Here are our top ten tips for home shopping. Before you start your home search, there are a few items to consider and act upon to make you search for your new home run smoothly.
Don’t Move Money Around
Lenders like to see stability so keep your money where it is. Don’t rearrange and move things around for a number of months prior to applying for a loan. Avoid changing jobs or any large purchases that may impact your debt to income ratio.
Get Pre-Approved For Your Loan
This is a huge time saver. You will know ahead of time what price range you should be looking at when home shopping. It also gives you an advantage over others who are not pre-qualified. In a competitive situation, it can give you the advantage when dealing with a seller that wants a quicker sale. This also gives you the opportunity to shop around for the best lending deals. Ask about fees and points and review all literature carefully.
Don’t hesitate to confirm property lines. A survey is recommended to confirm exactly where your new property lines will be. You also want to confirm that your property taxes are based upon real numbers.
Don’t Play Market Games
Trying to time the market is a game better left to others. There’s little sense in trying to game the market and figure out the best time to buy. By waiting, you’ll likely miss the opportunity that’s staring you in the face. Find the home you want and know you’ll enjoy. That’s the big reward.
Bigger, Better, Faster Is Not Always Best
Everyone wants big and grand, however it’s not always in your best interest. The larger it is, the more you have to consider upkeep and maintenance expenses. The best house on the block also isn’t likely to increase as much in value as the worst house. Remember you can make changes once you own it and increase it’s value. Larger homes may also not sell quickly when it’s time to move on.
Consider Sleeper Costs
The biggest differences between renting and owning are what’s known as sleeper costs. This includes not only insurance and taxes, but also maintenance and improvements to the property. Make certain you’ve allowed for these in your budget.
Go With Your Instincts
Avoid buying based on just emotions. You aren’t dating the house, you are owning it. Make certain there are logical reasons for choosing this home as well as the enjoyable reasons.
Never skip a home inspection! This is a critical step that may reveal things about the home that you couldn’t determine. (Some lenders may even require an inspection.) A qualified inspector is trained to find issues that could impact you severely down the road or verify that you have indeed made an excellent decision. They could find issues that will give you leverage during price negotiations as well as provide ammo in securing the loan you want. This un-biased third party opinion is a necessary step in any home purchase.
Bidding To Win
Consider what you can afford and what the market determines is a fair amount. Don’t offend the seller with an extremely low amount. They may not consider any future offers. Size up the value by what similar homes have sold for recently in the area. Go to the city clerks office to find out about any taxes due and ask about any permits issued to neighbors to see if they have plans for their property that impact you. Ask about zoning that may impact your plans.
Make your bid an oddball number. It helps you stand out and appears that you’ve carefully considered the true value of the home.
Examine The Neighborhood
What will your new neighbors be like? Getting the lay of the land is important. Try a few test commutes from your potential new home to work. Drive through at various times of the day. Where is the grocery store, post office, school, etc.? Even if you don’t have children, locations of certain institutions like schools can impact your property value and ability to re-sell.