Smart Tips for Entering the Real Estate Market
With the recent economic downturn and challenges in obtaining mortgage financing, entering the real estate market can be daunting for prospective first-time homeowners. While it might be intimidating, don't be deterred: The dream of home ownership is still very much alive, and home buyers with good credit and a practical, strategic approach can find excellent properties at affordable costs throughout the United States. From setting a feasible budget to obtaining a loan through a reputable lender and using a professional Realtor to find a property, potential home buyers can be confident that they will achieve their goals.
Tips for First-Time Home Buyers
Anyone shopping for a home should follow these tips. But first-time home seekers, especially, should heed the following advice. These tips will prepare a buyer for the home selecting and purchasing process, as well the inevitable hiccups that accompany the unique journey that is buying a home.
- Know Your Financial Situation: Donï¿½t start shopping for a home until you know what you can afford. Get pre-qualified for a mortgage, in which a mortgage professional analyzes your expenses and income to determine what is the most prudent amount of money you can afford to borrow. Also consider how much your ideal monthly payment should be, and stick to that number. Knowing these figures will give you the best framework in which to search for a home. In some cases, you might learn that you might not be ready to take out a loan. Most major lenders would prefer that a buyer have a 20 percent down payment, which protects both buyer and lender in the case of property-value fluctuation, but there are programs that can accept buyers who donï¿½t have as much money on hand.
- Hire a Realtor: While itï¿½s fun to search for properties on the Internet ï¿½ and fun, too ï¿½ smart home buyers use the counsel of a Realtor, who is a licensed real estate professional in your area. Realtors consider their clientsï¿½ best interest first and will aid you in selecting neighborhoods, properties and negotiation.
- Set Your Parameters: Once youï¿½re pre-qualified and have a Realtor, sit down and narrow your choices. Which ZIP codes or neighborhoods are most desirable? How many bedrooms do you need? Look at school districts, access to shopping and entertainment, and nearby places of worship to determine the right environment for you and your family. Drive around neighborhoods at night and ask questions about life in the area: locals can tell you a lot about the condition of the community you select.
- Remember Added Expenses: You may have found the dream house at the dream price, but make sure to consider the total cost before you make an offer. What are the homeï¿½s property taxes? Is there a HOA (homeowners association) fee each month? How much will it cost to insure the home? Are there records showing history for water and electric bills for this property? Finally ï¿½ and sometimes most critically ï¿½ what would your closing costs be? Some lenders can roll the costs of closing into the total of your loan.
- Stay Smart: Youï¿½ve done your research, shopped within your means, consulted a professional and have found a property in the right neighborhood that meets your needs. Before completing the purchase, be sure to have a final walk-through, where you can see the home once more and inspect its condition with your own eyes, and a complete inspection by a licensed professional. Many Realtors suggest that clients get a home warranty, which protects new homeowners from sudden surprises such as broken air conditioners or other surprises during the first year of ownership. Enjoy your home!