The basics of home buying
Buying a home can be one of the biggest and most important investments you can make. The process of buying the home that you want can be a long and tedious process, taking up most of your time. It’s up to you, as the consumer, to ask any questions, pay attention to details and to learn about the real estate market in the area in which you intend to buy.
You must know what your wants and needs are before embarking on the long journey of house hunting.
Taking a piece of paper, sit down and write down all the features that are most important to you:
- Are you looking for a house in a specific city, neighborhood or school district?
- How many bedrooms and bathrooms do you want or need?
- Do you want off street parking, or a one or two car garage?
- If you operate a home based business, are there any restrictions in the area you intend to buy in?
- Do you want a finished basement or attic space?
- Do you want a ranch style home or two story house?
- Do you want a central air unit?
- Do your want a furnace or a boiler for heat?
Now, on a separate piece of paper, write down all the features that you absolutely do not want in a house:
- Living in a congested part of town.
- Living next to an airport, train station or highway.
- A home that is in great need of repair.
- A home with too many stairs.
Keep this list in mind as you look at houses. This list may also change from time to time as you look at houses. You may choose to add or remove certain features you do not want or are willing to make compromises on. Don’t be disappointed if you can not find the “perfect” home. Most homes do not come “perfect,” they can only be made that way through time and patience.
Before you begin looking at properties, you will need to get your finances in order. This will be a good time to review your credit report and possibly clean it up a bit to improve your credit score. It’s important to check your credit report to make sure there are no discrepancies. Any past due amounts should be paid in full or most companies will be willing to negotiate a settlement price to close the debt.
For example: If you have a past due credit card debt you no longer use and that has been entered into collections at an amount of $900. You may be able to offer the company a settlement of $500 to settle that debt and have the debt stricken from your records. Before paying this settlement, have this agreement in writing. Be sure to keep all of the receipts to the items you settle on your credit report because it may take weeks or even months for the settled debt to be removed from your credit report.
Now decide what kind of property you are interested in buying. Are you interested in a HUD, foreclosure, real estate or for sale by owner property? There are many web sites on line where you can find homes by city, state, or price range. On these sites, you can see the picture of the home, many with virtual tours, and review the listing features and details.
Now is the time to find a lender and get pre-approved for the loan. This will give you a better understanding of what price range you can look into. Being pre-approved also serves a great advantage for when you find the home that you want, so that you can move ahead and place an offer on the house without having to wait on a pre-approval while someone else steps in and takes the house right from under you.
Lenders may offer special programs on loans, such as the FHA or Ameri-Dream, that can save you extra money in the closing process. Before deciding on a loan, ask the lender about any of these special programs and what would work to your advantage.
Most first time home buyers prefer to work closely with a reputable real estate agent, regardless of the type of property you wish to buy. Real estate agents are very knowledgeable and can give you many helpful tips and information that can benefit you. They are also great negotiators and will help explain the complicated paperwork involved when placing an offer on the house or when closing a deal. Be certain that your real estate agent is working for you as the buyer and not for the seller of the house you would like to purchase. This can lead to a conflict of interests and cause many problems.
Choosing a real estate agent to work with should take more than picking a number out of the phone book. Talk to your friends and neighbors and ask them for any recommendations. You should only work with an agent you feel comfortable with.