House-hunting is often a lengthy process, and it always has a major decision at the end of it. With such a large amount of money and emotion tied up in buying a home, it’s vital to get it right. Here are ten practical tips to help increase your chances of success.
1) Use Apps to Make the Initial Searching Easier
Finding the perfect house used to mean driving aimlessly through desirable neighborhoods and poring through thick books at the real estate agent’s office. A lot has changed since then, and modern house hunters have many more resources at their disposal.
The right apps can make every aspect of house hunting – from finding the perfect property to making sure you can afford it – a lot easier. If you are in the market for a new place to live, you need these apps on your phone.
The Realtor.com app is king of the hill in a number of ways. For starters, it includes more than 3 million listings, far more than any competitor. The Realtor.com app also allows house hunters to highlight the places they want to live, identify open houses and mark the properties they would like to look at more closely.
One of the cool things about Zillow is that it allows you to see estimated market prices of homes in the area that are not currently for sale. If you already own your home, the Zillow app can give you a good idea of what it is worth. That can make determining a target price for your new home much easier. In addition, there does seem to be some listings that are not available in the Realtor.com app so it’s good to check your area for any differences between the 2. Some locales have very fragmented mls boards that do cause both apps to be needed for a home buyer to do a thorough search of their area. If you’re seeing largely duplicate listings then stick with the one you’re enjoying best.
A good mortgage calculator with an easy to read amortization schedule is a must for home buyers, and this mobile-optimized website with an available Android app is one of the best. The website/app allows users to enter a number of different inputs including home value, down payment (in percentage or dollar amount), interest rate, loan term, tax, insurance & pmi with pmi being automatically calculated by default (although, still editable). The flexibility and speed of the app makes it easy to use.
If you are thinking about moving to a new neighborhood, you will want to learn as much about its history and culture as possible. The Wikihood apps lets you do just that, giving you a single place to do your research and find out about your target search areas. Get to know each locale earlier in the process to allow for more honed in searches.
If you have kids, this free app is a must. Safe Neighborhood connects you to the national sex offender registry and lets you search for former criminals living in the target neighborhood.
If you love the home you just saw but hate the lime green walls, you can use this app to picture it in a better light. The Color Smart app lets you take pictures of the various rooms and see how the spaces would look in different shades. This app is a must for home shoppers, but it can also be useful for remodeling your own home.
2) Hire a Buyer’s Agent
After browsing apps, getting an idea of the area you’re looking for, and teeing up some properties to look at or maybe having already looked at, now is the time to get serious.
It’s easy to browse online real estate listings to find your own potential purchases, but to get a great deal you should hire a buyer’s agent to scour the market and look after your interests.
A good agent’s experience and expertise will often turn up issues you’d likely never notice in a home. They’ll also help you through the whole process of finding properties, arranging viewings, making an offer, and finally buying a home.
And don’t forget that the seller will have an agent of their own. If you don’t have a professional fighting your corner, you’re likely to come off second best in any negotiation.
3) Set a Realistic Budget - and Tell Your Agent
Before starting your search, set out a realistic budget for a price range you can afford. Tell your agent what you’d ideally like to spend, but give them an upper limit to work from too, even if you’d rather pay much less.
A good agent may find wonderful properties at the high end of your range, and can then work with you to drive a harder bargain. Your estate agent is on your side, but they need the full facts to do their job.
4) Don’t Overlook Closing Costs
When setting your budget, don’t forget that closing costs can add between 2-7 percent of the sale price to the final cost. You need to account for these extra expenses, even if they’re folded into your mortgage rather than paid upfront.
5) Take Your Time over Finance
Today’s mortgage market is highly competitive, and it pays to shop around for a good deal rather than accepting your first finance offer just to get things moving.
Whenever you want to refinance, the lender will evaluate five factors: your credit score, income, assets, the loan amount and the home value.
Make sure you get a pre-approval in writing before taking your house-hunting journey too far. This not only reduces the chances of a disappointing finance refusal on an ideal home, but it puts you in a stronger negotiating position when you can offer a speedy purchase.
In addition, think about if a 20 year or 15 year mortgage would make sense for you. Using this handy amortization calculator you can view the difference in interest that is paid over the life of the loan. Make sure to note the payoff date as well as the amount of payment. This can help you make the most informed decision by knowing what all your options are.
6) Avoid Unrealistic Standards
Although every house-hunter wants to find their dream home, it’s best to have realistic expectations or you’ll be searching the market fruitlessly for years. Draw up a list of absolute must-haves and deal breakers, and accept that most points in between those extremes will need to be dealt with as part of your decision.
Don’t let the perfect be the enemy of the good if you want a successful home-buying experience.
7) Use Common Sense
You shouldn’t pass up a good opportunity, but at the same time, don’t overlook any genuine problems in your rush to finalize a deal. Make sure you recognize any drawbacks in a home you’re interested in, and make concrete plans for fixing or accepting them.
Letting enthusiasm overcome common sense is a recipe for future unhappiness and frustration. And if it’s a fixer upper factor that into your decision appropriately. If it’s a partial fixer upper, be honest with yourself!
8) Check the Neighborhood
No matter how attractive a home is, it’s important to check out the neighborhood thoroughly before making your final decision. Are there any building developments in the pipeline that could impact local desirability? How does the area seem at weekends or night times, as well as during your quiet afternoon viewing?
It’s a good idea to assess the quality of the local schools as well, even if you don’t have school-age children. High achievement statistics and waiting lists are usually an indicator of a good neighborhood, even if they’re not a foolproof measure.
9) Make Sensible Offers
When you’ve found a home you’re interested in, be sensible with the opening offer you make. Although you’ll naturally want to pay the smallest amount possible, if you start off unrealistically low you could offend and alienate the seller.
They may come back with an instant rejection, and even if they wish to continue negotiations, the atmosphere will have been soured and trust damaged.
Your buyer’s agent will help you decide on the right offer level, which will get you a good deal without appearing insulting.
10) Avoid Credit Changes
Once you’ve had an offer accepted and the purchase wheels are turning, don’t do anything at this late stage to impact your credit rating. A mortgage pre-approval can easily be withdrawn if your circumstances change, and this risks scuppering the entire purchasing process.
Avoid changing jobs or taking out new credit facilities. Don’t spend a lot of money on existing credit cards, pushing your utilization rates toward the limits. Don’t try and tidy up your financial affairs by closing old accounts. Keep everything stable until closing has completed and you’re in the clear.
If you’re a lucky house hunter, you’ll immediately find a wonderful home at a great price, and the purchase will be plain sailing. Realistically, buying a home will be a longer and more stressful process. But following these ten tips will smooth your path to a new life in a new home.