Buying a home is a major transaction. It involves a lot of research, negotiations, and paperwork. It also requires a good real estate agent, mortgage broker, and home inspector.
Knowing how buying a home fits your other financial goals and life situation is important. Here are some tips for making your home-buying experience enjoyable and efficient.
Find a Good Real Estate Agent
A world-class agent can set you up for success in a big way, whether you are buying or selling. They are experienced in the local market, understand trends, and negotiate well.
Ask potential agents like the Rogers Realtors to list previous clients. Call them and ask about their experience working with the agent and what was good and bad about the relationship.
It would help if you also looked at an agent’s sales-to-list ratio. An agent who can sell homes for more than they are asking is ideal for buyers. For sellers, an agent who can sell their home for under the listing price is also ideal. The agent’s sales should be recent, preferably within the past year. You can find this information online or using a free agent matching service.
Set a Budget
A major step in the home-buying process is setting a budget. This helps buyers understand what they can afford and how a new house fits their financial goals. Reviewing the 28% /36 % rule is a good idea, which suggests that buyers should spend no more than 28% of their gross income on housing and 36% on all debt payments, including a mortgage.
It’s also important to consider the recurring expenses of homeownership, such as homeowners insurance, utilities, and property taxes. Buyers should aim to have enough savings in reserve to cover 3-6 months’ worth of mortgage payments. This will provide a cushion in case something unexpected happens during home-buying or after closing. It will also help buyers avoid a common pitfall, ending up house-rich but cash-poor.
Find a Home Inspection Company
Choosing a home inspector is an important decision in the home-buying process. Look for an inspector specializing in multiple areas to provide a more thorough inspection. In addition, ask potential inspectors for a sample report. A detailed report that includes explanations and graphics will help you decide if they’re the right fit for your needs.
A good inspector should be able to identify structural problems, such as a loose foundation, and safety hazards, like out-of-date electrical wiring. If a serious problem is found, walking away from the deal may be best.
Real estate professionals can often recommend inspectors, but you can also get recommendations from friends and family. Choose a home inspector who is state-licensed and certified by a professional organization to ensure they adhere to high standards of quality and conduct.
Look at Multiple Offers
In a competitive market, it’s not uncommon for sellers to receive multiple offers on a home. This can be a good thing, but it also means that buyers may have to compromise on certain things.
Although offers are generally considered positive signs of interest in a property, certain types of offers or conditions can make a house more difficult to sell. To learn more about this topic, you can refer to the article “What Makes A House Harder To Sell In Minneapolis: The Unspoken Truth.”
When evaluating offers, it’s important to consider factors like price, contingencies, and concessions. Generally, the seller will choose the offer that brings the most certainty to the transaction.
This can mean choosing a buyer with a higher offer or rejecting one buyer’s counteroffer in favor of another. Either way, a smart buyer will prepare by being pre-approved and having proof of funds ready. This will help them to avoid making costly mistakes that can cost them the home of their dreams.
Make a Strong Offer
In a competitive market, the best way to increase your chances of getting a home is to make a strong offer. Start by getting pre-approved for a mortgage so sellers know you can afford the home. Then, be prepared to offer more than the asking price – but don’t go so far as to overpay.
Increasing your earnest money deposit can also show you’re serious about buying the house. Sellers may prefer buyers with skin in the game, especially if multiple offers exist on the property.
Consider including an escalation clause that will automatically increase your offer amount up to a certain limit if another buyer outbids you. However, avoid padding your offer with extra concessions like a laundry list of repairs and nitpicky requests for furniture or other upgrades.
