Your level of preparation can mean the difference between closing on the property of your choice or seeing someone else move into the home you'd already started to imagine as your own. Use these tips to make sure your dream house doesn't slip through your fingers.
1. Look over your finances and get pre-approved for a loan
Examining your finances will not only help you determine how much you can afford to spend on a new home, but can also help you on your path to getting a mortgage. You want your report to be as good as possible, so look over it carefully and make sure there are no errors. The better your credit report, the more likely you are to get a good mortgage rate.
2. Get approved for a loan
Once you have looked over your finances, you can speak with a lender about getting pre-approved for a loan. If you can show that you have been pre-approved, sellers will view you as a serious buyer and will be more willing to work with you. Getting pre-approved for a loan will show that you are serious and ready to buy.
3. Work with an Agent
Once you know what you want in a house, you will need help finding it. While some transactions made without a real estate agent are very successful, the fact is that most people just don't have the knowledge, experience or connections to get the best deal. Only 20 percent of home transactions are made from newspaper ads. The other 80 percent are due to networking between agents.
When you find an agent, make sure he or she is familiar with the area you are buying in and keep him or her up-to-date on what you are looking for in a home. Let your agent know about your needs (including number of bedrooms and bathrooms) and your wants (including anything like jetted tubs and fireplaces) and give him or her honest feedback on the homes you visit. Your agent will be able to narrow down your search to homes with your specifications. Eventually, you will come across the home you are ready to buy.
4. Write a Contract
Create a contract with your agent or with an attorney that spells out what you are and are not willing to pay for. The contract should also include the date that you want to close the deal by, as well as when you would like to be able to move into the home. Make sure the details of the contract are contingent on the inspection of the home, so as to avoid any nasty surprises.
5. Get Your Loan Started - Take Advantage of the Home Inspection
When you speak with a lender about getting a loan, he or she will have the house you are interested in inspected. This inspection will not only tell the lender how much he or she should lend you, but will also let you know about any problems with the home. This is where those "nasty surprises" you guarded against in your contract can pop up. Make sure you are protected against paying for any pre-existing problems.
6. Make an Offer and Close the Deal
Congratulations on finding your new home! Now, with the help of your agent, you can make an appropriate offer and close the deal.
