Buying real estate can be a daunting endeavor. For most of us, it’s probably the largest purchase we’ll make in a lifetime. To ease your concerns, educate yourself about the buying process. The more knowledge you gain, the more confident you’ll be in your search. It’s uncomfortable making expensive decisions based on someone else’s word, so be sure that you’ve done your homework before embarking on a serious home search. Here are some home buying tips to help you start on the right foot.
A Trusted Realtor. First, ensure that you’ve chosen a Realtor® who listens to your needs and responds accordingly. You should have a comfortable feeling of trust with your agent. His knowledge of the current market should be apparent when discussing your search. If your agent seems overly salesy or continually tries to veer you in a direction that doesn’t suit you, then you probably need to find a better fit. On the flip side, when your agent has demonstrated she has experience and industry knowledge, trust her when she tells you facts about the process that you might not want to hear. For example, if an agent tells you the dangers of low ball offers in a hot sellers’ market or the possibility of losing out in a competitive multiple offer situation, heed the warnings. Realtors® have seen buyers go through a multitude of different situations and know the variable outcomes that are possible.
Legal and Financials. Learn as much as you can about the legal and financial aspects of purchasing a home. For example, be familiar with the standard purchase contract in your local area. Your Realtor® can give you a basic understanding of your rights as a buyer and a seller’s rights with regard to that contract—like how either side can get out of it. But if you want to know answers to a variety of potential legal scenarios that could come up, you’re better off consulting with a lawyer. In another example, know what you’re getting into when you provide earnest money with an offer and the risks involved in losing that money if you back out of an agreement.
On the financial side, assuming you’re taking out a mortgage, work with a lender who gives you all the pros and cons of various loans for which you’re qualified. Find out exactly what you will pay in principal, interest, and fees during the course of the loan. You should speak to more than one lender to ensure you’re getting the loan that best fits your circumstances. Know the minimum down payment, private mortgage insurance (PMI), and home owner’s insurance that your lender requires for the loan you’ve chosen. Additionally, be aware of how the type of loan you choose and the amount of financing you require affects your offer in a seller’s eyes. Realize that some sellers will choose a more financially sound buyer with a slightly lower offer than a less financially sound one with a higher offer. Sellers sometimes do this to have more assurance that the sale will close successfully within a certain timeframe.
True Value. When singling out a home for purchase, understand your market’s true value. Know what people typically pay in your particular location and understand which features bump up the pricing tier. Your Realtor® should provide you sound comparables for you to review. You can also do your own research online through local county records on recent sale purchases. Also, know what to look for in quality construction and design. The more informed decision you make, the more likely it is that you’ll purchase a home that has the ability to appreciate over the years.
Informed and Fast Decision Making. Whether you’re searching in a particularly popular location or you happen to be in a low-inventory market where everything decent is going fast, you need to know how to make fast and informed decisions. Know your top priorities versus things that you’re willing to sacrifice for the greater good of what you’re getting. Sometimes it takes some bumps and failures along the way to define your most critical needs. For example, you weren’t sure the fifth house you saw was perfect even though it had many of the things you wanted. Then after seeing five more houses you realize that other home was just what you wanted. But now it’s under contract with someone else. Also, you need to know the value of homes in your neighborhood and realistic offers so that you can be competitive in multiple offer situations. Use your Realtor’s® guidance on multiple offer strategies. You may not have the benefit of time to mull over your choices if the market is competitive. Be prepared to make an offer when you feel you’ve hit upon the right home.