Whether you are a first-time home buyer or seasoned homeowner,
here are a few ways to prepare for your next move
1. Find a reputable lender and get pre-approved:
It’s not wise to start home shopping before you know how much you can afford. A good lender will tell you how much you need for a down payment plus other closing costs and pre-payables (these are the fees associated with your loan and how much you will need for taxes, home owner’s insurance, and other prepaid expenses). A lender can also advise you on different loan options and how to repair your credit (if necessary).
It is worth the time to get a pre- approval letter from your lender and not a pre-qualification letter. A pre-qualification is simply an overview of your financial history. A mortgage pre-approval starts there, but it usually requires documentation and verification of your income, assets, and debts.
And it will often require a credit check, which will result in a hard inquiry on your credit report.
Sellers prefer Buyers with a pre- approval letter.
2. Create your list of “Must Have” vs “Nice to Have”
Before starting to look for your first home, make a list of those items that are truly must haves, such as room to park a boat, fences allowed, first floor laundry, etc. Know exactly what you’d be willing to live without and what you’d be willing to trade them for. Remember Location, Location, Location.
You can always paint & remodel, but you can’t change the location of your yard or house. Be ready to compromise. If you’re not willing to settle for anything less than your wish list…then you might have to increase your budget.
3. Hire a buyer’s agent (at no cost to You)
An experienced agent will: a) help you with the lingo (contingencies, title, earnest money, assessed value vs. appraised value, etc.); b) provide opinions on price, market conditions and resale; c) work with your best interests in mind; d) help you get creative to win in a multiple offer situation
4. Keep the timeline in mind
When do you want or need to move by? Typically, it takes 45-60 days from the day your offer is accepted to the day you close (Move-in Day). But the entire process of looking for houses can add weeks, maybe months, depending on: how quickly you find the right house, how fast price negotiations go, inspections and financing and so on. Also, the current housing market (Buyer or Seller market) will make a difference in the number of homes available for consideration.
5. Consider selling your existing house first
You may have been through this process once or twice (or maybe more) before, but in a hectic Seller’s Market, sellers may not consider accepting a home sale contingency (waiting for you to sell your house). You may have better luck making an offer on a new house once you have an accepted offer on your existing house. This way, the seller knows you have a firm closing date and you can simultaneously close on both houses.
It’s never too early to prepare for your home purchase. Whether it’s saving for a down payment, investigating your mortgage loan options or checking out the homes online to see
what’s for sale…. we welcome the opportunity to meet with you to discuss these steps and make a plan to help you make your next move.