- Posted by hinged
Congratulations! You’ve made the decision to jump into homeownership. There is nothing like the sense of satisfaction you get pulling up to your own home for the first time. You have achieved the American dream.
To reach that blissful moment you will have to navigate a minefield of decisions.
Here are five helpful tips to help you on your way.
1. Location. Location. Location.
Do your research. You need to find your town and pick a neighborhood. Online search engines can be helpful as a starting point for finding out about the basics like size, schools, taxes, house prices, and amenities, but you need to talk to people. If your friends like living somewhere, chances are you will too. Wander around, go in and out of stores, buy groceries, eat at a restaurant, buy a cup of coffee. To find out about a neighborhood, walk around or better yet, bring a bike and go for a ride so that you can cover more territory.
2. Finding a realtor
Find a good, experienced local realtor. As with choosing any professional, it is important to talk to a few and ask around. You will be spending a fair amount of time with this person or team, so it is important to find someone you’re comfortable with. They will be advising on the merits and faults of each home and assisting with negotiations so find someone competent whose opinion you respect. If you find a home online that you are interested in, don’t assume that you will get a better deal by going directly to the listing agent. It will be hard for them to be neutral representing both parties when they have been working with the seller for a lot longer. In most cases, the seller’s contract with the realtor requires them to pay the same commission no matter who brings in the buyer. The more the house sells for the more the realtor will make.
3. Getting that mortgage
Talk to some banks and mortgage brokers and start an application before falling in love with the house of your dreams. A pre-approval letter can be a helpful tool to make your offer stand out when you start negotiating if you do not have the assets to purchase all cash. This process can take longer than expected. Therefore, if you know you will need financing to close, you should start the pre-approval process early. The online lenders are great for comparing rates and costs, but if you are self-employed or not a standard W-2 employee with anything unusual in your history or financial situation you will probably need personal contact. Another important thing to remember when considering a mortgage and size is that buying a house is usually not the end of the costs. Depending upon your interior design plans, landscape plans, and furniture, the costs associated with a move and getting the house exactly as you want it could cost up to 10-20% of the purchase price of the house. If you’re looking for some fantastic local experts to help beautify and personalize your new home we would encourage you to explore the award-winning design teams showcased at Hinged. Even if you could afford to pay all cash, given still low-interest rates, and the ability to deduct at least a portion of the interest, it never hurts to understand what rate you can get on a mortgage.
4. Which home is the right one for me
There are always trade-offs. The house with the great kitchen has a master bedroom with tiny closets. Great family room, really good floor plan, but run down and on a busy street. Compare pros and cons or assign a value to all of the characteristics you’re looking for and go for the house with the highest score. The real benefit of these exercises is that often you will find yourself hoping the house with the great tree in the backyard will be the winner while you’re adding up the scores. Assigning values or listing pros and cons is subjective. The home you want to win is your heart’s desire. That being said with Hinged it is easy to plant a tree in the backyard or redo the kitchen, but it’s impossible to change the location, so try to stay a little bit objective and go for the best location you can afford, even if it means a kitchen renovation in the future. In the long-run, you will be happier and you will have made a better investment.
5. Submitting an offer
Once you have found a house that you want, how close to the asking price can you make your initial offer? Come in too low and the seller won’t take you seriously; too high and you could be putting extra money on the table. Listen to your realtor, and do some digging online. See what the current average spread between asking and selling price is in your market. The spread goes up and down as market conditions shift to favor buyers or sellers. Most people are emotionally attached to their homes, so if you start out too far below the current market you run the risk of angering the seller, or in a hot market, losing the house to another buyer. A strategy of making low offers and moving on to another house if there is no response from the buyer can work if similar homes are on the market and you can stay emotionally uncommitted to the property you are hoping to call home.
At the end of the day, no matter what house you buy, once you have moved in, decorated and stuck pictures on the fridge, it will be the perfect home.