Be Prepared Before You Buy

Before you buy a home, there will be a few things you need to do to get ready. Here's a list to help you know where to focus your energy, and make the process go as smoothly as possible.

First, you need to know what you can afford. This goes hand in hand with another key goal—getting pre-approved for a mortgage. During the process of getting pre-approved, your lending institution will consider your income, expenses, credit rating and other factors, as well as any equity you may have in real estate you already own, plus what you have saved as a down payment. They will then let you know how much they will lend you. That is essentially how much you can afford for a new home.

Also, don't feel like you need to stick with your regular bank for a mortgage. Shop around to get the highest loan at the best rate. This is where mortgage brokers come in handy, as they are skilled negotiators, and know the ins and outs of lending institutions. They aren't afraid to get on the phone and find you the best rates in town.

Once you know what you can afford, and are pre-approved for the best mortgage loan you could find, start writing down exactly what it is you want in your new home. Do you need a shop? Do you love to garden, or would you loath the responsibility of too much yard?It is especially important for spouses and other family members to know each others needs. That way you won't be getting your hopes up about a property that your husband, wife, or kids for that matter, would never be happy in. We all have different needs, so discuss what they are with your family. Be clear on the issues you may be willing to compromise on, and set boundaries for the kids. It's important to consider their needs in a move, but they need to realize they might not get everything their imaginations can dream up.

Okay, so now you know what you can afford, you know for sure you've got a mortgage when you need one, and you know what you want. Now it's time to find a great Realtor® to work with, if you don't already have one. The right agent will listen to your needs, offer their expertise, and help you find the best home. Their understanding of all the legal lingo takes the stress out of buying and selling.

Now, how about when and how you get the home? Don't be afraid to set conditions on your offer, especially right now when most of the country is in a buyers' market. If you need to wait until your home sells, or your job change takes effect, or after all the inspections you want done are done, then put those conditions on your offer so the seller knows what to expect. If they really want to sell, and you've made them a good offer, these conditions should be no problem at all.

Now, be sure to get any inspections that are relevant to the home you are considering buying. Also, get it appraised, or ask to see the latest appraisal if the sellers had one done very recently. But be clear that an appraisal won't tell you about a sneaky oil leak coming out of that old buried oil tank beside the house, or the mold in the basement walls. Appraisers don't do inspections before they appraise. An appraisal is based on property values in the neighborhood and city, and specific qualities to the home such as size and age. However, if an inspection turns up something nasty, that could lower the value of the home. Similarly, if everything checks out and the home is in great shape, that confirms that it is at or above its appraised value. But an appraisal is important, so you know that what you are paying for the home isn't just based on the owners inflated hope.

When you are buying, be sure you are aware of what the closing costs will be. There can be land transfer taxes, lawyer's fees, appraisal fees, inspection fees, title insurance, and a few other costs that come up. Being prepared means you won't end up floundering at the close of the sale. Considering closing costs before you even put in an offer will make your purchase go smoothly, and let you enjoy moving in to your new dream home.

Happy house hunting!

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