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The Next Steps of Home Buying After You Have Received Financing

f14247cac78646879e79110a32a4c0e3In the beginning of the month we discussed that obtaining financing for a home completes the first piece of the puzzle, as featured in the article, “Thinking of Buying a Home?  Follow These Tips.” The second part of that equation is a bit more entertaining: it’s time to shop for a home.  Your search has now been narrowed down as your lender has determined how much how you are suited to buy.  By obtaining financing, you have a better chance of having your offer accepted on the house in the case of competition.  This time around we will discuss effective methods of shopping for a home.

Find the Right Buying Agent:  A buying agent can provide you with information that you otherwise would not have access to.  Buying Agents receive an updated daily feed of home listings for sale in your price range and the area that can fit your needs better than if you went out to find a home on your own.  Ask friends and family for a referral to a buyer’s agent, and then ask your agent how long they have been a buyer’s agent and whether they work part time or full time.  These are important questions as some agents simply work in Real Estate on the side so that they can add an extra $10,000 a year to the salary at their main job at the end of the year.  If it is a side job, their heart is most likely not in it and therefore they might not have your best interest at heart.  Find someone whom you feel you can trust—typically a friend or family referral can help with that.  Lastly, ask your agent to look at the homes before they ask you to view it to make sure that they fit the guidelines you are requesting.  Don’t waste time viewing open houses that don’t fit the requirements you have set.

Your Timing May Give You an Advantage: We all know that it is best to buy expensive winter sports equipment at a discounted rate during the off season, and home buying mimics the same trend.  Sure, it may not be ideal for you to move in when there are frigid temperatures outside, but it just might be ideal for your wallet.  Studies show that real estate picks up in the spring as it is comfortable outside and not to mention a time of new beginnings.  House shopping declines in the fall and drops off alongside the temperatures in December.  However, it might be wise to withstand the temperatures as there is less competition trying to score the same house, and also you will be way more likely to negotiate a deal on the house during the off season as sellers are more desperate to get rid of the home.

Separate Your Wants and Your Needs: The dreadful question: “Do I need this?”  We have probably all been taught by our parents to separate wants and needs at a very early age in life.  As managers of our own bank accounts in our adult years, sometimes we want to stray away from that lesson. When purchasing a home, do not by any means stray away from this notion.  Obtaining financing before shopping can most likely hinder the inclination to buy something too extravagant as it provides a realistic approach to what type of home you can afford.  Focus more on the floor plan that you will need if you plan to have children or animals in the house, rather than the extra amenities that simply would be nice to have.  Set guidelines that are absolutely required before going shopping to avoid getting caught up in a deal that is way beyond your needs.  Consider the bills and cost of upkeep associated with unnecessary amenities.

The Location Aligns with Your Needs:  What do you look for in the city or town that you live in?  Nearby hiking, dog parks, public transit, the beach, a sense of community, proximity to your job, skyscrapers, shopping, country clubs?  Make sure that it aligns with the places you enjoy or otherwise you might get sick of it too fast and will want to move out before you have gained equity on your home, causing you to lose money.  Upscale retail stores imply affluence in the community, which my indicate job growth as well.  Also, check for the cleanliness of the area to gain an understanding of how well the city takes care of the area.  Knock on people’s doors and pick their brains on what it is like to live in that area.  Definitely get information on crime rate and traffic while you are at it.  Research the crime rate online to double check.  Make sure you are in proximity to the hospital, fire department, and police station in case of emergency.  Once you have gathered all of the information that you need, come up with a pros and cons list.

The Quality of the School District Matters…Even if You Are Not a Parent:  School districts are a strong force on the price of housing.  Houses are valued at a higher price when they are in a better school district, which will be good for you if/when you ever decide to sell the home so do your homework on the school district before you buy.  No pun intended.

Figure Out How Much Your Offer Should Be:  Find out how much other similar homes in the neighborhood have sold for.  Ask your buyer’s agent or your lender for this information.  Determine whether you are getting a deal based on whether similar homes have sold for higher or lower prices than the current asking price of the house that you are interested in.  If the other homes were sold for less than the asking price of the home that you have your eye on, make an offer about 5-10% less than what the seller is asking for.

After You Have Found The House and Have Done Your Research:  Make an offer, and have a home inspector walk you through the house to show you any current or potential future issues with the home.  Make sure that the buyer’s agent has included a section in the purchase agreement stating that if something does not go well based on the inspector’s findings that you can either back out or work out a lower price.  Having an inspector walk you through the home is crucial to the deal, because certain problems with the home can put you into severe debt.  If possible, try to visit the home with your inspector after a rainfall to check if there are any leaks throughout the house that may one day be very costly.  Some of you might be hesitant to spend the money on a home inspector as you will be charged again by the lender for a home appraisal, but the home appraisal is not meant to serve you as well as it is meant to serve the lender to gauge how much your home is worth.  An inspector will serve you to forewarn you of any problems with the home.   Do another walk through with an inspector before the deal closes to make sure that the home is still in the same condition as it was when you decided to purchase it.

Upon Closing: Obtain home insurance.  Typically, when you bundle your automobile insurance and your home insurance, your insurance provider will offer a (significantly) discounted rate.  Also, obtain title insurance.  Title Insurance protects you from financial loss if anyone else claims title on your property due to matters such as title defects or liens.  Title insurance is very cheap, and the premium on it only has to be paid once.

If you have any questions about the information herein, feel free to reach out to the Author, Brittany Williams, at Brittany.williams@broadviewmortgage.com.  If you would like a quick preapproval Click Here, and for assistance with down payment or buyer assistance Click Here.  You are also always free to give us a call Toll Free (855) 692-7623.

 

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