Top 10 Tips to Successful Home Buying
Tip #1: Research Is The Key To Discovery
Home sellers won't call you with an offer to buy a maintenance-free home with a wonderful mortgage. You can find the gems with the help of an experienced real estate broker.A customized computer search will be set up for you so that when properties that meet your criteria hit the market they are sent directly to you. This gives you the ‘jump’ on other buyers to preview the homes immediately. You can view the property from your own home and if you feel that it meets your criteria an appointment can be set to walk through the specific property.This allows you to use your time wisely and efficiently; only viewing properties that you feel interest you and meet your needs. Extensive research will be done on the property that you choose in order to position you to make the best offer for you based on the qualities and pricing of that specific property.
Tip #2: Make A Plan And Get Pre-Qualified
Every important decision needs to be clearly thought out. Developing a home buying plan can help you focus on the important factors and organize the entire process. Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of the panic mode and allow you to take advantage of opportunities. A thorough plan will save both time and money! A network of lenders is available so that you can interview to pick just the right person for you.
Tip #3: Value, Value, Value
The days of 10-30% annual appreciation have passed. Homebuyers in the 1970's benefited tremendously from what seemed like ever appreciating home prices. At this time, you are looking at slower growth while guarding against the possibilities of falling prices, skyrocketing ARM (adjustable rate mortgages) rates and corporate layoffs that can dramatically affect your home values. The classic rule of buying the worst house in the best neighborhood does still apply. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price. This is where Randy excels and can help you understand the market cycles and how they affect the decision you are about to make. He will back up his opinion with statistics that will document this historically.
Tip #4: Create A Top 10 List Of Amenities
When shopping for a home it might help to make a list of the amenities (fireplace, fenced-in yard, new appliances, location, school district etc.) that matter most to you. Establishing "your criteria" early on will save time shopping for your home. Your personal search can be set up on the computer to reflect your criteria that is important to you. Ranking them might help you determine if you might be willing to compromise certain items if you found a property that was well suited for you but lacked some of the amenities on your list.
Tip #5: Fixed vs. Adjustable Rate Mortgages
Adjustable rate mortgages have an initial fixed rate, which is followed by a period of adjustment intervals during which the rate adjusts based on the performance of several key indexes. Typically the initial fixed rate on an ARM is slightly lower than the comparable rate of a fixed rate mortgage.
Fixed rate mortgages allow buyers to take out a long term loan without having to worry about changing interest rates or monthly payments. Most fixed rate loans are offered in either 15 or 30 year terms.
Most buyers will be well served by a fixed rate loan, but each situation is unique. While ARM loans have become less popular in recent years, they can still be a viable option for some buyers - especially those who plan on selling again in the short term.
Whichever loan you choose; make sure that you scrutinize all the closing costs. If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures (your Real Estate Agent has publications to assist you). Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.
Tip #6: Sign A Contract That Protects You
Make sure that the contract you sign on a house has built-in contingencies to protect you. Some of these contingencies would be ones that allow you to arrange financing, inspect the home and negotiate any problems that you uncover, approve the title report, and having an appraisal that supports the price you are paying for the home. Ensuring this contract is written to protect your interests is Randy’s job. His experience will give you the best opportunity for success.
Tip #7: Put Yourself In The Seller's Shoes
You are about to make one of the most important decisions that will affect both your life and the life of the seller. If you take time to understand the reasons the seller bought the home, their reasons for selling, and the home improvements they have or have not made, you'll be in a better position to evaluate the home and negotiate a better deal. In the end, the home buying process excludes the professionals and comes down to the individuals buying and selling the home. It is often an emotional decision for the seller. An emotional concession can sometimes be made that doesn’t cost the buyer anything other than a bit of compassion. Keep this in mind as you negotiate; putting yourself in the seller’s shoes may be all it takes to complete the transaction.
Tip #8: Develop A Mortgage Shopping Chart
One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are 10,000 lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today, you can apply for a loan over the Internet or even use a mortgage broker to shop for your loan with hundreds of lenders. When choosing a lender, you want to avoid apples to oranges contrasts by comparing loans that have similar terms. You would not compare a fixed rate loan to an adjustable rate loan as that would be like comparing and apple and an orange. This is where Randy can help guide you. Over the decades he has worked with many different lenders and companies. It is important to choose a company that consistently closes transactions on time, educates the buyers correctly as to their buying abilities, and communicates well with both the real estate broker and you, the client, how your loan is progressing. A loan that doesn’t close on time can cause a transaction to fail and all the money you have spent on an inspection, appraisal and other items will be lost. Your lender and your real estate broker must work hand-in-hand to complete this process.
Tip #9: Get A Quality Home Inspection
Paying for a qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of dollars for repairs. Your inspector will look over the home completely and give you a list of items identified as potential repairs needed. Randy will discuss these items with you, talk about their importance long-term and if they will affect your appraisal. Together you can then decide which repairs you will request to be made as part of the negotiation process. Randy has a list of inspectors that he has worked successfully with that you can choose from to do your inspection.
Tip #10: Peace Of Mind: Home Protection Plans
To protect both you as a buyer, as well as the seller, it is a good idea to purchase a home protection plan. What exactly is it? A home warranty, or home protection plan, is a service contract, normally for one year, which can protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear based on the terms of the plan. The plan covers certain mechanical breakdowns, while insurance typically repairs the related damage. For example: if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall. The cost of the plan can be paid either by the seller or buyer or even split by both parties. Ask Randy for more information if you would like to know more about this opportunity.