Buying a property can require a considerable amount of research and time. One of the keys to making the home-buying process easier and more understandable is planning. In doing so, you’ll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the home-buying process.
As you begin your search, keep in mind these key steps.
Step One: Determine if You Are Ready
One of the first questions to ask is whether you are ready to buy. If you are renting, some will tell you that your rent money is going down the drain, that you can pay close to the same for a house payment and actually make your money go toward something (equity or value in the home). While cost of renting vs. buying is a definite consideration, you should consider all aspects of home ownership to determine if now is the right time to buy.
- Why do you want to buy?
- Do you know what your want?
- Are you planning to move to a new community due a lifestyle change or is buying an option not a requirement?
- What would you like in terms of real estate that you do not now have?
- Do you have a purchasing timeframe?
- Do you have the money? for financing? the downpayment? closing costs?
- Can you afford the costs of home ownership? maintenance?
- Have you weighed all of the pros and cons of home ownership?
Step Two: Loan Pre-Approval
Before you begin to seriously shop for a home, it makes sense to know your price range or just how much home you can afford. It is beneficial to find the amount of money you can borrow prior to your house search, otherwise you could be spending time and effort looking for a house that does not meet your affordability level. Often the first step a real estate agent will take is prequalify you for a loan. This might be a ballpark figure or estimate based on typical loan setups, or you may formally apply for a loan and become preapproved. You can enhance your buying power by getting pre-approved or pre-qualified.
Step Three: Make a Checklist for Buying
You’ll save yourself many hours of shopping if you narrow your home search and make a list in advance of the features you must have, would like to have, absolutely do not want and would prefer not to have. Start by using basic measures such as general location and affordability, then you can refine your search and focus on homes that offer the most desirable features.
Location is crucial. The choice of area or neighborhood depends on your own particular needs and tastes, some of the following may be important to consider: quality of schools, property values, safety, traffic, future development, and proximity to schools, hospitals, shopping, parks, beaches, theaters and other public amenities. A desirable location can make all the difference if you anticipate reselling the home within a few years.
Style of Home. Once you’ve settled on the “where” it’s time to consider what type of home. There’s a wide selection of homes out there — which is one is right for you? Depending on how much maintenance you want to do, how much privacy you need, or if you want something custom built to suit your particular tastes, each home type has its own features and benefits. Single family home, multi-family home, condominium, ready-to-move-in or fixer-upper, depending on the different stage of your life — whether you have children or are retiring — one type of home can be more attractive than the other.
Wants vs. Needs. Beyond determining number of bedrooms and baths, you search should focus on features which are absolute requirements and those amenities you’d like to have if possible. Homes meeting basic needs may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Consider your priorities and if you can’t get a home at your price with all the features you want, then determine which features are the most important. Consider too, your needs in years to come.
Step Four: Search for Homes
With the abundant choice of housing options in the market today, the challenge becomes finding the property which best meets your needs. Consumers have access to more information today than ever before. The Internet has become a great resource for finding out about recent home sales prices, market trends, homes on the market, neighborhood/area statistics and the home-buying process.
We make it easy! Real Estate One offers home buyers the most efficient way to search homes in Michigan through 1st to Know. Register to receive automatic email alerts on properties that meet your specifications as they become available for sale. We also have a texting program, text "MYINFO" to 59559. The system will walk you through obtaining instant info on any listed home in the state of Michigan delivered straight to your smartphone.
The search can get complex so you should maintain a file with information on each of the homes you like. Rather than rely on memory, make notes about the homes you visit and review these to help you start narrowing down your choices.
Step Five: Choose a REALTOR(R)
Buyers are looking at a moving target in a marketplace that is never static. Researching recent sales and the price of properties on the market should give a good indication of property values and an understanding of the real estate market in the area which you are looking. It is important to know as much as possible about the choices in preferred markets and the best way to do that is by working closely with an experienced professional. A Real Estate One sales associates can help you through the home buying process from start to close. They can:
- Help you determine how much you can afford when purchasing a home, as well as recommend lenders and work with lenders on your behalf to prequalify you for a loan.
- Provide detailed information on all homes listed for sale in the Multiple Listing Service (MLS). While you can find houses on your own by searching online, looking through the real estate section of the newspaper or attending an open houses, an agent is the best source for complete information on all homes, including how long a home has been on the market, its features, the neighborhood and school system, and more.
- Help you narrow your search and arrange showings for houses of interest. By making note of what you like and dislike they can help you find the ideal match for your specific needs.
- Answer questions about the current market, interest rates and other home buying concerns. As your source for information, an agent can also refer you to other specialists whom you will need, including a home inspector or a lender.
- Negotiate on your behalf when you when you are ready to make an offer on a house. Your agent can assist you in determining exactly what to offer, not only in price but also in other factors affecting the purchase. The agent will write up the offer and present it to the seller’s agent.
- Guide you through the buying process making sure all of the necessary steps are completed, such as securing a loan, getting an inspection, completing a title search, and finalizing items right up to closing on the deal.
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