Things To Know Before Buying A House

Purchasing a home can be confusing, overwhelming and make buyers feel completely broke by the time they get the keys. However, being freed from a landlord and throwing away rent payments can also be extremely liberating. From finding the best Realtor to making it through a bidding war, here are 10 things homeowners wish they knew about taking the big step into being a homeowner.

1. Get pre-approved first.

It might be tempting to start hitting open houses every Sunday, but before beginning your search, get pre-approval letter for a mortgage. The last thing you want it to fall in love with a place before being prepared and able to put offer in on it. Without this pre-approval letter, no seller will take you seriously as a pre-qualified buyer.things to know before buying a house

Research recommendations on trustworthy mortgage brokers, then set up a time to talk with each one. If they won’t provide firm information about their rates and fees, or if they start giving advice before fully understanding your financial situation, keep searching. Any good loan officer will save time and money by researching loan terms and rates that work in your best interest

2. Work with an experienced agent.

Before buying a house, going through online listings is a great start. However, don’t underestimate the value of working with an experienced real estate agent. They will help navigate the confusing process of buying a home, and once you find a place you love, they can research comparable listings, advise on what your opening offer should be and negotiate for you. And since home sellers pay all broker commissions, having an agent represent you as a buyer is FREE!

To find the best one, make a short list of possible agents based on word-of-mouth recommendations and/or internet research. Then meet with them to get a feel for their personality and their knowledge on the neighborhoods.

If you are new to the home buying process, stick with a buyer’s agent. They will negotiate, point out any problems with the house that they see, and handle potential issues whenever possible.

3. Don’t be turned off by an ugly bathroom.

A funky paint color or outdated design can cause a buyer to overlook a home that’s otherwise has tons of potential. Remember, cosmetic changes are easy to make once move in, and pointing out any dated features can actually help the negotiation process.

Instead of focusing on the pink-tiled bathroom or that ugly light fixture, pay more attention to the layout of the property, the view, the amount of sunlight rooms get, ceiling height, outdoor space and of course, the location.

4. Find out about the neighbors.

Once you find a home you love, walk the neighborhood to make sure it will be a livable situation. It also helps to visit the neighborhood at different times of the day and week to get a better feel of what life there is really like. Talk to neighbors and get their take on the area as well.

5. Be prepared to move fast.

The best properties receive multiple offers after the first open house, so it’s possible to miss the chance to submit an offer. Your agent will include your pre-approval letter in the offer so the seller knows it is serious. If there is a lot of interest in the home, write a letter to the seller explaining why you’d be the best next owner. You can even included a picture of your and your family. This is also referred to as a “seller love letter” and can work wonders to getting your offer accepted.

6. Be careful about overbidding.

If you plan on financing your home and get caught in a bidding war, beware that overbidding can come back to bite you. Your bank will require an appraisal of the home. If the appraisal comes in under the amount of the loan you need, you might have to make up the difference in out-of-pocket cash in order to complete the deal. Before you make an offer, research comparable listings or ask your real estate agent for advice. If you can, consider increasing your down payment instead of going up higher in price. Cash is king, so putting more money down can give your offer an edge over other buyers.

what to expect when buying a home7. Expect a ton of paperwork.

When applying for a loan, be ready to provide a ton of paperwork, including tax returns, pay stubs and proof of your current assets. You may also be asked to provide updated information on some of the same documents right before closing. This is not the best time to switch jobs or buy a new car, since your income and credit will be closely scrutinized.

8. Hire a home inspector.

Protect yourself and hire a professional inspector to look over the home before you compete the purchase. For $300-400, their inspection will help expose potential problems that could cause you problems and a ton of money down the road. A good inspector will attend to seemingly insignificant details. It also provides a negotiation point to ask the seller for any repairs to be made at their expense.

9. Expect to feel like you are hemorrhaging money.

It’s surprising how quickly costs add up. Fees of $200 here, and $150 there can be unexpected. Besides the down payment, there is the deposit, appraisal fee, home inspection, moving, and more expenses besides the actual buying price. Additionally, most lenders ask that a buyer has enough to cover at least two mortgage payments after closing, which means there needs to be cash in the bank. Go over all of the closing costs with your lender and agent to avoid surprises.

10. It will feel like it will never happen.

Buying a home is not easy. Finding a great place to live takes time, and once you find it, you can easily get outbid. Just remember that new listings are always coming onto the market and, eventually, there will be something you love.

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5 Responses to “Things To Know Before Buying A House”

  1. […] prequalification is really just to get you started, so you have a ballpark idea of how big a mortgage you can […]

  2. […] Don’t disregard minor repairs. Small problems such as sticky or squeaky doors, torn screens, cracked caulking, or a dripping […]

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