Buyers

Setting realistic expectations begins with determining how much home you can afford. One of the biggest mistakes homebuyers make is beginning the process of looking at homes without knowing if they can qualify for a new home and how much they qualify for. Time is our most precious commodity and no one wants to waste any.

Put yourself in the seller’s shoes. They don’t want to waste their time and miss out on any other offers to only find out you are not qualified to buy their home. Most sellers will refuse to accept any offers without a loan prequalification letter, which is simply a statement from a lender indicating you have been pre-qualified for a mortgage.

That is why you should start the process by talking with a mortgage lender. A lender knows what information to collect from you, how to run a credit check and how to determine if you are in a position to buy a home. Imagine spending weekends looking at dozens of homes only to find out you are 12 months away from making your dream of homeownership a reality. In the event you are not able to qualify for a home, a qualified lender can help map out a plan to ensure you are in a position to buy in the future.

It’s similar to going to the doctor. In order for them to accurately diagnose your condition, they need to know everything about your health and medical history. You don’t want to have the wrong procedure performed on you or be prescribed the wrong medicine because you didn’t tell them everything.

Also, just because you talk to a specific lender doesn’t mean you have to use them. You always have the flexibility to talk to other lenders at any time to ensure you get the best possible loan program available. With that being said, there are many lenders to choose from and it may be overwhelming sifting through all of them as you consider who is the right fit for your unique situation.

The best place to start is with your REALTOR® or real estate agent. They generally have close relationships with several mortgage lenders and are in the best position to offer a qualified recommendation.

The home buying experience can be challenging. Having a lender and real estate agent who have a great working relationship is ideal for minimizing stress and confusion. However, keep in mind that you are not required to use any lender your real estate agent recommends. The choice is yours.

One of the greatest real estate myths out there is the notion you can save more money when purchasing a home by doing it alone. Statistics suggest that this notion couldn’t be further from the truth. Statistically speaking, most buyers will end up paying more for a home without the expertise and negotiation skills of an experienced licensed REALTOR®. In addition, in almost all home buying cases, the seller pays for your real estate broker’s commission. So, it will cost you nothing to have a real estate expert in your corner. Imagine your doctor forgoing payment for your next medical procedure.

There are many steps to buying a home. The most important step of them all is finding the right properties to consider. Your real estate agent has access to the area Multiple Listing Service which is an online database that gives them access to every home in the area that has been listed by another real estate agent. Keep in mind that the majority of homes for sale are listed with a real estate agent.

Though there are many consumer sites you could use, such as Realtor.com, Zillow.com or Trulia.com, the Multiple Listing Service is the most detailed and up-to-date database of all available homes. Don’t waste your time on these other sites becoming excited about a property only to find out it sold two years ago. Data is everything. Why wouldn’t you want access to the most accurate list the homes for sale?

After determining the number of bedrooms, bathrooms, size and specific features you are looking for, your real estate agent will be able to provide you with a detailed comprehensive list of all available homes that meet your specific criteria. Now you can choose which homes you want your agent to show you. In addition, your agent will have access to these homes to show you at your convenience.

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There are also many other steps associated with closing on a home, such as opening escrow, obtaining a title report, ordering a termite and home inspection, ordering utilities, ordering homeowners insurance and so on. You can’t afford to miss any of these important steps. Your real estate agent’s primary goal is for a seamless close on your new home and will help you ensure no stone is left unturned.

Having an experienced real estate professional representing you is your best bet in ensuring no mistakes are made and that you and your family are not taken advantage of. Imagine being charged of a crime and facing the prosecutor in court without your own representation. Chances are you would not know all the nuances of navigating a courtroom and your outcome would likely be less than ideal. Remember, in a home buying scenario, the other side will pay for your agent’s fees.

Smart homebuyers understand the importance of knowledge and utilizing all the tools available to them. An experienced real estate agent will make sure you have that knowledge, understand the entire process of buying a home and make sure you are equipped with the necessary tools for a successful close on your next home.

There are so many factors to consider when finding the right home, especially when kids are involved. All parents understand that location is everything. You will need to determine what neighborhoods fit your family’s lifestyle needs and what type of schools and districts offer the best education opportunities for your children.

It’s very common for prospective buyers to ask their real estate agent about neighborhood safety, demographics and quality of schools. Though your real estate professional can help you determine what neighborhoods and areas have a better chance of holding their values, Fair Housing Laws limit your agent from answering certain types of questions regarding neighborhoods. It’s important to do your own homework.

When it comes down to determining neighborhood safety, you may want to consider contacting the local police department and request information on crime statistics and types of crimes committed that may be common in your desired neighborhood. Websites such as www.familywatchdog.us and www.spotcrime.com are also great online resources.

If you have children of school age, you will need to consider what schools you would like them to attend, whether private or public. Your real estate agent should be able to provide you with a list of available websites that can provide you detailed information on schools and school districts, such as ratings, designations and any awards received based on performance. Check out local schools. We recommend checking out GreatSchools.org.

Please note that it is “illegal” for your real estate professional to make any comments or answer any questions regarding race, color, religion, national origin, sex, disability and familial status relating to any areas or neighborhoods. Your REALTOR® can find themselves in a lot of hot water and set themselves up for a lawsuit by answering such questions. However, they should be able to point you in the right direction to help you do your own homework and form your own opinions.

Also, you may want to consider taking a drive through any neighborhoods that you are thinking about moving to. Driving through at different times of day is also helpful to see the activity of a neighborhood. This may help answer any questions you have about certain areas and neighborhoods.

Most homebuyers understand they will need to have a down payment in order to close on their new home. They factor this amount, save and hopefully have access to those funds when the time comes. However, many buyers, especially those who do not have the convenience, advice and access to a REALTOR®, fail to realize there are other fees associated with a home buying transaction above the down payment. In some instances, homebuyers lack these additional funds to close on their new home and find themselves in jeopardy of losing the home and forfeiting their earnest money, which could be thousands of dollars. These fees are referred to as closing costs and/or pre-paids. Some of these additional fees and costs may include:

• Lender fees
• Impounds
• Taxes
• Appraisal Fee
• Credit Report Fee
• Escrow Fee
• Title Fee
• Homeowner’s Insurance Fees
• Homeowner Association Fees
• Recording Fees

Though the fees may seem endless, take comfort in the fact these fees are normal in any home purchase transaction. You may be wondering how much additional money you should expect to have to close on your new home. Unfortunately, each property and transaction is unique and there is no way to provide an exact amount. For instance, is some scenarios, you might be able to get the seller to pay for some of these fees. This would obviously change your out-of-pockets costs.

This is where your real estate professional comes in. They will be able to help you estimate your closing costs as well as ensure your lender provides you with a Good Faith Estimate (GFE). Your agent or escrow officer can go over the GFE line-by-line so you have a clearer picture of all costs associated with your home purchase.

Again, setting realistic expectations is an important part of the home buying experience. This is where you put the concept to paper. It’s time to write down the items and amenities you simply “want” and from those you “must” have in your next home.

This starts by compiling a list of “musts” and “wants” for your new home. “Musts” are those items and amenities that absolutely must have in the home. You could refer to them as deal breakers. A deal breaker is something that will “kill” the deal as far as you are concerned. Examples of deal breakers may include the size of the home, where the laundry facilities are located, whether the home has a basement or whether the home has a pool. Make sure that your “musts” list isn’t too long. There is no such thing as the perfect home.

Now it’s time to compile your list of “wants.” These are features that you would like in the home, but may not be considered to be deal breakers. Examples of “wants” may include window coverings, ceiling fans, type of counter tops and flooring. Again, avoid making the list too long and extensive or you run the risk of making the home-buying experience too long and drawn out.

When it’s time to go looking at homes, make sure to bring both lists. As you walk through a home, begin to check off the features that are included on your “musts” and “wants” lists. This will help make the final selection process easier.

It’s very common to look at several properties during each outing and the properties can begin to run together in your mind. In addition, it’s likely that you may have a difficult time remembering the details of each property. You will want to take detailed notes for each property so you can remember what you liked and disliked about each property.

As you view a property, write down anything that you notice. For instance, the color of the carpet, type of flooring, whether the master bathroom has a separate tub and shower, what appliances come with the house and the type of landscaping is in the front yard. Don’t hesitate to take pictures of the properties you view. You can even name properties to make it easier, like the “Green Carpeted House.”

Another helpful strategy to consider is rating each home you view on a scale of 1 to 10. The rating system should primarily be based on your lists of “musts.” This will allow you to quickly eliminate any properties that don’t meet your needs.

As you can imagine, the list of tasks and considerations to make when purchasing a home appears endless. The entirety of the process can be overwhelming and divert your attention away from what really matters – finding the right house for the right price for you and your family.

As your agent, we are committed to helping your dreams of homeownership come true. We will not only help you avoid the costly pitfalls and mistakes other buyers make, we will make sure you understand the home buying process and make that process as seamless as possible. Our goal is to protect you and your family’s financial future can get you into your next home. Learn more about purchasing your dream home.

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