Think that you are ready to buy a new home? If so, here are five best practices to implement in preparation for the new home buying process:
1. Get your credit and personal finances in order.
A great place to start is getting a full picture of your credit. You will definitely want to obtain copies of your current credit report. Also, be sure the details are correct, and consider fixing any potential problems you may find.
Next, find a reputable mortgage lender, apply and get pre-approved for a home loan. This will put you in the best financial position to make a well-priced offer when you find the perfect house.
2. Choose a house payment you can comfortably afford.
Just like engagement rings, there’s a smart rule of thumb to go by when buying a home: approximately 2.5 x’s your annual income. There are a number of mortgage planning tools and loan calculators online that can show you how income, debt, and recurring monthly expenses affect what you can afford.
Remember, there are considerations beyond the sticker price, such as property taxes, energy costs, insurance, annual maintenance etc.
3. Hire a real estate professional to assist.
While the web offers home buyers access to home listings and online resources, many aspects of the home buying process require a level of home buying expertise you can’t pick up from surfing the internet.
Most often you’re better off using a professional real estate agent than hacking through the home buying process alone.
Where possible, consider recruiting an exclusive buyer’s agent who will have your personal and financial interests at the forefront of the purchase. Also, don’t be afraid to ask them to help you with negotiating strategies during the buying process.
4. Research the local community and surrounding area.
Before making your first bid on a property, do some due diligence to determine the temperature of the local real estate market.
Are the current conditions more favorable for home sellers or buyers?
Always make note of sales trends of similar homes in the area or neighborhood.
Be sure to look at home prices for the last few consecutive months to come up with an asking price that’s competitive and realistic.
5. Think of your purchase as a long term investment.
You shouldn’t buy unless you’re sure you’ll be staying put for at least a few years, but beyond that you should always buy in a neighborhood with good schools as this will have an impact on your home’s resale value later.
As for the house itself, you should plan to hire your own home inspector that can point out potential problems that could require costly repairs down the line.
The details to every home purchase are going to be different, but if you stick to these 5 home buying best practices you will have a head start on a successful new home buying experience.