A solid game plan can help you narrow your homebuying search to find the best home for you.
House hunting is just like any other shopping expedition. If you identify exactly what you want and do some research, youâ€™ll zoom in on the home you want at the best price. These eight tips will guide you through a smart homebuying process.
1. Know thyself
Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If youâ€™re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?
2. Research before you look
List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods youâ€™d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com (http://REALTOR.com) to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory youâ€™d like to view.
3. Get your finances in order
Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much youâ€™re comfortable spending each month on housing. Donâ€™t wait until youâ€™ve found a home and made an offer to investigate financing.
Gather your financial records and meet with a lender to get a prequalification letter spelling out how much youâ€™re eligible to borrow. The lender wonâ€™t necessarily consider the extra fees youâ€™ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range youâ€™re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.
4. Set a moving timeline
Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, youâ€™ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.
5. Think long term
Your future plans may dictate the type of home youâ€™ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home youâ€™ll still love years from now.
6. Work with a REALTORÂ®
Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes youâ€™re interested in. Because homebuying triggers many emotions, consider whether an agentâ€™s style meshes with your personality.
Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyersâ€™ reps work only for you even though theyâ€™re typically paid by the seller. Finally, check whether agents are REALTORSÂ®, which means theyâ€™re members of the NATIONAL ASSOCIATION OF REALTORSÂ®. NAR has been a champion of homeownership rights for more than a century.
7. Be realistic
Itâ€™s OK to be picky about the home and neighborhood you want, but donâ€™t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded.
On the flip side, donâ€™t be so swayed by a â€œwowâ€ feature that you forget about other issues-like noise levels-that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering thereâ€™s no such thing as the perfect home.
8. Limit the opinions you solicit
Itâ€™s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria youâ€™ve identified as important.
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G.M. Filisko is an attorney and award-winning writer who has found happiness in a brownstone in a historic Chicago neighborhood. A frequent contributor to many national publications including Bankrate.com, REALTORÂ® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics. Â Article From BuyAndSell.HouseLogic.com
By: G. M. Filisko
Published: February 10, 2010
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