When do you know you are ready to buy a home? Is it when your water heater breaks for the fourth time and your landlord cannot be reached? Maybe you have a cat (or two) living in your home and your landlord is unaware; for good reason, too. You may realize you are ready to buy a home when the reality of owning a home becomes cheaper than simply just renting. Another reason may be that purchasing a home falls in line with your financial needs, future goals, obligations and maybe even your lifestyle. However, you should not make any kind of home-buying decision if basing it on just your income alone. Realistically, it should fit comfortably within your financial means and viewing home buying through foggy glasses can be a common misstep for first time home buyers. Here are some other examples you should consider before purchasing...
Know Your Market
So you are ready to buy a home and want to jump right in and just wing it... great! With so much available information online, in home magazines, seminars, and even in the classifieds section of the newspaper it isn't hard to come across the necessary knowledge needed for you area. You can also acquire more knowledge visiting with real estate agents, their brokers, mortgage lenders, title companies and even real estate professionals offering free training. You can also find real estate guidebooks or check out webinars online and learn about the ebbs and flows of the market to stay ahead. Not knowing the knowledge about buying a home or the market conditions can lead to further problems down the road.
Getting pre-approved is a must. In fact, most real estate agents won't take you serious until you are pre-approved. An agent's first thought when asking if you are pre-approved is how serious are you? Being pre-approved tells the agent that you are ready to buy and knows you won't be wasting, not just your own, their time and resources when finding a home which meets your needs. Being pre-approved allows you to act on a home you find. Negotiating with a sellers agent may be difficult and you may lose your opportunity to purchase to someone else if you are not pre-approved. No one wants to go through the process of a stalled sale because financing fell through.
Submitting Smart Offers
Know your market and be humble! Buyers who think they know better or think they can purchase a home for a steal tend to be in for a long ride; an uneducated buyer isn't much better. Either buyer will offer too little when submitting offers to the seller. In the oddball case a seller accepts, the buyer will then typically ask for too many concessions such as picking up the buyer's costs, make extensive repairs or to have the seller provide a home warranty. Any of these requests could insult the seller, even in a buyer's market, ultimately chasing them away. In a seller's market, the seller will usually just say thanks and move on to the next interested buyer. Especially if the seller did his due diligence to price the home right and prepare it for the market.
Don't Pay Too Much
In some cases you may find yourself in a multiple offer bidding war. It's important to make the same price checks (CMA's) sellers make to price out their homes. Getting comparables and tracking sales prices in your area with your knowledgeable real estate agent will help you make a sound decision when buying your new home.
Dont Fail to Buy Low
Your ultimate goal is to buy the least expensive home on the best block, in the least expensive neighborhood in the best community. Doing this raises the value of your home due to the value of the other homes on the block. This gives you the greatest return on your investment in any market, more-so if you add to or renovate your home over time.
The more you learn the less likely you are to make mistakes. Keeping your emotions in check will also limit the errors made when trying to reach your home buying goals. Being a first time home buyer should be fun and exciting and no one wants to have buyer's remorse.
Take the time to learn, avoid the mistakes, and trust your real estate agent - happy house-hunting!