Preparing to Buy a Home

Buying a home in 2013? If so, here are some tips for preparing to buy a home.

Save your cash. You’re going to need it for your down payment and closing costs. Save at least 3% of the purchase price to put toward closing costs, even if you’re asking the sellers to chip in. The lower the price of the home, the higher the percentage you should save. For your down payment, you’ll need at least 3.5% for an FHA loan, and for a conventional loan, you’ll want at least 10% down. If you can put 20% or more down, that’s even better and will go a long way toward getting you the best rates and terms from your lender. To help you save, consider setting up a separate “home” savings account into which you make regular deposits with each paycheck and from which you make no withdraws. Ever.

Do your research. Part of preparing to buy a home is research, research, research. By the time you’re ready to get in the car and start looking at homes, you should have logged hours of internet research. From financing to home prices and from neighborhoods to local real estate agents, you’ll need to learn about all of it. By being informed, the process will be more manageable and won’t seem so intimidating.

Check your credit. Go to AnnualCreditReport.com to get your free credit report from all three credit bureaus. You can’t get a free score from the site, but you can at least check the information that’s in their files and ensure it’s correct. If there are errors, get them fixed BEFORE you apply for a mortgage as it can sometimes take a while to get things straightened out. Also, now is NOT the time to open new accounts, close old ones, or to make any large purchases (cars, boats, furniture, etc).

Check your budget. Now IS the time to crunch numbers and see where you stand financially. It’s important to know how much money you have coming in and going out each month. This will help you set a target for your mortgage payment so you don’t overextend yourself financially.

Talk to a Realtor and a lender. If you don’t know any real estate agents, you can start by asking friends, relatives, and colleagues for recommendations. You can also search online. A couple of sites provide reviews of agents in your area. Start by looking at Zillow and Yelp. Trulia is also helpful. Talk to several agents and set up a meeting. You want to be compatible with the agent you choose. After all, you’ll be spending a lot of time together while you’re looking for a home. To get a feel for how we can help you buy your new home, come to our first-time home buyer’s class, being held Tuesday, January 29th at 7pm. We’ll walk you through the home-buying process and give you an overview of current market conditions. This no-obligation class is FREE, and you can register here.

Once you choose an agent, they can provide recommendations for a lender. Talk to several lenders and shop for the best rates and loan terms.

Preparing to buy a home is a lot of work. Contact us to help you get started!

 

 

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Buying and Selling During the Winter

Happy Holidays!

I’m often asked if winter is a bad time to be buying or selling.  My answer is always the same: Though there are fewer properties on the market and therefore less to choose from, buyers will often have more negotiating leverage than they do in the spring, when sellers are confident and buyers are plentiful. This is especially true if a home has been on the market for many months. If a property is new, you can bet the seller is on a deadline. Given a choice, most sellers would prefer to wait until spring. 

Sellers: Buyers who are looking when it’s cold and snowy are much more likely to be very serious buyers on a deadline, so don’t rule out an “off-season” listing. As an added benefit, it’s often less disruptive if you’re still living in the property since there are fewer showings. This past week I wrote two offers, one of which was competing against two OTHER offers, all within eight days. In winter, it’s more important than ever to price it to sell! And note to buyers: Don’t assume you have plenty of time, even in the midst of winter, as we found out ;ast week. But you might as well start looking now—if nothing else, it will give you a running start in the spring since you will already be familiar with the market to better “know it when you see it,” and you may get lucky and find a deal.

If you know someone looking to move, please contact us. And if you’re thinking of selling, we’ll be happy to provide you with a free market analysis of your home and review of statistics in your local neighborhood.

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