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There is nothing more fulfilling than owning your own home and despite the rocky road of the past several years in the real estate industry countless Americans are making the dream a reality. With interest rates at historic lows and home prices to match – this is an excellent time to buy a home.
But if you do venture into this exciting stage of life, we advise you to do it with care. It is essential to make decisions carefully, at the right time and with the best guidance.
Do Your Shopping for the Right Agent
When you shop for a home, the most important first step you should take is to choose the right agent. Rather than going for the first person you see in the phone book or hiring someone just because you know them socially, take the time to do your homework. Elements of a strong agent include experience in dealing with buyers, familiarity with the vicinity, accessibility and a good amount of time devoted to the career. You should feel comfortable with your agent, have a relationship of trust and be able to communicate well with them so you can relay your needs. If your agent is unable to listen to your needs you could end up making costly mistakes that could even cost you the home of your dreams.
Know What to Expect in Home Inspections
Many prospective homeowners do not realize the significance of a home inspection. When buying a home the inspection process is not only critical to finding any major (or even minor) issues with the property but it is also an important part of the lending process. Most lenders will not move forward without an inspection. They want to confirm that the property is viable and lines up with the appraiser’s valuation of the home. When you work with a reputable real estate agent or broker, chances are they will refer you to one or more preferred inspectors that they have worked with in the past.
Though the cost of an inspection is relatively minimal at anywhere from $250 and up, the potential savings can be in the thousands if not tens of thousands of dollars. This is why it is vital to use an inspector that is known to be thorough and qualified to review everything. Keep in mind that not all things in a home are covered in an inspection. If any concerns do arise through the process, many times the seller will either provide an allowance to have those concerns resolved or they will work to rectify the issues themselves.
Be Choosy When Selecting a Lender
Not all lenders are created equal. Some may advertise interest rates that are lower than everyone else’s but they will likely roll those same “savings” into other fees or charges. Other lenders may have a grueling application process that results in months of frustration and even rejection if all requirements are not met with. Like with most other services in the real estate industry, it is a good idea to properly research the lenders you are considering using. Ask your real estate agent if they have any references for known lenders in the area. There are other considerations such as you may prefer to work with a local bank for faster processing and better long-term communications.
Regardless of your choice, it is best not to jump at the first one that comes along. Not only can you shop for interest rates but you can also compare fees from one bank to the other. Once you do have a lender on board, obtaining a preapproval letter before shopping for your home will not only give you leverage against competition but it will also give you a benchmark on what you can afford.
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Buying a home is the largest financial transaction of a lifetime for most people and it is also the most coveted experience for many more. By making good choices and having the right people on board with you throughout the process, you can and will be successful in your home buying ventures!
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