When it comes to buying Real Estate, proper preparation is one of the keys to success.
Don't want to find yourself in a neighborhood you dislike?
Don't want to be making mortgage payments on a house you are uncomfortable with?
Don't want to waste your time falling in love with houses you can't afford?
In a word, prepare!
One of your most important tasks will be determining your needs. It can help to avoid either a nasty disappointment or the pain of buying more house than you need (or can afford). Distinguishing needs from wants will go a long way in preventing expensive mistakes in the house buying process. Establish some basic parameters and stick to them.
What you can buy depends on:
How much cash you have for a down payment and closing costs
How much money a mortgage lender is willing to provide as a loan
How much you can comfortably handle in monthly payments
It would be a very wise idea before you start looking for a house to consult with you financial advisor to check how much you can afford.
Everyone wants to buy homes in neighborhoods with:
Good school districts (even if there are no children, good schools mean high resale values.)
Low to zero crime rates
Rising property values
Most buyers know where they want to buy a house, mainly close to work, friends, family and good recreation.
Get pre-approved for a mortgage loan at the start of your search for a home.
Most first time home buyers want to look at homes... they often shop for a mortgage loan only after they've fallen in love with a particular house. Don't make that mistake! Get Pre-Approved or Pre-Qualified.
Pre-Approved - A lending institution has processed your loan application and approved a specific mortgage amount.
Pre-Qualified - An unofficial estimate of the home you can afford (a "pre-qualified buyer" is one who should be able to get a mortgage big enough to purchase the home he or she wants to buy).
Start with the basics:
Consider the purchase price: The value of an inexpensive home is pulled up by more expensive homes around it. In a neighborhood of $200,000 homes, a $150,000 home is a bargain even if it needs $25,000 in improvements. In other words, buy the cheapest house on the block.
Property of higher value is pulled down by lower priced property. A $200,000 house will be hard to re-sell on a block where the other homes are selling for $175,000. Never buy the most expensive house on the block.
Buy a home that can be sold at a profit
Find knowledgeable and honest real estate agent who is familiar with your target neighborhoods
Work with your agent to find the perfect house.
Negotiate a Price
Ok you found the house that you like, now:
Evaluate the Seller's asking price.
Ask your agent to prepare a Comparable Market Analysis (CMA) to review neighborhood selling prices.
Consider other negotiating points.
Decide how much to offer and on what terms.
These are the basics steps in purchasing a home.
Please don't hesitate to contact us if you have any questions.