Across the country we are seeing a slight shift in the market. Many market segments are moving from a sellers’ market to a more neutral market, making it easier for buyers to have quality options to purchase.
If you or a loved one are planning on purchasing a home in the not so distant future here are some great tips to help you prepare:
Getting your finances in order should be a priority, and a strong letter of pre-approval from a lender is a powerful negotiating tool.
Here are 11 tips to help you prepare:
1) See a lender. Let them pre-approve you and run your credit report to ensure there are no items of bad credit that need to be removed. (Reply to this email or give me a call for quality recommendations.)
2) Discuss with your lender the source of your down payment. If you are pulling from an investment account, check the timeline to liquidate. If you are receiving gift funds, you will need a gift letter.
3) Set your budget now and start spending less. Start living as if you already have your new mortgage so that you can save some extra dollars for the down payment. By the time you purchase, you will be used to the new payment.
4) Ask your lender or realtor to calculate the “real cost of homeownership.” In other words, after you write off your interest deduction, what is your true net out of pocket amount after the tax savings?
5) If you are changing jobs talk to your lender about how this will impact your qualification.
6) Don’t buy stuff. If you have your credit run and then secure new consumer loans, it will impact your FICO score and potentially your qualification limit. Don’t do anything without checking with your lender first.
7) Check interest rates… But also make sure you have a reputable lender. Some lenders may have a slightly higher rate, but they are very experienced and able to handle tougher deals. Banks may be slightly less expensive, but they may take a long time for approval and may be picky, which is especially difficult for those who own their own business or have complicated investments.
8) Take well-meaning friends and family advice with a grain of salt. Aunt Bessie, who hasn’t purchased or sold a home for 40 years, is not likely to be your best advisor. Instead, talk to a qualified real estate professional who will educate you on the market and connect you to a qualified lender if you need a reference.
9) Start your search well in advance. Contact an agent early in the process as they will likely have quiet sale properties in their pipeline that you won’t find online. This will allow you to beat the crowd to some of the best properties in town.
10) Don’t get overly emotional about the negotiations. In other words, remember that if you chose it and love it, you may have to pay more to get it. When ready to submit a bid ask yourself, “What is the most I am willing to pay to be certain another buyer doesn’t take my home away?”
11) Review all inspection reports and property disclosures with your qualified real estate professional. They will help you interpret it and will help you create a request for repairs if you are not purchasing as is.
A little planning can help you have a stress-free purchase and maximize your buying power.
For your free and confidential home buyer consultation, contact me at the number on the bottom of this email. Please feel free to check out the free educational resources I will mail to you immediately upon request.