Research, Research, ResearchOnce you have confirmed that you want to purchase a home, you need to begin research immediately. The more knowledge you can obtain, the better equipped you will be to make informed decisions throughout your buying process. Scroll through websites, newspapers, magazines, real estate listings, real estate professionals, networking events, and any other information that will benefit you.
Ensure that you record and note down each home that interests you and the amount of time it is on the market for. In addition to that, note every change in asking price; this allows you to gain a strong sense of the housing trends within the market you want to operate and buy-in.
Define Your BudgetTypically, Lenders advise that people aim to purchase a home no more than three to five times their overall household income if you intend to make a 20% down payment.
Buyers should be aware that you need to define your budget based on your financial situation. Use a tool like this first-time homeowner budget calculator to determine your budget accurately. To ignite your savings engage in things like autosaves plan, auto saver plans provide vast amounts of value when you are laying the foundations for a robust saving plan.
Prequalify and Pre-approve your MortgageBefore starting the home search, you will need how much you can spend, generate, and manage. To prequalify your finances, you must provide specific financial documents to your bank. These include income, savings amount, assets, and investments that you currently own. Your mortgage lender specialist will review this information and advise as to how much they can lend to you. This helps you to define a price range of houses in which you should be targeting.
Real Estate Professionals – Find The Best FitWhen you are scanning the market to buy a home, it’s recommended that you enlist the help and services of a real estate agent. Agents provide incredibly insightful information that can guide your buying process. They possess help knowledge on locations, neighborhoods, pricing, and lending schemes.
Not only do they have information on current markets, trends, and pricing, they are well-versed in the actual process of buying a home. They have negotiation skills and experience that is extremely valuable. Best (or worst) of all, you don’t have to pay your agent a dime until you purchase a home. This is because they are compensated via commission from the seller of the house.
Find the perfect home and make an offerOnce you have a defined budget, clear goals, and enlisted the help of a property agent, it’s time to begin your search and put offers to homeowners. Take notes on potential homes, use checklists, and ensure everything is recorded and easy to digest. Chances are, you will see hundreds of houses. Take videos, photos, and record plenty of notes. It’s vital to survey the entire home from the current shower pressure right down to what appliances, if any, come with the sale. For example, you may want to check out these areas of a potential home:
- Interior Walls
- Door handles and fixtures
- Kitchen condition
- HVAC system
- Outdoor areas
- Bedroom condition
- Electrical System
- What is the current status of the surrounding homes?
- How busy is the street? Does it get traffic?
- Are there schools, near-by?
- What is the convenience of the location? What interests you that is near-by?
Home Inspection – Do Your Due DiligenceBefore submitting an offer, SnapInspect suggests conducting a home inspection to determine the cost of setting up the property to suit your needs. Regardless of if you are purchasing a home as an investment or to live in, inspections are a must. Typically, your real estate agent will have some form of property inspection software. The software will allow them to walk the property with their phone, inspecting a mobile device app. Using property inspection software will ensure a standard that preserves your data and property information with 100% accuracy. When you are dealing with hundreds of thousands of dollars in loans, cash, and lending, ensuring efficiency is critical.
Typically, your agent will schedule the inspection on their own, and you will not have to provide any further information, etc. Real estate agents’ proactiveness on conducting home inspections usually stems from fear of selling an unworthy, un-compiling property that results in hefty fines and some cases, expulsion. Home Inspections give you as the home buyer peace of mind and put the seller at ease that the sale will continue. Home Inspections can also be used to negotiate a purchase when you are closing a deal. This is because you can’t fake an inspection. You can’t hide structural damage, broken windows, and other areas of the home may be lacking in, outlining the future maintenance and upkeep required once purchasing the home. The seller of the house may also conduct their inspection of the property before selling. This assists in pricing tasks, and outlining issues with the asset before it goes to market. Never, take a sellers inspection as fact and always ensure that you conduct your pre-purchase property inspection.
Enlist a Trusted Mortgage Banker for Loan selectionMortgage lenders are commonly known for their competitively priced loan structures, programs, and ‘above and beyond’ customer service mentality. It’s natural to have a variety of questions when you are buying a home or investment property. Although the two require different mindsets, you will have similar issues when you are initially purchasing the property. Having an experienced, responsive mortgage banker can make the process go a lot smoother. Each homebuyer has specific needs and priorities when selecting a mortgage. Some buyers are committed to keeping monthly payments as low as possible. Other buyers are looking for a program that ensures their monthly payments will never increase; some will look for a loan that suits someone wanting to move in a few years.
Home Appraisal Is A Must When You Purchase A HomeYour lender will arrange to have an appraiser to provide an independent estimation of the value of the property you are buying. An appraiser is an external third-party business that should not be associated with the lender. The appraisal will ensure all parties are on the same page, and the price for the home and mortgage is fair.
Organize Your PaperworkSadly, there is still large amounts of paperwork involved when a home is purchased. Companies like SnapInspect are frantically trying to digitize the entire real estate industry, but we are not there yet. Typically, your lender will delegate another company to deal with all of the paperwork and confirm that the seller rightful owner of the house they are attempting to sell.
Close The SaleAt the end of your buying journey, you will sign all of the paperwork that requires you to complete and action the property purchase, including all loan documents. It’s common for a loan to take a few days to be funded once the initial paperwork has been lodged with the lender. Once the documents and payments are made to the seller, kick your feet up. Welcome home!
Avoid These Costly Mistakes!Buying a home is an overwhelming experience, it’s only natural to make mistakes. SnapInspect aims to take those costly, first-time homeowner mistakes out of the equation. Here are some of the most common errors made.
Plan For Closing CostsIn addition to budgeting for your initial down payment, you will need to budget for the cash required to close your mortgage, which can be a significant amount and hinder many families’ savings and budget plans. Closing costs range from 2 – 5% of your overall loan amount. You can compare various costs and prices for closing expenses, like homeowner insurance, home inspectors, and title searches. In addition to this, you can also defray costs by requesting the selling to pay a portion of your closing costs or negotiating your realtor’s commission structure. Once you calculate your expected closing costs, you will be best informed to create an accurate budget.
Failing to Budget For Further ExpensesOnce you have paid your down payment and accounted for closing costs, it is recommended that you set aside further money for things like furniture, appliances, fixtures, and DIY projects. It’s great to save an extra amount of cash in case you want any urgent changes made when you initially move-in.
Buy For Tomorrow, Not TodayWhen you are searching for a home, it’s easy to view properties that serve your currents needs; however, if you expand your family, purchase new belongings, it’s easy to outgrow a once-perfect home. It’s ideal if you can afford a home that you know will suit you perfectly in five years or so, giving you time to grow as a family and household.
Foregoing NegotiationYou don’t know until you ask, right? Well, this could not be truer when you are operating within the real estate industry. A lot can be up for negotiation when you are entering the home purchasing process. Negotiating has immense value for buyers and often results in large sums of savings. Things like significant repairs, maintenance work, and anything else you plan to do once the sale is complete can be used to adjust pricing at the time of closing the deal. If you are buying in a buyers market, you typically will find that the seller will bargain with you to get the house off the market as soon as possible.
Failing to Understand Home InspectionsAs mentioned above, you need to get your home inspection on the property you are potentially going to purchase. However, you need to understand home inspections to know what to ask for what you expect and the amount you are planning to spend.
- Not all inspections are the same – Ensure you know precisely what is on your inspector’s checklist and the level of detail they are inspecting the home too.
- Inspection Type, From maintenance to move-in inspections, there is a massive range of inspections to choose from. Ensure your inspector is choosing an adequate checklist for your requirements.
- Walk the inspection with the Home inspector to ensure the standard is met
- Ensure your home inspector is implementing property inspection software or using a property inspection app to conduct their inspection
- Ask every question you have in confidence. No real estate agent or home inspector will answer the question, “Should I buy this house?” However, the more questions you ask, the better informed about the property you will be