Buyers

Buying a home will probably rank as one of the biggest personal investments one can make. Being organized and knowledgeable will contribute significantly to getting the best home deal possible with the least amount of stress. It's important to anticipate the steps required to successfully achieve your housing goal and to build a plan of action that gets you there.

Before you can build a plan of action, take the time to lay the groundwork for your decision-making process.

First, ask yourself how much can you afford to pay for a home. If you're not sure on the price range, find a lender and get preapproved. Preapproval will let you know how much you can afford so that you can look for homes in your price range. Getting pre-approved helps you to alleviate some of the anxieties that come with home buying. You know exactly what you qualify for and at what rate, you know how large your monthly mortgage payments will be, and you know how much you will have for a down payment. Once you are pre-approved, you avoid the frustration of finding homes that you think are perfect, but are not in your price range.

Second, ask yourself where you want to live and what is the best location for you and/or your family. Things to consider:

*convenience for all family members
*proximity to work, school
*crime rate of neighborhood
*local transportation
*types of homes in neighborhood, for example condos, town homes, co-ops, newly constructed homes etc.

It’s important that you choose an experienced agent who is educated in working for a buyer. Your agent should be actively finding you potential homes through MLS, keeping you informed of the entire process, negotiating on your behalf, and answering all of your questions with competence and speed. It is beneficial to use an agent that has taken the Accredited Buyer’s Agent class, passed the test, and received the ABR designation.

First, find an agent who represents you and not the seller. This is beneficial during the negotiation process. If you are working with a buyer’s agent, he or she is required not to tell the seller of your top choice. In addition, he or she is also focused on getting you the lowest asking price.

Don’t go on a spending spree using credit if you are thinking about buying a home, or in the process of buying a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation.

Every $100 you pay per month on a credit payment could cost your about $10,000 in home eligibility. For example, a car payment of $300/month could mean that you qualify for $30,000 less in a mortgage.

Even if you have accumulated enough savings, you should consider not making any large purchases until after closing. The last thing you want is to know that you could have purchased a home had you resisted spending.

Talk to a mortgage banker about the best plan for your financial situation. It may be to your advantage to pay off some of your debt or to save for a down payment. Each buyer’s financial situation is different. So plan ahead and seek good advice from a reputable mortgage company.

In the past, buyers would go house shopping and when they had found their dream home, then they went to get pre-approved. However, in today's market, that has proven to be one of the least effective methods in purchasing a home.

Most lenders can pre-qualify you for a mortgage over the phone. Based on general questions about your income, debt, assets, and credit history, lenders can estimate a mortgage that is right for you. However, being pre-qualified and pre-approved are different things. Pre-approval means that you have applied for a mortgage; you have filled out the mortgage application, received your credit report, and verified your employment, assets, etc. When you are pre-approved, you know exactly what the maximum loan amount will be.

A pre-qualified letter is not verified and in essence, does not count for much if you are competing with other buyers who are pre-approved. When you are pre-approved, you and the seller know exactly how much house you can afford. It gives you credibility as an interested buyer and lets the seller know immediately that you will qualify for a loan to buy their property.

In addition to being pre-approved, it's important to be pre-approved with a legitimate lender. Legitimate lenders include: banks, mortgage bankers, credit unions, and mortgage brokers.

Be sure to choose a lender who is knowledable of interest rates, closing costs, and different mortgage plans that may be more structured for your personal needs and finances. Check with friends, real estate agents, and co-workers to see their past experiences with home-lenders.

The best seller is one who is highly motivated. A highly motivated seller is more likely to sell for less than his or her house is worth. Typically, the reason for a seller selling their home is not public information. Just be sure to have a market analysis completed on the property before making an offer.

If possible, find out why the sellers are selling. The reasons could be anything from job change to a new location to financial problems. If you can solve their problem, whether it is cash related or time related, do so. For example, if the sellers are highly motivated because they need to move quickly, give them a fast sale - and a lower price. If you can make an offer, even a low one, that gives them cash in a short time, they are more likely to accept. Many time a motivated seller will have their property listed through a Multiple Listing Service.


Get an inspection

As a buyer, it is important to know exactly what you are buying. Don’t take for granted what you see and what the seller or the listing agent tells you. A professional home inspection is something you MUST do, whether you are buying an existing home or a new one. An inspection is an opportunity to have an expert look closely at the property you are considering purchasing and getting both an oral and written opinion as to its condition.

Beforehand, make sure the report will be done by a professional organization, such as a local trade organization or a national trade organization such as ASHI (American Society of Home Inspection). If at all possible, try and attend the inspectio at some point in time. Many inspectors recommend being there at the end to point out defects and home maintenance issues. Once the inspection is complete, review the inspection report carefully.

You have to demand an inspection when you present your offer. It must be written in as a contingency; if you do not approve the inspection report, then you don’t buy. Most real estate contracts automatically provide an inspection contingency.


Avoid Financial Stress

By asking the right questions, and knowing exactly what your needs are, you can find the right loan for you. There are certain approaches that you can take while mortgage shopping that can cost or save you money.

It is still true that the better qualifications you have, the lower your interest rate will be. However, there are mortgages available for almost everyone; it's the interest rates or the down payments that vary.

Before speaking with a lender, know what monthly dollar amount you feel comfortable committing to. Then when you discuss mortgage pre-approval with your lender, it is easier for you to determine the monthly amount and what value of home the monthly amount translates into. Do not put yourself in the position where you will be paying more each month than you intended simply because the "dream" house requires it.

Do your research on the types of mortgages available to you and find the one that best suits your needs. There are a number of considerations to be made in terms of finding the best mortgage for each individual:

*What type of market are you in?
*Are the interest rates falling or rising?
*Do you want a fixed mortgage rate
*Where you will always know what your payment is going to be?
*What are your long-term goals?
*Would an adjustable be right for you?
*Do you intend to resell the property?
*Do you only need the mortgage for a short time?

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