While buying a home is not necessarily easy, there are many tips and techniques you can follow to help simplify and streamline this confusing process. Regardless of whether or not you're buying a home for the first time or if you're a seasoned home buyer, there are several necessary steps you can take to secure and protect your financial future and current well-being. No matter why you're purchasing a home or a piece of land, take a moment and read through these steps to simplify the process and ensure your overall financial health is not compromised throughout the process.
Steps to Take Before Buying at Homes
The following steps should be taken before you ever begin your property search:
When Making an Offer on a Home
So you’ve found a home that you absolutely love and you're ready to make an offer. While this is an exciting time, there are several tips you must follow to help simplify and streamline this process:
Steps to Take Before Buying at Homes
The following steps should be taken before you ever begin your property search:
- Fully Understand Your Financial Situation – Before you begin the search for a new home, or even before you start “window shopping,” it's imperative to fully understand your current financial situation. Take an inventory of your liquid assets as well as your current FICO credit score (visit Your650Score). Understand how much money you can spend each month on mortgage payments and the miscellaneous fees associated with owning property. Without this understanding, it's practically impossible to determine whether or not a mortgage offer is healthy for you financial life.
- Become Pre-Approved – While many potential homeowners wait to undergo the pre-approval process until they've found a home, this often results in disappointment once they uncover they do not qualify for a loan large enough to comfortably afford the house. Therefore, after you've assessed your financial health, the next step is to become pre-approved for a specific loan amount. This process also gives you buying power over those who are not pre-approved.
- Find a Well-Qualified Real Estate Agent – After you've been pre-approved for a mortgage loan, do your research and find a reputable and respected real estate agent or agency within your area. Because the home seller is the one who pays realtor commissions, there's no reason a homebuyer should avoid the help of these knowledgeable professionals. In many cases, if you have an excellent real estate agent, you can garner lower home prices and greater deals through their negotiating power.
When Making an Offer on a Home
So you’ve found a home that you absolutely love and you're ready to make an offer. While this is an exciting time, there are several tips you must follow to help simplify and streamline this process:
- Review the City Planning Department – If you live in a city/suburban area you should visit the local city planning department; however, if you live in a more rural area, you should visit the county planning department. Because a home purchase is a long-term investment, it's important to determine what's being planned to be constructed around your home. In many cases, understanding the future of your immediate surroundings can help determine whether or not your home value will be positively or negatively effected within the next several years/decades.
- Review Previous Utility Costs – Your monthly mortgage payment isn't the only bill you'll have regarding your new home. One of the most common mistakes made by home buyers is being able to afford the mortgage payments, but unable to comfortably afford the utility bills and property taxes. Remember, owning a home comes with a myriad of monthly and annual fees. You must calculate these fees into your overall monthly budget before making an offer. Failure to do so may result in being financially strapped or over-extending your financial output, which severely reduces or inhibits your ability to save.