Home Buying Tips

Get Preapproved.

Buying a home has additional costs including taxes, HOA fees, down payment, closing costs, etc. that should be considered. Skip the heartbreak and know what you can afford before the house hunt begins.

Our first recommendation to all buyers is to get PREAPPROVED, not just prequalified. Prequalification is simply an estimate of what a lender MAY be willing to lend you, but a Preapproval Letter confirms in writing how much the lender is willing to lend after thorough examination of your finances. It tells the seller you’re a serious buyer/candidate; a result that could give you the upper-hand compared to buyers without preapproval.

We HIGHLY recommend visiting with a handful of lenders to ensure you understand all home-buying options (FHA vs. Conventional Loans, and so on). Not all lenders are one in the same. Visit with your local banks, ask for lender recommendations, and use the internet to compare rates. Don’t let the virtual lenders scare you, as there are large lending companies with competitive rates. One lender may approve you for $180k, while another might approve you for $220k. Do your research and ask if lenders offer discount points. We recommend obtaining at least three quotes.

A friendly reminder - the better your credit, the better your approval. If possible spend the months or year prior to preapproval making sure your credit is good, debt is low, and spending is contained.

Set a budget & your expectations.

Once you’ve been preapproved, set a fixed amount you’re willing to spend and stick to it. Don’t let all that glitters deter you from what you can economically afford.

Keep in mind- your first, second or third home are rarely your “forever” home. Use this as an investment and stepping stone toward that dream.

Make a list of Must-Haves and Must-Nots.

1. What does my home look like?

Look realistically at what you can afford and what you’d like in your future home. Are you willing to put in sweat equity to afford the house near downtown? Are you wanting move in ready?

2. What are my needs?

Is 2 bathrooms a requirement? A large backyard for the kids? A space to entertain?

3. What are my deal breakers?

Are small closets or little kitchen storage issues? Will a two-story home be a physical hindrance?

4. Are there neighborhoods I’m interested in?

Do you have your sights set on certain neighborhoods because of the great school district, the short commute to work, or it’s locality to entertainment? *Make sure to drive these at various times throughout the day, visit with neighbors and local agents, look up crime stats, map the nearest hospital, test out the commute and local attractions to determine what it’s truly like.

Communication. Communication. Communication.

The advice is two-fold. First, hire an agent that excels at communication. A skilled agent will be able to adequately explain and guide you through the home buying process. In addition, they’re your direct line to the seller. They should handle matters efficiently and eloquently. This includes understanding the seller’s motive to sell and how you can speak to that. We advise our clients to write a letter to the seller explaining why they love the house & want to purchase. Seller’s don’t always settle on the highest offer. A good agent will uncover motivations and help you get to the heart of the matter.

Don’t be afraid of the process.

Home buying is a multi-step procedure. Educate yourself and seek out the knowledge and advice of a well-versed agent. Don’t be afraid of rejections or multiple-offer deals. Ask yourself what you’re willing to spend and how that relates to your budget. And keep in mind, once the house is under contract and an inspection has been completed, this often leads to further negotiations.

Once you’re under contract avoid large expenditures.

Lenders often caution buyers to avoid large swings in their accounts while under contract. This includes taking vacations, buying a new car, purchasing new furniture, etc. A big spending spree can alter your debt-to-income ratio, directly affecting your credit rating. Steady accounts verify you will have substantial funds to handle a mortgage. If a big purchase is necessary, contact your money lender first. Best rule of thumb is to avoid dipping into savings or using your credit card for superfluous items.