So it is time to buy a new home. Exciting ! Maybe it is your first home purchase, or possibly a change to a larger ( or smaller ) home. After watching and helping numerous people move, I have come to realize that buying a home can be a very stressful experience.
To lessen the stress, let’s start at the beginning. Don’t even look at homes until you know what price range that you qualify for. Talking to your bank or mortgage broker first to get prequalified does two things. One, it establishes a budget for your potential purchase, and two, it gives you more credibility when you enter the negotiating process.
I have seen buyers who fall in love with the perfect home before getting pre approved, only to have the bank say no, and it can be very discouraging. Just a side note here, when the bank gives you a maximun number, that does not mean you have to spend the whole amount. It is sometimes best to be a bit conservative so that your dollars are not stretched too thin when Murphy’s Law unexpectedly kicks in and you have have to change the hot water tank, or furnace or….
Also, being pre approved / pre qualified makes you a stronger buyer in the seller’s eyes. When a seller knows there is a strong buyer, they may be more willing to flex on the price or some other conditions.
Well, now you know your price range, and it is time to get to work with your realtor. If you do not have a realtor, ask a number of friends and family who they could recommend that will work hard for you.
Interview your realtor and find what their experience level is, areas of expertise, and do they have the time to commit to helping you make the best purchase. Also decide if you are compatable. Occasionally some personalities don’t work well together.
More homework. Make a list of criteria that are important to you, possibly along with your realtor. What price range you would like to stay in, neighborhoods, and what your requirements are in a house are important items to consider. It is an idea to break the list into ‘wants’ and ‘needs’. What do you want ? And what do you really need ?
Keep in mind too, that often there is a bit of give and take in the house you find. For example, you may have to give on the fourth bedroom in order to have the garage, or possibly find a different neighborhood etc.
Make your realtor work for you. They should take your list and find some houses that may fit your needs. You might also check online at the same time and possibly you will find houses to ask your realtor about.
You found the house ! Finally, after vewing a number of houses, you found the one house that fits you. It is perfect! Or at least close to it. Hopefully your realtor has done some homework to see if there are any caveats or liens on the property, or any items of disclosure.
Now to start the negotiations. Again, rely on your realtor, as they will know market values. Buying the house for less than list price is great, but it will depend on how ‘hot’ the market is in the area.
If you write an offer, many times the seller will refuse your offer, but will in turn extend a counter offer to you. You can then accept their offer to you, or counter their offer. Most often you will eventually reach a middle ground where both parties are satisfied.
A word of caution. Sometimes offering an extremely low price will offend the seller. If this happens, it becomes difficult to negotiate and possibly the seller will not be very accomodating.
Sometimes you just cannot agree, either the value is not there for you, or the seller is not willing to meet your conditions. So you move on. There is always another house out there. Possibly even a better one.
Built into your offer, there should be some conditions for your protection. One is that the offer is subject to obtaining financing by a specific date, and also subject to a satisfactory home inspection. There may need to be other conditions and your realtor can help you with this.
When utilizing home inspectors or other professionals, ask your realtor for referrals. A suggestion would be to have minimum 2 referrals in each field.
At the signing of the accepted Offer to Purchase, you will need to provide an Initial ( or good faith ) Deposit. The amount varies, depending on what is acceptable in your region. This deposit should be held in trust and should be refundable if the purchase collapses due to you not being able to remove or waive the conditions on the Offer to Purchase.
Again, your realtor will work with you to keep the process moving and the stress level down. Inspections and conditions removal are coordinated with the realtor. When conditions are removed, it is mostly up to the banks and the lawyers. Making arrangements with these folks is your responsibility.
At last the closing day has arrived ! The house of your dreams is now becoming your home. Enjoy it, take care of it , and this home will pay you back.
Some say knowledge is power, and knowing the process of purchasing a house will help you to lessen the stress during this time.
I hope this article was of value to you. Please return to this blog for more informative articles and tips.