Deciding on becoming a homeowner can be a serious decision, it often begins with an emotional trigger. Maybe you’ve been saving for 3 years for a down payment, or you just got married. While getting excited about a home is wonderful, some calculated prudence should be present in the decision. So there you are on your lunch break or in an awkward waiting room flipping through your phone as you start to notice those little zeros at the top of the screen indicating hundreds of thousands of dollars. “Can I afford that?” you ask yourself.
Wait to speak with a Lender
It’s unfortunate but Lender’s get overlooked in the beginning stages of buying a home. Lenders should be the very first person you consult with when deciding whether or not to buy a home. Granted, looking at homes is more fun than talking about Debt-to-Income but without knowing what you can afford, looking for homes is utterly futile. A great Lender also poses as legitimate leverage to help you stay competitive with your offer. An easy to reach, articulate and knowledgeable loan officer could add great value to your offer, because of the integral position they hold as the holder of funds until closing. This benefits both sides of the transaction. The loan officer should be communicating confidence in your qualification and the thoroughness of their loan process. The Sellers want to get as much money as possible, and knowing they shouldn’t need to worry about their buyer’s financing falling through puts you and the Sellers exactly where you want to be – at the closing table.
Hire a Realtor
Your realtor covers a multitude of responsibilities but the most important one is representing your best interests as a fiduciary. This agreement of representation by the realtor as your fiduciary should be in writing so as to hold them accountable should they compromise that promise. Is it Real Estate Agent or Realtor®? A Realtor® is a real estate agent who is a member of the National Association of REALTORS®, which means that he or she must uphold the standards of the association and its code of ethics. They are each capable of carrying out the exact same responsibilities however, only Realtors® are held to a code of ethics. Competence is obviously extremely important when interviewing Realtors, but it also has to be someone you like. You’re going to begin a long road with this person and may end up speaking with them daily – for weeks. They should also be someone who understands and can help focus your goals and is able to execute those steps necessary to achieve those goals.
Settle for less
After a few weeks of searching the exhilaration and anticipation may start to fade away. Your eagerness may lead you to offer on homes that are less than what you originally sought out for. Remain vigilant, don’t settle for less than what you want. A home should be a long term commitment, and your search should reflect that. Take your time, make intentional offers, and stick to your priorities. You don’t want to end up in a home you dislike because you got impatient.
Offer more than the home is worth
The highest offer is not always the best offer. It seems contradictory, but it’s true. There are ways to write your offer that will keep it competitive without offering tens-of-thousands of dollars over asking price. Offering more than the home is worth puts both you and the seller in risky territory. If they accept your high offer and it appraises for less, unless the difference can be negotiated you can’t get the home, and the deal falls through. This means the sellers have wasted a month of their time and you’ve wasted time and money on inspections and option fees that you won’t get back.
Go for broke
If buying a home is going to leave you penniless then you should not buy a home. The move itself can get expensive. Movers, Lease Termination Penalties, and deposits if you’re starting new services for things like energy and water are expenditures to keep in mind. After you’ve purchased the home
Insurance, Taxes, Repairs, and Utilities are just some of the mandatory expenses you’ll need to budget for, which may seem fine to those who have gone through this before, but for First Time Homeowners these costs can cause a slight case of sticker shock.
Get an inspection
Without an Inspection, you risk the unknown. You risk paying more than you should, for a home that needs work beyond your means. You risk the safety of your family and your neighbors. This isn’t just for pre-owns homes either this goes for new construction too. You’re only going to get one Option Period to get a professional’s documented report on areas of concern before you’re locked into a contract that could be impossible or at best, costly to exit.
Give up too quickly
The reasons for losing out on a home are as numbered as the blanks on the contract because each one is a negotiating point. The Sellers Agent will most likely not tell you why you lost out either only adding to the frustration. The Listing Agent for the Seller is representing the Sellers best interest, so in many cases you will never get much information out of them. It’s important to be persistent and to have a Realtor and a Lender diligent in their efforts to deliver you into the home you choose.