12 Home Buyer Tips To Make Sure You Are Prepared To Buy
Whether you are a first time home buyer or looking for a vacation home, these 12 homebuyer tips will ensure you are prepared to make an offer when you find the home of your dreams.
In my 2 plus decades of business, I can tell you countless stories of buyers who put the cart before the horse.
Don’t make that mistake by looking at homes online, then making appointments to see them without being prepared to make an acceptable offer.
Remember, you are not the only buyer looking at that home.
- Check Your Credit. Getting pre-approved or pre-qualified for a loan is an essential step. Most people think it’s all about their income. But there are several factors banks will consider including your debt to income ratio, student loans, child support and more. Know what a lender is willing to lend you so you look at homes in that price range.
- Calculate your Closing Costs. Many buyers dont consider this cost of home ownership. There is a down-payment, but you also need to figure anywhere from 2 to 5% of the loan amount for closing costs. Sellers may contribute to your closing costs, but in a strong seller’s market, that is highly unlikely.
- Consider Your Moving Expenses. Remember you will more than likely have to hire a moving company or at the very least rent a moving van. However, in addition, you will need to set money aside to do home repairs, upgrades and buy furniture.
- Research Home Buyer Assistance Programs. Cities and counties typically have home buyer programs which can help with down-payment assistance and closing costs. Find out what’s available to you and how you can qualify.
- Shop and Compare Mortgage Rates. Applying for preapproval from more than one lender to shop rates should not hurt your credit score as long as you apply within a limited time (i.e. 30 days). You may be surprised at the difference in rates between lenders.
- Get A Pre-Approval Letter. When you make an offer, you will need to submit this with the offer so the seller’s agent and the seller can review your ability to secure a loan to purchase the home.
- Location…Location…Location! Not all neighborhoods are equal. Do your research into each community. Visit the community at night when residents are home to get a better idea of the area and subdivision. You will need to sell that home at some point in the future and you need to make sure you made a solid investment.
- Attend Open Houses. With today’s Covid-19 pandemic, many real estate agents have turned to virtual home tours, or online live tours via Facebook. But if you should go to an in-person tour, be sure to really look at the home and don’t let your emotions overtake a conscious assessment of the property.
- Research Home Owners Insurance. If you are seeking a loan, the lender will require homeowners insurance. That could also include flood insurance. Be sure to ask your agent or the seller about their elevation certificate and current insurance costs. And don’t assume you will be paying their rates because you won’t. Get your own quote.
- Never Skip A Home Inspection. Depending on your loan, you may need to do more than a full home inspection. Some loans, will require a septic and/or well, water tests, and even a 4 point wind mitigation for your insurance. If there are big ticket items that need repair or replacement, you should renegotiate the sales price with the seller.
- Hire an agent. Buyers typically don’t have to pay to hire an agent. That cost, if the property is listed, is paid for by the seller. So don’t get burnt, hire an expert.
- Negotiate Your Offer. Your agent should be able to suggest a fair opening offer price based on recent sales comps and other factors for the home you choose. Remember, to get to the closing table the buyer and seller must have a meeting of the minds. Sometimes its more than just the price of the homes. There may be other factors that could make your offer more acceptable to the seller.