factors are important to you and which one you could compromise on if necessary. For example, if you know that your kids will be going to public school, make sure the school district meets with your approval. You don’t want to have to move in three years when you find out that you are zoned for a school that does not meet your expectations.
Educate Yourself on the Current Real Estate Market
The best way learn about what you want is to look at what’s out there now. It’s important for potential homebuyers to get an idea of the current market climate. Studying the market gives you invaluable information on how fast or slow you need to be in both buying and selling your home. Market trends reveal a lot about the mindset of those selling their homes. For example: If it’s a "Buyer’s Market," you may have a greater chance of getting a great deal on the perfect home.
A great way of seeing what’s out there is by surfing listings on the Internet. The Web is a wonderful resource for home buying, giving you a plethora of diverse information at your fingertips. Local real estate sale books, as well as local newspapers are also a good source of current information.
Find a Real Estate Agent
Finding a real estate agent you like and trust is important. You want to make sure that you have someone that you feel will be looking out for your best interest. Buying a home without an agent is an option; however using one will give you the greatest exposure to what the market has to offer. In addition, your agent takes care of getting you prepared for closing and settlement.
Essentially, real estate agents do all of the leg work — weeding out the properties that meet and do not meet your qualifications. Also, they have access to a huge database of listings which are constantly updated and often know of homes available for purchase prior to being listed.
It is also possible to use an agents help when buying a home directly from the seller. In these cases the agent will get "recover fees" from the seller and only charge one half of the commission that they usually charge. You will pay the "recover fees" to the agent at settlement.
Happy house hunting!!!