1. Use a Buyer's Agent
It's important that you choose an experienced agent who is there for you. Your agent
should be actively finding you potential homes, keeping you informed of the entire process, negotiating furiously on your
behalf, and answering all of your questions with competence and speed.
First, find an agent who represents you and
not the seller. This is beneficial during the negotiation process. If you are working with a buyer's agent, he or she is required
not to tell the seller of your top choice. In addition, he or she is also focused on getting you the lowest asking price.
Also, when you use a buyer's agent, you will see more properties. Not only are they plugged into their Multiple Listing
Service, but also they are actively finding homes that are listed as FSBO, or homes that sellers are thinking about listing.
2. Don't Use Your Credit
For Any Major Purchases
Don't go on a spending spree using credit if you are thinking about buying a home, or
in the process of buying a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation.
Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility. For example, a
car payment of $300/month could mean that you qualify for $30,000 less in a mortgage.
Even if you have accumulated
enough savings, you should consider not making any large purchases until after closing. The last thing you want is to know
that you could have purchased a new home had you curbed the urge to spend.
3. Use Only Legitimate Lenders - Get Preapproved
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It used to be that buyers could go house shopping and when they have found their dream
home, then they go to get pre-approved. However, in today's market, that has proven to be one of the least effective methods
in landing the dream home.
Most lenders can pre-qualify you for a mortgage over the phone. Based on general questions
about your income, debt, assets, and credit history, lenders can estimate how much mortgage you qualify for. However, being
pre-qualified and pre-approved are different things. Pre-approval means that you have applied for a mortgage; you have filled
out the mortgage application, received your credit report, and verified your employment, assets, etc. When you are pre-approved,
you know exactly what the maximum loan amount will be.
A pre-qualified letter is not verified and in essence, does
not count for much if you are competing with other buyers who are pre-approved. When you are pre-approved, you and the seller
know exactly how much house you can afford. It gives you credibility as an interested buyer and lets the seller know immediately
that you will qualify for a loan to buy their property.
In addition to being pre-approved, it's important to be pre-approved
with a legitimate lender. Legitimate lenders include: banks, mortgage bankers, credit unions, savings and loan associations,
mortgage brokers, and online lenders.
Some lenders to avoid: those who lose a form or misplace a file, those who gather
information from you in an unorganized manner, those who are not informed about interest rates, points or costs, and those
who cannot provide you with the right information. |
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4. Find Sellers Who Want To Sell
The best seller is one who is highly motivated. A highly motivated seller is more likely to sell for less than his or
her house is worth. And it matters that you find out why; learning the reason why can help you get the price you want and
help the seller get what they want: a timely sale.
When given the opportunity to meet with sellers, ask them why they
are selling. The reasons could be anything from job change to a new location to financial problems. If you can solve their
problem, whether it is cash related or time related, do so. For example, if the sellers are highly motivated because they
need to move quickly, give them a fast sale - and a lower price. If you can make an offer, even a low one, that gives them
cash in a short time, they are more likely to accept.
There are also some sellers that you should avoid. Not every
seller is as genuinely motivated as they make themselves to be. Some possible hints:
*they stall on having the home
appraised or inspected
*is unable to clear up liens against their property
*does not own 100% of their property
*they
push back the move-out date
*does not have a replacement property or back up plan
etc. etc. etc.
It is impossible
to find the perfect seller. But it is possible to find out which sellers are legit, and which ones aren't.
5. Have A Buying Plan
Buying a home will probably rank as one of the biggest personal investments one can
make. Being organized and in control will contribute significantly to getting the best home deal possible with the least amount
of stress. It's important to anticipate the steps required to successfully achieve your housing goal and to build a plan of
action that gets you there.
Before you can build a plan of action, take the time to lay the groundwork for your decision-making
process.
First, ask yourself how much can you afford to pay for a home. If you're not sure on the price range, find
a lender and get preapproved. Preapproval will let you know how much you can afford so that you can look for homes in your
price range. Getting pre-approved helps you to alleviate some of the anxieties that come with home buying. You know exactly
what you qualify for and at what rate, you know how large your monthly mortgage payments will be, and you know how much you
will have for a down payment. Once you are pre-approved, you avoid the frustration of finding homes that you think are perfect,
but are not in your price range.
Second, ask yourself where you want to live and what is the best location for you
and/or your family. Things to consider:
*convenience for all family members
*proximity to work, school
*crime
rate of neighborhood
*local transportation
*types of homes in neighborhood, for example condos, town homes, co-ops,
newly constructed homes etc.
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