Are you in the market for buying a home? Congratulations if so! I think 2009 could be a good year to buy. Interest rates, while all over the place, appear to be moving generally lower. Home prices have come down in all markets by and large, dramatically so in some areas.
If this is your first time home buying journey, let me offer up three key elements you must know and do before you really get going – let’s call these “must do’s”.
1) You must know “how much” home you can afford.
Whether you are buying a new home or existing one – it really does not matter - you must know how much home you can buy. Remember this – the biggest mistake first time home buyers make is looking at, or worse, purchasing too much home. Therefore, I highly recommend you get yourself “pre-qualified” with a mortgage professional first. If you are already looking at homes – that’s o.k. – just meet with a lender at your next earliest convenience. Also remember – what you can qualify for is usually more home than you can truly afford. I can’t imagine actually paying the mortgage on what I could “qualify for” – I can’t afford it. Keep this in mind.
Since this is your first time looking for a house, you probably don’t have a mortgage person selected. I highly recommend networking with your local friends who have bought a home recently. Personal referrals in a local market are the best method to select a loan officer.
2) You must not let your realtor control you.
If you’re buying a home, chances are you’re using a realtor. I’ve worked with hundreds and hundreds of realtors over the past 20+ years. Many I know work extremely hard – and in ways you don’t see.
But, let me make two points about realtors:
- The majority of all realtors I’ve ever worked with have been professional and ethical.
- Realtors make a living by selling homes. What separates the pros from the amateur realtors is their ability to get you to buy a home quickly.
The rub here for you making your first time home buying trip is you must stay in control of the situation with the realtor – whatever that situation is. If you need to look at more homes – let the realtor know that. If you can’t stand a home – speak up and let them know. The realtor’s motivation is to sell you a home – the quicker the better. If they can control the situation – they can more easily sell you a home. I’m not saying the realtor is not there to help, but I am saying they want to get you in a home quickly.
Don’t be bashful about asking the realtor for first time home buying tips. See what they know – pick their brain. If you get the feeling they really have no clue about the market – move on to another realtor – and quickly!
3) Get yourself a home buying checklist.
I’ve mentioned this before – and will say it again…. The No. 1 first time home buying tip I can give you after knowing how much home you can buy, and making sure you are in control of your home-buying experience – is to get organized with a checklist. I recommend the free home buyers checklist from the Department of Housing and Urban Development – or HUD. Get one and use it. The link is found below. Print it out several times and have one handy on your next home visit.
Buying a home is an exciting time, and buying a first home is not only exciting, but new (and stressful). The more you can control your elements, learn as you go and not get in a hurry – the greater your odds that the home buying experience will be a great – and financially smart one – for your family.