| 1. |
Talk to a mortgage broker or lender to get preapproved for a mortgage. This will help you determine your price range so that you don't waste time looking at homes you can't afford.
Lenders have tightened up on all aspects of the mortgage approval process. You need a cash down payment, good credit and verifiable income. Lenders require a lot of financial documentation. It makes good sense to work with a mortgage broker or loan agent who can anticipate the documentation that will be required. The sooner you provide the documentation to the lender’s underwriters, the sooner your loan will be approved.
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| 2. |
Find a good real estate agent who specializes in the area where you want to live. Acquaintances that purchased recently are a good source of recommendations. Find out what they liked and didn’t like about their agent and if they’d use that agent again.
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| 3. |
If you are looking in more than one area, use one agent for each marketplace. You'll get the best service if you work with real estate agents who know their market well.
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| 4. |
Use the Internet to save time searching for a home and to educate yourself about local property values. See as many properties as you can, either in person or on the Internet. Ask your agent to follow up and let you know the selling prices of listings you've seen that might have appealed to you. Don’t buy a home solely based on what you see on the Internet. The Internet doesn’t provide information on such things as noise, smells, or anything the seller or listing agent doesn’t want shown.
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| 5. |
Ask your real estate agent to prepare a Comparative Market Analysis (CMA) of a home you're interested in buying. This will help you determine what price to offer. The CMA should provide information about listings comparable to the home you want to buy that sold recently—ideally within the last 3 months. It’s also helpful to have information about currently active listings and those that are pending sale—an offer has been accepted, but the transaction is not yet closed.
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| 6. |
Read the purchase contract and all documents you sign during the course of your home purchase-including the fine print. In today’s market, your purchase contract should include contingencies for inspections, property appraisal, loan approval and the sale of another property, if relevant.
Buyers purchasing a short sale listing (one where the purchase price is less than the loans secured against the property) should include a provision that allows the buyers to withdraw from the contract if lender approval isn’t received by a certain date.
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| 7. |
Don't be shy about asking questions. Most people buy homes infrequently and the real estate business is constantly changing. It's natural to have questions, just be sure you get the answers.
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| 8. |
Hire qualified professionals to thoroughly inspect the property before you complete the purchase. If further inspections are recommended, like for a roof, drainage or furnace inspection, make sure to follow through and have these done.
You should also get estimates for any significant work that needs to be done soon. You may be able to negotiate with the seller to share in some of the cost or make repairs before closing. This will vary from one transaction to the next.
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| 9. |
Have your loan agent or real estate agent prepare a closing cost estimate for you before you enter into a contract to buy a home. If there is time, ask your closing agent for a copy of all the closing documents you need to sign a few days ahead of time so that you can review them before signing.
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| 10. |
Don't assume your real estate agent is a mind reader. Good communication is a key component of a successful real estate transaction.
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| 11. |
Stay involved throughout your home purchase transaction. Let your agent know that you want to be informed of any potential problems sooner rather than later so that you can work on a speedy solution.
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| Have fun. And, happy home buying. |
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