Probably the single most important investment you will ever make is the purchase of a home. Finding the right home for you can be a lengthy and arduous process, using up most of your free time until it's finished.
As the consumer, it's up to you to ask questions, pay attention to details, and keep records about what you've seen -- including photos -- for comparison.
Know Your Wants And Needs
Before embarking on the long journey of house hunting, you must know what your wants and needs are.
Sit down with pen and paper and list all the features you care most about:
- Looking for a house in a particular city, school district or neighborhood?
- Exactly how many bedrooms and bathrooms do you need (or want)?
- How about off-street parking? Do you need a 1-car garage or 2?
- Are you self-employed? If you have a home-based business, check for restrictions in the area.
- Are you looking for a finished attic or basement?
- Would you prefer a 2-story house or ranch style home?
- Type of heating?
- Will you need central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- A house in a high-traffic area.
- An airport, train station or highway in close proximity.
- A home in need of a lot of major repairs.
As you look at houses, keep these items in mind. You may find that your lists change from time to time as you do more looking. You'll want to add or remove certain features you can't live with, or perhaps you'll become willing to make compromises on certain items.
Realize that you most likely will not find the "perfect" home. As experienced homebuyers will tell you, perfect homes are not found, they are made perfect through patience and hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. Now is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize that it is important to check your credit report periodically to make sure it is accurate. You should pay in full any past due amounts, or negotiate a settlement price to close the debt.
Perhaps you have a past due credit card debt, for example, that has been entered into collections in the amount of $1,100. The company may be willing to accept a payment of $600 to settle the debt and strike it from your records. Get this agreement in writing, though, before paying any settlement. Keep all receipts for any settled items from your credit report because it may take weeks or even months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
You can go online for more information about HUD and foreclosures.
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify what price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for a pre-approval, someone else might buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you extra money in the closing process. Ask the lender about any special programs and what would work best before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. The many helpful tips and suggestions that a knowledgeable real estate agent can give you will make your house-hunting easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, and it usually works to the disadvantage of the buyer.
Selecting a real estate agent requires a little more effort than picking a number out of the phone book. You should check with your friends and neighbors for any recommendations they may have. Find an agent you feel comfortable with who is knowledgeable about the area you hope to buy in.
Now You're Ready To Roll
These are just the basics of home buying. You will find many details you need to master as you move forward through the buying process, but having the basics under your belt will give you a head start.
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