| Finalize the decision to buy |
| Calculate the affordable Home Value |
| Create Wanted Feature List |
| Check your credit |
| Select the Location(s) |
| Find a great buyer's agent |
| Get pre-approved for mortgage |
| Search for THE Home |
| Learn about the Home |
| Learn about the neighborhood |
| Protect Yourself |
| Have reasonable expectations |
| Under Contract and Closing |
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| Finalize the decision to buy |
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For first-time home buyers, this is very important. Generally, if the price of the house
is not more than 20 years rent on a comparable residence, market conditions are reasonable for buying.
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If you are selling existing home and buying a new home, timing may not be important. Please review your
current and future financial commitments, before deciding to buy a home.
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| Calculate affordable Home Value |
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Based on your monthly income and monthly debt, an approximate monthly payment can be calculated. From the
monthly payment, the calculator can approximate the house price range that you can afford. Assets and
liabilities are also used in calculating affordable Home Value. This is the process of getting pre-qualification.
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| Create Wanted Feature List |
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Make a list of Wanted Features. Focus on features that you want now and need in the forseeable future -
number of bedrooms, number of bathrooms, number of cars garage and others.
Also consider having atleast 1 bedroom and bathroom for Guests. This Feature list will help in home search and comparing homes found.
This list will also help your Real Estate Agent or Broker.
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| Check your Credit |
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Before you start process of Home buying, obtain a copy of your credit report from the three major
credit bureaus and review the information. Its a smart idea to check your credit history regardless
of your credit. If there are errors or things that need to be corrected or addressed, it's easier to
fix and address them before you have found a house, than after you have found a house and are trying
to close your home loan.
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If you have some blemishes in your credit history, prepare answers to common questions like -
what they are, why they are there, and why you are a still good credit risk.
Lenders look at your credit and ask these questions to determine how likely you will pay back the loan.
For any extenuating circumstances - like a loss of a job or medical bills, explain and understand the
lender that it is not likely to happen again in the future.
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| Select the Location(s) |
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Average House Value with your wanted features in these Regions must be equal OR less than your affordable house value
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Promixity to Friends and Family: After moving into the new home, this becomes more important for social activities.
Check out traffic on your road in peak and off-peak hours. Residential Properties on a Road with heavy Traffic may not appreciate comparitively.
Last but not the least, check out Office commute during your office hours - traffic and time.
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Good School Districts - A good school district means your neighborhood will always be valued by families with school-age children.
This is a great reassurance to purchase, and it will be useful in selling your house later.
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Crime statistics - Check out the Crime statistics of these regions. Next, contact the police station and obtain
crime statistics? Are they acceptable to you? Sometimes, if they won't give them to you, it could be a cause for alarm.
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Check out the location of the shopping, police and fire stations, schools, and air traffic overhead.
These are all things that might affect your property value or quality of your life.
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| Find a great buyer's Agent |
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Traditionally real estate agents represent the sellers in a transaction. As a Sellers Agent, they will be
working in the best interest of the Seller AND not you - the Buyer. So, they are less likely to negotiate
the best price or contingencies for you.
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A buyer's agent's job and responsibility is to you, the buyer. Before working with an agent, establish if
they are a buyer's agent or a seller's agent. After spending a lot of time with an Agent, it's natural
to feel like they are part of your a team. But if they are not negotiating or working for you,
then they are not on your team.
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Make sure from your Buyers Agent that you are the first one to know about the homes that meet your needs.
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| Get pre-approved for Mortgage |
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An approval means that a lender has reviewed your credit history, verified your assets, liabilities and employment,
and has approved your loan before you have found a home to purchase. As long as the home appraises for at least the
same or more than purchase price, the loan should close.
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Getting approved also gives you an advantage over other buyers. Your firm approval makes it easier for you to
negotiate on the price with the seller. While getting pre-qualified may sound official, it is really just
getting an idea of what you can afford.
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Since interest rates fluctuate, its always better to find the Home first and then lock the interest rate for a mortgage loan.
If best interest rate is available after the home is purchased, mortgage loan can be refinanced with a better interest rate later.
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| Search for THE Home |
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While searching for Homes - have reasonable expectations. Instead of looking for a perfect home,
look for homes that fit most of your defined needs. Since this the home that you will stay for long time,
take your time to find your ideal home.
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After finding a good home, learn about the Home and Neighborhood - as much information as possible.
This will help you in making an educated and better decision about your home.
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| Learn about the Home |
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Make sure this house meets all the important features listed on your Wanted Feature List.
Check out the work needed immediately after buying the home.
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Make sure this house is in your selected and interested regions. Re-evaluate all the criteria of region selection like -
house value, proximity to friends and family, good school districts, close to shopping.
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No house is perfect - Always get an inspection. It might be a few hundred dollars, but it's well worth it.
It's the inspector's job to find any problems with the house that could cost you thousands to repair later.
Some inspectors may over play the importance of their role and the items that they find.
Get objective opinions from different people that you trust before making a decision on an inspection report.
Likewise, if an inspector says a foundation is cracked but its nothing to worry about - find out why and get other opinions.
Ask a handy/repair man for an idea of how much repairs will cost and how complicated they are.
The home buying process is an emotional, complex and time-consuming process, but it is worth it.
Nothing compares to owning your own home in a neighborhood that you chose.
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| Learn about the Neighborhood |
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Often times the interested house may be in a neighborhood that you're not familiar with, which is ok. It just
means that you'll have to do a little more research work. If you find a house that you like, ask for a list of the
neighborhood properties that sold in the last year. How does your home rank? Is it at the top of the price range?
If so, it may be hard to resell. Is it average or on the low end? If so, great - as the other home prices go
up in value, they will pull your home's value up as well.
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Talk to the neighbors. The more people you talk to, the better sense you will get of who makes up the
neighborhood and how they will effect your time spent in it.
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| Protect Yourself |
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Ask your Agent for a copy of the documents you will be asked to sign if you decide to buy the house.
Read them ahead of time so that you'll understand the questions that you will be asked, the things you
need to know, and the decisions you will need to make.
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| Have reasonable expectations |
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There is a lot of money at stake. No house is perfect. Understanding and remembering these two statements
will help diffuse any issue during the negotiation, the inspection and the closing stages.
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Generally, Emotions are high for both buyers and sellers. - The seller may have loving memories and years of sweat
equity in the house. Maybe they are being relocated and don't want to go. Understanding their motivations
for selling will help you appreciate their situation and predicament during these emotional times.
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There is a lot of money at stake for all the parties involved (including the agents) -
Just remember that market value (the value of a home) is the price that a willing buyer and a willing
seller can agree to (in the contract). If you can not agree on a price, ask yourself: Is there something you missed/not understood?
Are there comparables around that support the price that they want? In the end, does it matter?
What is the house worth to you today and what do you think you can reasonably sell it for based
on the amount of time you plan to spend in it?
Think about the answers to these questions before you make your move.
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| Under Contract and Closing |
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After the House is selected and the price is negotiated, create a contract to buy the house.
Have your Agent resolve all the pending issues mentioned in the Contract before the closing date.
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Talk to the Lender about the Closing date and get all the information about the Closing Attorney.
Make sure your Agent will be present at your Closing along with you. Get all the Closing documents from
the Closing Attorney at least couple of days before the Closing date, and review all of them.
On the Closing day, go to the Closing promptly and CLOSE the loan.
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For help on moving, please review Moving Tips.
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| Comments? |
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