Whether this is your first home, or your tenth, this checklist can help you prepare for the purchase of a new home. If you follow these tips, your home buying process will go smoothly, and you won’t fall victim to some of the mistakes that other people make during the buying process. These simple tips are often overlooked, but they can save you lots of money and headache in the future. Here’s what you can do to make your buying process a little easier:
1. Go Through The Preapproval or Prequalification Process
Ideally before you begin the home buying process you have first undergone the preapproval or prequalification process with a lender, so that you know exactly what you can spend toward a home. Without first sitting down and meeting with a lender, you might overestimate the amount of home that you can buy and waste time looking at properties that you cannot actually afford.
This brings about heartbreak when you find your dream home only to later realize that you can’t afford it after all. Many things go into how much home you can afford, and if you try to figure out an amount without sitting down with a lender that looks at your assets, debts, credit score, and the current lending interest rates, then you won’t have an accurate idea of what you can put toward a home.
Save yourself lots of time and frustration by going through the preapproval process ahead of time, then basing your home search on the results.
2. Select A Great Buyer’s Agent
The homebuying process is complicated, and you need to rely on someone who knows the market well and is informed about home prices in your area. Start your search by selecting the right buyers agent.
Ask for referrals and recommendations from your friends, and speak to some of the agent’s clients to see how they do business.
Interview each agent and see who you like best, because you’ll spend a lot of time with them and rely on them to send you new information about homes that have just been placed on the market.
Selecting the right buyers agent doesn’t cost you anything and can potentially save you hundreds of thousands of dollars. You shouldn’t engage in the buying process alone, make sure that you are represented by a superior real estate agent.
3. Shop For Your Home Thoroughly
Begin your home buying search in an organized manner by taking a notepad and listing down the properties that you’ve seen and what you like about each home.
You’ll end up seeing so many different properties that it’s great to have notes about each one, the cost of the home, and the pros and cons of each. Take photos as a visual reminder of each home to help you on your search as well.
This way you can easily compare the homes that you have seen and can discuss your feelings about each property with your real estate agent and family members. If you have a smartphone or a camera, it might also be helpful to take videos of the home tour, and will help you select a home when you’re ready to make an offer.
4. Tour The Neighborhood Before Making An Offer
Also check out what is going on outside of each home. Look at how well the other homes on the block are maintained, visit the home at different hours of the day and take note of the traffic that is on the block.
Look at the amount of street parking that is available for your family and visitors, selecting a location where it’s easy to get to your home. Tour the neighborhood and list down the schools, parks, shopping centers, restaurants, and public transportation within a few blocks of your home.
Don’t forget that you’re not only buying a home, but the neighborhood as well. You want to make sure that everything is comfortable for you, and that you enjoy your surroundings and the services that are offered in your neighborhood.
Check out other homes in the same area and see if you are getting a deal on the property that you like, since your real estate agent can base the price of the home you want compared to what has sold and is being sold on the market around the same time.
5. Write A Great Offer And Prepare For A Counter Offer
The market dictates what type of offer you’ll make on the home you’ve selected. Your real estate agent can help you determine whether it’s a buyer’s market or a seller’s market, and come up with the appropriate offer that works in either case.
Select a home offer price based on what you think the seller will accept or counter. Determine if you want to place a lowball offer on the home, depending on the owner’s situation, or if you want to go over asking price because there are multiple offers on the home.
You can determine what type of offer that you put on a home, but if your offer is rejected, talk to your real estate agent about what caused the rejection, and make sure that you don’t make the same mistake and miss out on a home that you absolutely want to live in.
Most likely the seller is going to come back with a counter offer. You should expect this during the sales process, but you can still negotiate if you feel that the counter offer is too expensive. Share information about your family to make a personal connection with the seller, and give them a reason to choose your offer over everyone else’s.
If the seller holds firm at the full price, discuss with your real estate agent if it’s worth it to continue negotiations, or if you should just move on to locating another home.
6. Protect Yourself And Your Investment
Stay on top of the purchase of your home and maintain the right amount of due diligence in order to protect yourself incase anything happens as you are purchasing your home.
If you aren’t represented by an attorney in your area when it comes time to make a purchase, hire one anyway as they won’t have a vested interest in the purchase of a home like your real estate agent does.
Have them look over anything that you are expected to sign so that they can check and make sure that the language protects you from any common problems. Purchase adequate home buyers insurance so that your belongings and your home are protected in the event of a natural disaster or emergency.
Stay on top of your insurance as the price of your home increases and make sure that you follow the home buying process so that you’re protected if anything goes wrong.
7. Keep Your Financial Situation The Same
Don’t do anything that can harm your credit or spend lots of money in between the time that it takes for you to get preapproved and the time it takes to close on a home.
Most first time homeowners don’t realize that you have to go through a final approval before your home closes, so if your financial situation changes drastically during that time, it will signal a red flag for your lenders.
The last thing that you want to do is give your lenders a reason to loan you less money or cancel your loan altogether because you couldn’t wait to purchase a new car or spend a lot of money.
Your lenders may ask for additional information before the home closes, so make sure that you work closely with your lenders and submit any information that they request of you.
8. Conduct A Home Inspection
Just because you want to move forward quickly on purchasing a home, doesn’t mean that you should skip the home inspection!
Find a reputable home inspector that will thoroughly check the home you’re interested in and make sure that there aren’t any costly issues to fix.
You should also go through the home yourself with a home inspection checklist, and make sure that nothing is out of the ordinary about the home you’re purchasing. The more you know about what to look for in a home, the easier the process will be for you.
Attend the home inspection and visually check out any of the issues that your home inspector points out.
9. Issue A Request For Repairs
There is no such thing as a perfect home, each one is going to have it’s unique set of problems, so don’t let minor issues stop you from buying a home that you want to live in.
If there are any health or safety issues with the home you are considering, issue a request for repair by asking the seller to take care of any issues, or by asking for a credit so that you can take care of the problems yourself.
As long as you are reasonable with your requests, there is no reason why the homeowner shouldn’t accept your proposal and move the buying process along.
10. Set Reasonable Expectations
Don’t expect perfection when you purchase your home and you won’t be hurt when minor things are out of place. When you issue a request for repairs, that should take care of the major problems.
When you get to your home, you can take care of the minor things like painting the walls, or doing small construction jobs.
Expecting perfection is easy when you pay list price or over list price for a home, but that doesn’t mean you’ll receive it.
Do your best to set reasonable expectations for each home, understanding that there will always be things that you want to improve on to get it ready as your permanent place of residence.