Location
Like the old adage that we so often here, “location, location, location.” It still rings true in today’s real estate market. There are several factors that home buyers should consider when looking for a new home. You (spouse or in-law, if applicable) should make a list of the following items that are important to you in your next home. Remember to consider resale value when choosing the right location for your dream home. Below is an example of items to consider:
- Commute time
- Public transportation
- Local schools or day care
- Shopping centers
- Gym or fitness club
- Busy street versus quiet street
- Commercial district versus residential neighborhood
- Condo versus single-family home
- Parks and recreation
- More than one story
- Number of bedrooms, bathrooms
- Square footage
- Condition of heating, plumbing, electrical
- List features that you would like in your home, such as: garage, fenced in yard, finished basement, master bathroom, etc.
Research your target area
Ask your real estate professional to get you the latest home sales data in your target areas. This will give you an idea where homes and condos are selling at compared to their asking price. Trulia and Zillow also have some great market statistics, but a real estate professional will have “real-time” market information. You also want to see the current homes and condos on the market. Foreclosures and REOs are another area to review, so you can see if there are discounted properties in your target area.
Most of us do not have a crystal ball in our closet, so it is tough to know what the future holds. But, you should think about living in your new home for at least a few years. If you cannot commit to living in the house and community for a few years, then maybe it is not the right house or town for you. Transaction costs are significant when you purchasing and/or selling a home, so be aware your other costs associated with purchasing a new home.
Financing
If you are serious about purchasing a new home, it would behoove you to start talking to local and national banks, as well as mortgage brokers. They can help you figure out what you can afford. Click here for a calculator from Ginnie Mae to help you figure out how much you can afford. Visit sites like Bankrate.com to get an idea of where rates are at today. Once you have done some homework, it is time to get a pre-approval letter from the lender or mortgage broker.
Don't forget closing costs. Closing costs can vary depending on the loan and can be between 2 and 4 percent of the sales price for a home buyer. Click here to visit the Realtor.com website with a link to a closing cost calculator.
Don't forget closing costs. Closing costs can vary depending on the loan and can be between 2 and 4 percent of the sales price for a home buyer. Click here to visit the Realtor.com website with a link to a closing cost calculator.
Review your credit history by getting a free credit report from the many agencies out there that offer a limited time free credit report. You want to clean up any outstanding debts that you possibly can and also look for blemishes on your report that you may have not known about. There are ways to increase your score by a few points, which your lender may be able to help you with.
There are many types of mortgages out there, so review the many different offerings to find the one that best suits your needs. Bankrate.com has a great article on the different types of fixed and adjustable rate mortgages. Click here to go to Bankrate.com.
Build a team & get organized
Before you go out trouncing through open houses, ask your real estate professional for a checklist or create a spreadsheet to keep a log of the homes that you have seen. Click here for a checklist that from HUD that I provide to clients for each home they see. Incorporate some of the features that you require in your next home into the checklist. Feel free to contact me for a Word version that you can personalize.
A home inspector is a crucial piece to the team of professionals that you need to help with the purchase of your new home. A home inspector can give you a list of potential problem areas in the home, which is worth its weight in gold. I would also recommend a real estate attorney, real estate broker/agent, insurance agent, and accountant to round out your team. Click here for a link to the IRS for tax information for home buyers.
Making an Offer
Now that you are serious about purchasing a home or condo, it is time to start making offers to purchase. Click here to read an article that I wrote with 8 tips to think about before making an offer. Ask your real estate professional to see a blank copy of an offer to purchase, so you can familiarize yourself with the language of the contract. Ask your real estate pro to review the contract with you. Learn about the multiple contingencies that you can build into your offer, so you are protected if the inspection reveals something about the home that turns you off from moving forward. At this point, I would also contact your real estate attorney and accountant.
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