Did you know that buying a home can be one of the most stressful things you can do along with starting a new job and having children? Because of the amount of stress involved in the process, it is always a good idea to do some preparation before officially launching your home search. Sure, you can lurk online through various sites checking out the homes, dreaming about getting into the one that you love the most. However, when you decide it is time to get serious about buying your first home, please make sure to do these three things.
Get preapproved for financing – It is great to make the giant mental leap to decide to buy your first home. It is a very brave thing to decide to commit a large chunk of your time and resources for the next three months to finding your dream home. Your first step is to discuss your finances with a mortgage professional. Why? In order to truly understand your options in purchasing a home, you need to know what your budget will be, or even if you qualify for a mortgage. Nothing is more frustrating and heart breaking to find the home of your dreams to find out that you do not have enough to get it. It also helps to know what areas of your target area to search. If you can only afford a $150,000 homes, it does not make sense to search in communities where the average price is $200,000. You do want to make sure you get pre-approved for a loan and not prequalified. What is the difference? With prequalification, a mortgage professional will take a very cursory look at your finances and tell you that you will probably be able to get a mortgage in a certain amount. For most mortgage professionals, preapproval takes you to the next step where they delve more deeply into your life to determine that you definitely do qualify for that mortgage. Ask your mortgage professional for more details.
Interview at least three real estate agents – Did you know that most people go with the first real estate agent they talk to? I do not advise this approach at all. It might seem strange advice coming from a real estate agent to interview two other agents. However, I feel people need to find the right fit for them when it comes to getting help with purchasing the first home. Here are some things to keep in mind when interviewing the agent. How successful have they been as an agent? What is their communication plan? What is their availability? How many active clients are they currently assisting? What areas do they specialize? What geographic areas do they cover? Who is their broker? Ask them about their typical day. One thing to realize about working with an agent is that you are actually in a fiduciary relationship with the agent’s broker. The agent acts on behalf of the broker. (Check out the form Information About Brokerage Services for more details on this.). You might also not realize that you don’t typically pay the broker (agent) anything to help you buy a home. The seller’s broker pays the other broker for bringing you to the table.
Make a list of Your Must Haves – In order to know what you want in a home, you should make a list of the features you must have in it. Go ahead and make this list, look at it closely and then tear it up! Although I write this last sentence in jest, it is important for you to understand why I make it. Most first time home buyers will go into the process with very unrealistic expectations of their first home. For one thing, most of the features you want in a home will most likely not exist in your price range, at least not all of them. You might want a large Master Suite and granite counter tops in the kitchen, but if you can only afford a home from the 1980s, you wont’ get this unless upgrades were made to the home. As a first time home buyer, it is important to realize that your first home is going to be where you live for five to eight years. When the time comes to upgrade your home, you will be in a better position to find a home that more closely matches everything on your must-have list. Dream homes are realized by very few first time home buyers. It is good to go into the process with this right frame of mind.