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Everyone wants to own a home and live in it for a long time. A home is an investment, which many people will pay for in spans of years.
The choices you make when buying it will determine if you will get what you want or not.
We are about to enter the home buying market and we have prepared for your house hunt. This list contains facts and pointers extended by our friends and family who went through the home buying experience themselves. Hope the To Do’s are going to help you in your effort as well.
51 Tips for a new home buyer
- Buying only when you are prepared to live in it. If you will have moved in a year or two, maybe you shouldn’t buy it. even if you are thinking that you will sell it as the markets are rising, the transaction costs could have you spending much more than you expected
- Clean up your credit history before applying for a mortgage
- Get a home you can afford-don’t think that since you can pay for it for a long time you can get a palatial home on the beach when you cannot afford it.
- Buy a home you can live comfortably in
- You do not have to have 20% of the down payment to qualify for a loan
- There are lenders who will loan you the amount you need to own a home on a down payment as small as 3%
- The location of a home matters-get a place where amenities like hospitals and schools are close
- Use a professional agent if you are inexperienced in buying a home-he will also help you bid for a good price
- Consider points and rates when choosing a mortgage as you will save a lot of money in the long run
- Get a pre-approval from a lender before house hunting-then you will be able to know the homes you can afford
- Bid for a home according to the market trend; meaning the value of the homes in the neighborhood-so do your homework
- Get a home inspector to point out issues with the home that could cost you a lot more in the long run
- Get your finances in order and improve your credit ratings
- Consider the floor plan of the house
- Research on good lenders who will give you the right mortgage with the interest rates
- Check out the rates in the real estate market you want to invest in
- Check out what kind of house it is, when it was built and consider the market value
- Check out if there are deed restrictions in the house
- Check out if the square footage is the one that you need
- Ensure that you have a heating system that is efficient
- The mechanics of making an offer will depend on where you are located as real estate laws differ from one state to the other so make sure you agent has considered all these
- Don’t make last minute changes on the transaction details, ensure you are on top of happenings everyday
- Check for home prospects online or with local agents
- Make a decision only after you have toured several places
- Prepare a budget and keep in mind taxes, insurance fees etc as well as the mortgage-you will know if you can or cannot pay for the home
- Before signing the contract, you should have a clause that allows for an inspector to come and inspect the property
- Do not sign the contract without having the clauses inspected by your attorney or any agent representing you
- Ensure that all your interests have been taken care of by the contract
- Use an agent to buy the home, don’t do it yourself as you could lose a lot.
- You may not need an agent if you do not want to, but if you want to save time and money, get yourself one, Hire an Agent
- Agents have the advantage of knowing the market, some will preview the homes for you
- You will get advice from agents on which homes are overpriced and so you will be able to make a reasonable offer
- An agent is aware of which listings are new and which ones are yet to come
- The professional advice of an agent cannot be underestimated.
- Check out several homes at a time, you don’t want to buy one and see a better one
- Take a month or so to check out homes before deciding
- Getting a loan approval in advance will help you know the range or price of homes you want to buy.
- Compare the different kinds of mortgage plans that the bank can give you before getting one for yourself
- Choose a financier by asking for a reference from a mortgage broker
- If you are buying a foreclosure, some institutions will give you loans, some may decline
- The sale price for a home doesn’t mean the house will sell for that price, so don’t compare sale prices.
- Comparable sale rates are more reliable, because you will know the average price for a home in the area.
- Inspect the home before offering the price
- Your inspection will determine the value of a home and what price you will offer for it.
- Request for repairs to the home before offering your price
- Lenders will determine your mortgage rates depending on your credit score, if its anything above 720 you will pay low interest rates.
- You will not get a mortgage if your credit score is below 620.
- Ensure that you spend 30% of your monthly income on repayment so that you can stay afloat
- Save for your home to be comfortable with a higher house payment
- Check out the varieties of home loans before deciding
- Choose a neighborhood that fits all your needs before buying a home.
Readers, let us know if you want to extend some more helpful hints towards other readers. Feel free to state your opinions on home buying as well.
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My number one tip is to buy much less home than you can afford. We did and it is helping us reach our other goals so much faster as we have a lot of extra money to put toward paying down my girlfriend’s student loans now.
WOW, now that’s quite the list but a list that any first time home buyer can learn something from. Cheers Mr.CBB
Awesome list. I think this should be given to any prospective home buyer. I would have to agree with Lance. Don’t by more house than you can manage. Houses take work and maintenance and they cost every year in addition to your mortgage. You have to make sure you can handle this financially.
I am currently shopping for a new home and what I try to look for is possible extensions. Be it kids, tenants, an art studio, surely sometime you will need more space and if you can revamp your basement or loft for that, you won’t have to move. I also like to think that I can offset part of my mortgage by renting my extra space.
This is a nice comprehensive list of tips. Buying a home involves far more considerations than I think most first time buyers realize. It’s a big commitment, and not a liquid asset as many seemed to think during the real estate bubble.
In a hot market, one good strategy to guarantee a win is to overpay and then use the appraisal to lower the final cost. Chances are very good that the appraisal will come in much lower than the purchase price since comps always lag by a few months. Once you’ve gotten this far, chances are the other party will be very eager to complete the deal, even if it means coming back down substantially in price. But make sure to keep the appraisal contingency so that you can back out, just in case.
This strategy just basically helps you get a ticket to the dance.
Interesting list. These tips can help many home buyers to make a better decision. First time home buyer can learn a lot from this list.
Fantastic! There’s a lot of things in this list that I, myself, haven’t thought to consider before. Example for item no. 45 – “Request for repairs to the home before offering your price,” this would actually save both your money and time. Thank you for sharing this To Do’s!
My newlywed husband and I were looking for a elegant, tropical home in the Ocean Reef Community, to start our new beginning. We looked everywhere but couldn’t find the perfect home for us. Then a colleague suggested Bob Ecuyer, we gave him a try, and he found us a breathtaking oceanfront home. Bob was so professional and knowledgeable of the community. You can find him at http://www.swensonrealty.com or call (305) 367-3600.