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The
Buying Process
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 1)
Plan ahead -- From the moment you think about buying a
home, start planning. Home buying is a time-consuming
and demanding process, and it behooves you to utilize
your management skills early on.
Start by requesting a copy of your credit report.
Carefully examine it for errors, and clean it up
before you talk to a lender. Are you currently
renting? Check your lease for an early release clause.
If you'll be subject to penalties, try to time your
closing with the expiration of the lease.
During this planning phase, consider your life over
the next five to seven years. Do you plan to start or
grow a family? Will an in-law eventually move in with
you? Will you be working from home? The number and
layout of the rooms you require will depend on your
answers.
If you qualify for financing based on a dual income,
will you be able to survive on one salary in order to
fulfill a long-range plan, such as one parent staying
home to raise a child? Once you've answered these
questions, establish a plan. Then direct the process
with reference to the plan. Don't let the process
dictate to you.
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| 2) Understand the home
buying process. Homebuyers need to ask questions. Lots
of questions. So choose a real estate agent who has
experience and is willing to explain the entire home
buying process-from viewing homes to negotiating, to
financing, to escrow and closing-in detail. |
3) Stay within your
budget when searching for a home. What can you do to
avoid becoming enamored with homes that are out of
your price range? Monitor your expenses for a couple
of months. Then, based on your findings, develop a
budget that truly reflects your lifestyle. Talk to a
real estate agent who can provide insight into new
home expenses and taxes. Then revise your budget.
It's smart to ask your lender to pre-approve, rather
than pre-qualify, you for a mortgage.
Pre-qualification only tells how much you can afford.
Pre-approval goes a step further. Your lender will
thoroughly evaluate your application-including
verifying employment information and financial
disposition-then clear you for a loan of a determined
amount. Having your loan pre-approved gives you a
sizeable advantage: Your new status as a cash buyer
makes you more attractive to the seller.
Once you learn how much of a home you can afford, stay
within your budget. Just because you've been approved
for a certain amount, doesn't mean you'll feel
comfortable with monthly payments at the high end of
the range. Ask yourself if you can live with these
payments. Do they fit your established budget? If not,
rethink your spending limit. Your new home should give
you great pleasure, not hold you hostage.
When you relay your price range to a real estate
agent, ask to view properties within that range only.
By restricting yourself, you'll avoid disappointment
later on. |
4) During the home
search think with your head, not your heart. Curb
appeal can be a powerful force. It's the buyer's
kryptonite. By disengaging the mental faculties, it
leaves the homebuyer emotionally vulnerable. To
counter its effect, you must be objective. Brutally
objective.
Look at many homes, including an assortment of types
of homes. When you view a property, list the positives
and the negatives. Make certain your furniture will
comfortably fit into the space. Visit at various times
of day to see how much natural light floods the rooms
and check for changes in traffic patterns, especially
at local rush hours. Have an inspector or engineer
pick apart the property. And recruit a friend to view
the home and provide you with objective feedback. Ask
if he or she can picture your family living there and
discuss the whys and why nots. Jot down the points for
later review.
Also, think about how long you plan to own the house.
Would it be difficult to resell? List the negatives.
Could you eliminate or reduce them? |
| 5) Investigate the area
in which you are thinking of buying. Don't stop your
inspection at the property line. Examine the
surrounding area. Is it safe, well maintained and
moderately quiet? Is it convenient to work, schools
and shops? Ask about zoning and that lovely forest of
vacant land across the street. Could the highway
nearby be widened in a couple of years? How far is the
train? Within ear shot? If you're not familiar with
the area, ask friends and colleagues about it. Do your
research. |
6) Understand the
financing. Here's where it helps to be a quick study.
Homebuyers have to contend with an assortment of
mortgage types and the associated jargon. Your real
estate agent can be a great resource.
Get every detail in writing, in particular, the
lock-in rate, points and fees. And request a copy for
your file. You should also request an estimate of your
closing costs, which generally run between 3% and 6%
of your loan. Inquire about prepayment penalties. Have
the lender attach an addendum to your contract that
specifies that no penalties will be imposed for
prepaying the loan. This step could save you a good
deal of money.
Before you get to the table, read all the documents
related to the purchase of the property, and have a
professional review them. You're signing a binding,
legal document. Make certain you understand the
conditions of the loan.
Most of all, remember to call me at 360-910-1570 as a resource. Ask
me to
explain anything you aren't clear on. I'm here to educate & guide you, and protect your
interests.
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