How often do you purchase real estate? Perhaps three or four times in your lifetime? Purchasing real estate is a major transaction complicated by numerous details. There are many pitfalls you can avoid when you are in the market to buy a home. Here are a few tips and strategies to help you prepare for success.
Pull your credit report from all three credit bureaus and correct any errors.
Errors on your credit report that impact your credit score can have a significant impact on the interest rate you will receive on your mortgage financing. You are entitled to an annual credit report from each of the three major credit bureaus and may obtain it by going to www.annualcreditreport.com. While the credit report is free, you will be required to pay a small fee to obtain each credit score.
Prepare a realistic budget.
Whether you are a first time buyer or a move-up buyer, it is likely that your new house payment will represent an adjustment in your spending habits. Before getting caught up in the emotional excitement of a home purchase, it is important to get an accurate picture of your financial comfort zone.
Don’t forget, the increased house payment is typically offset by increased tax deductions so the net expense may be less dramatic than you anticipate. Consider scheduling an appointment with your tax advisor to discover the net payment increase after tax deductions.
Get pre-approved for mortgage financing.
In the current mortgage lending environment, it is important to carefully shop for a suitable mortgage loan. HUD offers a PDF booklet titled Looking For the Best Mortgage that will help you effectively shop for a mortgage loan.
In addition to finding a suitable mortgage program and interest rate, it is equally important to find an experienced and competent lending professional to assist you throughout the financing process. Sellers do not want to remove their home from the market until a buyer has been fully preapproved for mortgage financing. This means the lender has verified your credit, income and assets. Anything less than a preapproval will significantly lessen the chances of your offer being accepted.
If you are unsure which lender to chose for your financing needs, we invite you to contact us. We have a lengthy list of qualified mortgage lenders with specialties that meet almost any financing need. Equally important, they have a proven track record of delivering what they promise!
Prepare a “Must Have” and “Want” list that is realistic for your price range.
HUD offers a Home Buyers Wish list in PDF format to start making notes.
Choose a realtor to represent your interests as a buyer’s agent.
What is a Buyers Agent? A Buyers Agent represents you – not the seller – in a real estate transaction. Even though the seller pays the commission, a Buyer’s Representation Agreement allows your agent to legally and fully represent your best interests and maintain your confidentiality throughout the entire transaction. It is also important to choose a Realtor with whom you have good chemistry. You will be spending a lot of time together and you should enjoy it! Read our Client Testimonials.
A Buyer’s Agent should:
- Meet with you for an initial appointment to gather your needs and preferences for your future home, your time frame and discuss any concerns.
- Educate you throughout the process
- Review the Residential Purchase Agreement in advance so the form is familiar to you and not intimidating when it is time to write an offer.
- Assist you with the financing process
- Carefully monitor the real estate market for homes that meet your specific parameters in your desired neighborhoods
- Offer suggestions and advice as to how to write an offer that meets your needs and is most likely to be accepted by a seller.
- Negotiate a contract so that your earnest money deposit is carefully protected during the inspection and contingency time frames
- Provide you with a list of qualified professionals to perform property inspections
- Order inspections
- Schedule and attend the appointments with your chosen inspection and/or repair professionals
- Personally conduct an on site inspection of the home
- Review and discuss with you all of the inspections and reports
- Negotiate a “request for repairs”, if applicable
- Deliver and/or communicate any disclosures, materials or information received from the seller’s agent or personally known
- Facilitate the processes, tasks and contractual deadlines necessary to close the transaction
