Nine Steps to Reduce the Stress of Home Buying
September 5, 2007
I write for First-time Homebuyer Magazine on a regular basis. Here is my most recent article, available in the September/October edition.
From having your credit put under a microscope by a mortgage lender to spending all your free time looking at houses, buying a home can be a stressful experience. Much of the stress is avoidable with advanced preparation and hiring the right real estate professionals. Here are some things you can do to make your home purchase go more smoothly:
1. Get Your Financial House in Order
Before you go to a lender to apply for a mortgage, get a free copy of your credit report. By getting a copy of your report before meeting with a lender, you will have time to correct mistakes or begin to change your behavior so that your lender will look at you more favorably. You can improve your credit by:
· Making the minimum payments on time
· Paying off any accounts with small balances
· Paying down accounts with higher balancesResisting urge to open new accounts
· Waiting - if you can change your credit habits, it will take some time for your credit report to reflect those changes. Lenders will look for you to have those habits for a period of time. If your credit appears to be in good shape, then you’re ready to talk with a lender.
2. Obtain Mortgage Pre-approval
Most sellers will not accept any offer from you without a pre-approval letter from a lender so don’t waste time looking at homes until you have pre-approval. Your lender will tell you how much home you can afford, what the monthly payment will likely be and what your anticipated closing costs will be. It’s smart to speak with a few lenders before deciding to go with one in particular so you can compare rates and closing costs.
3. Create a Budget
Once your lender has told you how much you can afford, you need decide if you really want to spend that much, anticipating additional expenses like rising real estate taxes, repairs, buying furniture, and general maintenance. Your budget will help you avoid overspending and the stress that comes with it. 4. Do Your HomeworkAccording to a study done by the Consumer Federation of America, only 36% of the general public feel they know “a lot” or “a fair amount” about “real estate agents and brokers and their consumer services.” With 68% of the households in the United States owning homes, the study shows that even people who own homes don’t know enough about buying them.Set yourself apart by doing your homework before you buy. Some places you can learn:
· Internet sites like www.money.cnn.com and www.hud.gov
· Attend a homeownership workshop
· Talk with several different real estate agents before signing a contract
· Read The First-Time Homebuyer magazine
5. Make a Shopping List
Searching for a home involves asking yourself a lot of questions. Where do you want to live? How are the schools? How is the commute to your job? How are the property taxes? What is crime like in the community? How many bedrooms/bathrooms do you need? What special features would you like your house to have? Write down the answers to these questions. Your list will help you stay organized and focused.
6. Time Your Purchase
For most real estate transactions, it takes about thirty days from the time the home is put under contract until you can close. To find the house, you will need at least those thirty days. Time your purchase according to your current living situation - whether you are renting, need to be in a town before the school year starts or to be close to a new job.
7. Hire a Licensed Real Estate Agent
Save time and even money by hiring a buyer’s agent. An agent will search through listings for you, make appointments, do research for you, and will walk you through the entire process of buying a home. Real estate agents also have current real estate market and sales data to help you avoid overspending on a home purchase.
8. Hire a Licensed Home Inspector
A home inspector will check the condition of your property before you actually buy it and issue you a detailed report highlighting defects. If expensive defects are revealed, you may be able to negotiate repairs, a price reduction or even terminate the contract. Having a home inspection will give you the truest picture of your home’s condition and will ultimately give you some peace-of-mind.
9. Do A Final Walk Through
Don’t skip the final walk through. The walk through gives you one last look at the property you are buying to ensure it is in the condition you expect it to be in. If there are any problems with the property, it is better to find out before you close rather than after you’ve moved in so you have the time and opportunity to fix any issues.
Entry Filed under: Buyer's Agent, Buying a House, Connecticut, First time home buyer, Homebuying 101, Mortgage, Real Estate Market. .
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1. Pete | September 5, 2007 at 3:19 pm
it should be noted under your websites section that http://www.realtor.com and the entire MLS are also at the disposal of all interested buyers, access to the MLS system is not restricted to real estate agents only… any tech savvy buyers can do loads of research on the internet without having to pay someone to do it for them. I think this is one of the reasons it is more common to see homes for sale ‘by owner’ over the past few years.
2. kermit johnson | September 6, 2007 at 7:25 pm
Great post. In fact, I am going to print it out and give it to prospective home buyers.
3. Must Read Advice for All &hellip | September 19, 2007 at 6:02 pm
[...] not quite there yet, but have plans to do so in the near future. It pays to be prepared and limit the stress involved. First time buyers, here are the most important things to consider before buying a new [...]
4. Pete | September 20, 2007 at 8:02 pm
MUST READ for prospective home buyers:
http://efinancedirectory.com/articles/Th...
5. Pete | September 20, 2007 at 8:03 pm
sorry, here is the link
http://efinancedirectory.com/articles/This_is_Why_I_Rent%3A_Median_Incomes_Do_Not_Support_Median_Home_Prices.html
might need to cut & paste into yer browser
6. 1st Time Home Buyers | October 8, 2007 at 9:11 pm
thanks for the extra tips