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10 Things You Need to Know When Buying a Home

     
April 21, 2014  |  Real Estate

1. Don’t buy if you have no plans of staying put in one place.

If you can’t commit to or at least decide on planning to remain in one place for at least a few years, then owning a home is probably not for you, at least not yet. Buying a home and living in it for only a short time will cost you serious finances. Selling a home too soon may cost you to end up losing money even in a rising market given the transaction costs of buying and selling a property. When prices are falling, it’s an even worse proposition.

2. Start the process by stacking up your credit.

Make sure that you have a good credit history, as clean a possible. This is crucial especially if you are getting a mortgage to purchase your home. A few months before you actually start your home search, get copies of your credit report. Ensure that the facts are correct, and if any errors or problems, fix them ASAP. Talk with a lender for your pre-qualification as early as possible so you would know where you’re at.

3. Only buy a home you can really afford.

How do you know that you can really afford a home? The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. Still, it’s always better to be armed with sufficient knowledge on financing, loans, mortgage, rebate programs, and other information related to expenses in home ownership. There are never too many calculators available online to get a better know on how your income, debts, and expenses affect what you can afford in purchasing a property.

4. If you don’t have the usual 20 percent down, you may still qualify for a loan.

There are many lenders, private or public, who can help you with this.  If you qualify, those with extensive loan programs could offer low-interest mortgages that require only a small down payment.

5. Buy in a good school district.

In most areas, this advice still applies strongly even if you don’t have school-age children. Why? Think long-term, have a goal in mind. When it comes time to sell the house, you’ll learn that strong school districts are a top priority for many home buyers, and meeting this requirement helps boosts property values. Adds credit to your selling points.

6. Get professional assistance from the best in real estate.

True enough, the Internet is the go-to guy in everything nowadays. It seems like nothing or no one can beat Mr. Google and all the places online he directs us to. In home buying for instance, the Internet gives buyers unprecedented access to home listings anywhere, anytime. However, most new buyers (and many more experienced ones) are better off using a professional agent. It saves you the time of looking, gives you a clearer idea of what you want and how best (and easiest) to get it; strategizes offers, comparisons, and market trends; and all other things that only a pro in this industry can help you with. Look for an exclusive buyer agent who will have your best interests at heart and can help you with strategies particularly during the tricky stage of the bidding process.

7. Choose carefully between points and rate.

Points versus rate is for choosing a mortgage. You usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the house for a long time — say three to five years or more — it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.

Making an offer too is much easier if you have already been pre-approved. This will also narrow down your search, decreasing the chances of you being confused and overwhelmed with choices because of the price range that you can stick to. It will save you the heartache of looking at houses you can’t afford. You will be looking for a home that actually fits right into your price capability, mortgage-wise. Being pre-approved also puts you at an advantage when making an offer especially if there is some competition of interest over a property. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

9. Be diligent with your research before bidding for a home.

Remember that your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making an offer for a bid, check the sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, then you should make a bid (smart move) that’s about eight to 10 percent lower than what the seller is asking. Now we connect this to the importance of getting professional help in your home buying process. With an agent in the picture, this checking and canvassing not only become less of a hassle for you, but you can be updated with the latest market trends in real estate.

10. Get a home inspector.

Yes, your lender will require a home appraisal regardless. But that’s just the bank’s way of determining whether the house is worth the price you’ve agreed to pay. For you personally, you should hire your own home inspector. Someone with experience in doing home surveys in the area where you are buying. The home inspector’s job is to point out potential problems that could require you to shell out on costly repairs down the road.

 

The Blake Team specializes in working with Buyers & Sellers, foreclosures/HUD, short sales, and luxury properties. They are a full-service real estate company offering the most comprehensive real estate services in the market.

For homes available on the market from foreclosures, Short Sale, and HUD homes to standard listings, luxury homes, and third party properties, check out www.findalldenverhomelistings.com

 

Source: CNN Money

 

About the author

The Blake Team is a full-service Real Estate team based in Aurora, Colorado specializing in working with Buyers & Sellers, foreclosures/HUD, short sales, and luxury properties. A team with years of experience and an impressive success rate that made it the No.18 real estate brokerage in the nation, as well as the No.1 Keller Williams agent in Colorado led by CEO & Founder Lisa Blake. The Blake Team is your No. 1 choice for getting your dream home!