Home Buying Tip #1: Get Pre-Approved Before Applying for a Home Loan
The difference between someone that is pre-qualified for a load and someone that is pre-approved for a mortgage is that anyone can get pre-qualified for a loan.
In order to get pre-approved for a loan a lender would have checked all your financial information and then use that information to determine how much house you can afford and how much money the lender is willing to lend you.
A lot of inexperienced home buyers under estimate the importance of getting pre-approved. Getting your home loan pre-approved with save you a lot of time, energy and disappointment so you are not driving around looking at homes you can’t afford.
You’ll also be able to shop around for the best prices and interest rates. Take your time and do your research to learn as much as your can about fees and other hidden costs associated with the home buying loan.
Home Buying Tip #2: Don’t Make Any Large Purchases
It’s not a good idea to make big purchases like a car or move your money around three to six months prior to buying your new home. Making those large purchases can put your credit profile in jeopardy by taking chances with your credit. I
n general lenders like to see a detailed paper trail of your spending and re-payment showing that you are reliable in order to offer you the best loan possible. If you open new credit accounts, accumulate too much debt, or buy expensive items you’re going to reduce your chances of getting a loan drastically.
Buying Tip #3: Placing the Right Offer
There are two things that should be taken into consideration when placing your initial offer on a home.First you need to make sure that you can afford the price of the home, it does no good to make an offer if you can’t afford the house.
Secondly you need to have a good feeling for what the property is really worth. A rule of thumb when starting off with an offer is to give a fair and reasonable offer that fits your price range while not totally offending the seller.
A lot of people think they should start the bidding low but it all depends on what the market is doing at the time. You can get a good understanding of the house values in the neighborhood you’re searching in by looking at what other homes have gone for in that neighborhood and see how much an average price per square foot.
Bonus Tips: Today, so many sellers fall behind on their property taxes and if you have that valuable information it gives you a great card to negotiate a good deal. To find out, go to the county clerk’s office.
Bonus Tip: Sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific the sellers will think you’ve given the offer careful thought.
Buying Tip #4: Hire a Home Inspector
Not only is getting a home inspection a smart thing to do to protect yourself but most lenders will require you to have a home inspection completed before they lend you any money. The average cost for a home inspection can range anywhere from $200 – $500 but this is a small price to pay that can potentially save you thousands of dollars in the future. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home.
A home inspector’s sole responsibility is to provide you with the information you need to make a more well informed decision on whether to buy or not. Make sure to shop around for a highly rated home inspector and if possible stay clear of home inspectors that may be associated with either the buyer or seller to avoid getting a biased opinion. Just remember it’s better to spend the money up front on an inspector than to find out later you have to spend a fortune.
Buying Tip #5: Keep Your Emotions Out of It
Don’t get too attached to a house where you can’t even make a good rational decision. Buying a house based on your emotional attachment is only going to open you up to disappointment and even worse cause you to make some very poor financial decisions.
A better approach to take is going with your instinct or having that gut feeling about a property and recognizing that you’re getting an amazing deal on a great house. When going with your emotions you’ll get caught up in things like backyards, kitchen cabinets, or color of paint. Just remember it’s an investment.
Buying Tip #6: Scout the Neighborhood
Before you consider buying a house it’s a good idea to check out the neighborhood. Check out the neighborhood at different times of the day and week; morning, night, weekdays, weekends to get a feel of what’s going on around the area. You don’t want to get blind sided by what you thought would be the perfect house for you only to find out that the neighborhood isn’t what you thought it would be.
Do research on the schools in the area to learn if the schools are right for your kids. Even if you don’t have kids it’s still a good idea to research schools because if you plan on selling your house some day it will play an important role on getting top dollar for your house as this may be an important factor for potential home buyers. If you buy a house in a good school district versus bad school district even in the same town, the value can be affected as much as 20 percent.
A lot of people like the idea of having amenities within walking distance. If you’re that type of person look around and see how close you are to shopping centers, grocery stores, restaurants, etc… It’s also a good idea to test your daily commute would be like to see how good or bad traveling to school or work would be.
Buying Tip #7: Beware of Extra Expenses
One thing you need to remember when buying a home are the other cost associated with home ownership. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner association dues. New homeowners also need to be prepared to pay for repairs and upkeep of the house and property. Be sure to calculate these extra expenses into your budget so that you don’t risk losing your house.
Buying Tip # 8: Don’t Try and Time the Market
Don’t complicate things by trying to time the market and figure out when the best time to buy might be. Not only is this frustrating but trying to anticipate the housing market is pretty much an impossible thing to pull off.
The best time to buy a house is when you find the house that’s right for you and one that you can afford of course. The housing marketing is always going up and down based on many variables that can impact it. Waiting for the perfect time to buy a house just may not come and you’ll end up missing out on your chance of home ownership.
Buying Tip # 9: Bigger Isn’t Always Better
Many home buyers can get drawn into the appeal of a bigger, more fancier house but keep in mind that having a bigger house is not always the best option when it comes to houses. The pool of people that search for a large house are much smaller so that if you ever consider selling your house it can be a challenge. If your house is the most expensive on the block you can end up losing money.
The price of your house will only have the value of what your block of houses is worth. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, your appreciation is going to be limited. Ironically the best house to buy for the appreciation is the worst house on the block because you have plenty of room for appreciation. Now if you really fall in love with a particular house and don’t care about the resell value or appreciation then by all means go for it.
Buying Tip #10: Avoid Property Line Dispute
Before buying a house it is critical to have a survey of the property done so you will know what you will be buying. Knowing exactly where your property lines are may save you conflicts with your neighbors in the future. Another thing to keep in mind is that your property tax will most likely be determined from the amount of property you own, so it’s a good idea to have an accurate map of your property drawn.