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Tip Number 1
Get Pre-Approved for Your Home Loan
A lot of real estate experts talk about getting ‘pre-qualified’ before starting the home shopping process, but that’s not the same thing as being ‘pre-approved’. The truth is, anyone can get pre-qualified for a loan. However, getting pre-approved means that a lender has researched all your financial information and have calculated how much house you can afford as well as how much they are prepared to lend you. Being pre-approved will save you a huge amount of time and energy, and will allow you to start looking for a home in a price range that you know you can afford. Nothing is worse than falling in a love with a home only to discover, after the fact, that you can’t afford it, or, that a bank will not loan you the money needed to make an offer on it. Buyers who get pre-approved can potentially avoid a lot of heart ache and stress.
Tip Number 2
Don’t Make Big Purchases If You’ll Be Buying a New Home
Buyers should not make any large purchases for three to 6 months before buying a new home. This is because lenders don’t want to see any chaos in your credit profile. Lenders are looking for buyers who are stable and reliable. Opening new credit cards, racking up more debt on existing credit accounts or buying a lot of large ticket items will make it a lot hard to get qualified for a good loan. So, if you know you’re going to be buying a new house, hold off on those big ticket items until after you’ve closed your mortgage loan.
Tip Number 3
Get a Survey of the Property
Many buyers don’t realize how important property surveys are. When you are buying a new home, understanding the exact dimensions of the property lines is essential. Many future disputes with neighbors or even the city or county, can be avoided by ensuring an accurate property map is available.
Tip Number 4
Don’t Fall for “Bigger is Better”
It’s tempting to fall in love with the biggest, most impressive looking house on the block. But size doesn’t ‘make’ the house. One common piece of real estate advice is to ‘not buy the biggest house in the neighborhood’. For one thing, the biggest, most expensive house on a street only will be attainable by a certain subset of buyers, and you don’t want to limit your buyers when you need to sell your house someday. Additionally, your home’s value is directly related to the values of homes that surround it. The most expensive house in the neighborhood will be limited by the appraised values of the houses that surround it. A better plan is to buy the smallest house in a neighborhood, as the more expensive houses surrounding it will help to boost its value.
Tip Number 5
Don’t Obsess About the Market
It’s easy to listen to real estate market reports that tell buyers when a good or bad time to buy might be, but, the truth is, trying to anticipate the housing market is nearly impossible. The best time to buy is when you find the perfect house and can afford to buy it. The real estate cycle tends to be cyclical, with peaks and lows. If you try to wait for the absolute ‘perfect’ time to buy, chances are, you’ll never find that elusive window.
Tip Number 6
Avoid Hidden Costs
A lot of buyers look at the difference in price between renting and owning and come to the conclusion that not only is owning a better financial move, but more economical. While this may be true, there are hidden costs to home ownership that cannot be overlooked. Expenses such as property taxes, utility costs, and home owner association dues should all be examined before buying a property. Homeowners also need to think about routine maintenance costs as well as the possibility for taxes and other dues to increase over time. Budgeting for these costs will ensure that you won’t find yourself in financial peril in the future.
Tip Number 7
Don’t Buy Based Solely on Emotions
It’s easy to fall in love with a house, but buying a property based on emotions is never a good idea. When you become too emotionally invested in a house you risk overpaying for it, or, making other shaky financial decisions. Remember that buying a house is a huge investment. Stay calm, follow your instincts, and don’t let a house break your heart…or your bank account!
Tip Number 8
Don’t Skip the Inspection
Home inspections only cost a few hundred dollars, but the peace of mind that comes with them is priceless. A home inspector’s only job is to give you unbiased information about the condition of a property so that you can make an informed decision on whether or not to proceed with the purchase. If problems are found during an inspection you can use those as a bargaining tool for negotiating a lower purchase price, or, if they are severe enough, you can decide to not purchase the property. It’s so much better to spend a little money upfront, than to find out later that your new home is a money pit with no light at the end of the tunnel.
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