I like short bullets. It's the way I write and remember. So, here is a list of 10 tips you'll want to keep in mind when buying a home.
1. Get Pre-Approved
Don't go out shopping for a home until you are pre-approved for a loan.This is a big mistake that people often make. What often happens, is a buyer falls in love with a home they can't afford. That is a waste of time and energy for the buyer and their real estate professional.
2. Research Locations First
Once a budget has been set, start looking for areas where there is housing in that price range. If your budget is $150,000 look for an area where that is the median price. Also consider things like quality of life: for example, if you purchase a condo in town you can walk to restaurants, nightlife and work vs buying a small home in the suburbs where you have space to grow and entertain but have to commute to work.
3. Determine How Long the Property Will Be Your Home
The rule of thumb is, consider buying if you are going to stay two to five years. To take advantage of the tax rules, you will need to own the property at least two years.
4. Don't be impulsive.
This is a large purchase. Spend the time to do the research and find the right location, kind of home and price. The time will be well spent.
5. Have enough money saved.
You'll need money for a down payment and closing cost. The bank will also want to see reserves (money you will have left in savings). You will also want to spend money to make your house a home.
6. Attend the Home Inspection
Making sure you are at the home inspection is one of the most important parts of buying your home for two reasons: 1) understanding the condition of the home you are buying 2) depending on the report, it may give you an opportunity to negotiate credits or a price reduction.
7. Avoid Taking on new credit.
Don't open any new credit cards or make purchases on credit while in the process of looking for or buying a home. Along with buying a home often comes new furniture and home improvements. Often, the home buyer will extend new credit to purchase these things. If you open new accounts it can sometimes keep you from getting the loan because it can change your debt to income ratio. So wait until the home has closed.
8. Schools are important even if you don't have children.
A good school district will increase the value of your home and a bad one can make it hard to sell the property when the time comes.
9. Don't ignore the CC&Rs if you are buying a home where there is HOA.
CC&Rs are rules that can dictate many decisions about your new home – for example, what can be exposed on the outside of your home or whether you can rent the property.
10. Use a Real Estate Professional.
A real estate professional is paid in most states by the seller. So, if you are the buyer, there is really very little reason not to use a broker/agent and a lot of good reasons to use one. For example: Market knowledge, negotiating on your behalf, help with other real estate professionals such as lenders and inspectors, guidance through contracts, forms and disclosures, just to name a few.
I hope these "bullet points" will help you with your next or first real estate purchase. Enjoy the process and you are more likely to find the perfect home.
About the Author
With over 30 years of experience, Diana brings a wealth of real estate knowledge and expertise with her timely and insightful articles, videos and webinars.