Buying a home is a big step for most people, which is understandable. It will likely be the largest purchase you have ever made. Because there is so much involved in purchasing a home, it makes sense to try and prepare as best you can for the experience. The better prepared you are, the smoother the process will be and the better you will be able to weather any unexpected hurdles you run into along the way.
Working as one of the top RE/MAX Real Estate agents in and around Ashland MA, for the past 28 years, I can tell you that when you are well prepared to buy your first home things will go a lot more smoothly! When your ducks are all lined up, you will be able to proceed with the home buying process much more confidently.
That being said here are six excellent tips for making the home buying process easier.
1. Get your finances in order
The first thing anyone buying a home needs to do is make sure that his or her finances are in order. If you are like most buyers, you will be approaching lenders for a mortgage, and you can expect those lenders to want a lot of information from you – proof that lending to you is a smart business decision.[Related: Understand Lender Credit Lingo & Jump to a Higher Credit Category]
Your mortgage, and how much you pay in interest, will hinge on your credit score. It is extremely important to boost your score as much as you can if you want to save thousands, possibly tens of thousands, of dollars on your mortgage.
You should request a credit report from the three major credit report companies to get a clear picture of your status. The Fair Credit Reporting Act (FCRA) requires that these companies give you a free report every 12 months if you request it, so if you haven’t gotten one recently, you can do so at no cost. If you have requested one within the last year, it is still worthwhile to pay the fee to get another report so you can have accurate information on your credit.
Carefully review the report and clear up any errors. If your score is fairly low, consider working on improving it if you want to get a better interest rate.
2. Get pre-approved by a lender
You need to know how much you can spend on a house before you start shopping. The best way to determine your budge is to get pre-approval from a lender. It is a good idea to shop around for your mortgage, as you may get better results from one lender than another. They will be looking at your credit and your income to determine what you can borrow.
Keep in mind that pre-approval is not full approval. If your credit status or employment status changes in a negative way between the time you are pre-approved and when you actually try and buy a house, you may not be able to get the loan on the same terms, or at all. As soon as you are pre-approved, it is advisable that you get started shopping for the home.
3. Find a great real estate agent
There is no law requiring that you hire a real estate agent to buy a house. But if you want to get the best deal for your home, and find a home that really works for your needs, a realtor can be extremely helpful. Finding a great Realtor is a process that will require some effort on your part, but it is worth it. Interview at least three or four different agents to find someone that you feel comfortable with.
Ask important questions, including:
• How many homes have you sold in the last year?
• How close was the negotiated sale price compared to the sellers asking price?
• Do you have any recent references – clients I could talk to?
• How familiar are you with local schools and neighborhoods in the area?
These questions should give you a better understanding if you are working with a rookie or a top local professional.
4. Get your timing down, for when your lease will end
You don’t want to be without a place to live, so you need to buy a house and close on it before you lease ends – but hopefully not too early. There is no need to pay any more rent money than you have to. Discuss the timing of your home purchase with your real estate agent. He or she can give you a good estimate on when you should start shopping and how long you can expect to wait for the sale to finalize so you can move.
5. Target areas and neighborhoods you like
This is another area where your real estate agent can prove invaluable. A good realtor will be informed on all the neighborhoods in the area where you want to buy a home. You can explain your goals and dreams, what you want out of your new home, to your agent. Then he or she can direct you towards areas that will work with your budget and your lifestyle needs.
6. Have clear goals
Knowing what you want before you start shopping is important if you want to save time and be satisfied with your purchase. Take some time to write down all the things you want out of a home and bring this list to your agent. He or she can go over the list with you while keeping your budget in mind, and help you clarify what things are the most important.
Buying a home is often about making compromises. When you know what is most important, you can look for homes that have those qualities. Who knows, you may find one that has everything you could ask for. But if you don’t, you will at least have a home that works for you and your needs.
Bill Gassett is a nationally recognized Real Estate leader who has been helping people move in and out of the Metrowest Massachusetts area for the past 28 years. Bill works at RE/MAX Executive Realty, one of the largest RE/MAX firms in Massachusetts.