4 Questions to Ask Before Buying a Home
Whether you’re a first-time homebuyer or a seasoned real estate investor, buying a home is an exciting process. However, there’s also a lot to consider when you decide to buy. So, before you begin your search for the perfect property, here are four questions you should ask yourself.
What do I want?
Take the time to figure out what type of property you want to buy. From single-family and multi-family homes to condos and co-ops, there are many different options on the market and it’s important to choose the type that best fits your needs. Figuring out the town or neighborhood you want to live in is equally important. While a property might have all of the amenities you’re looking for, factors like crime rate and proximity to highways can impact the overall home-owning experience. A good idea is to list out and prioritize your needs (e.g. large backyard, great school system) before you begin your search.
What can I afford?
The rule of thumb is that you should never spend more than 30% of your monthly income on a mortgage payment. An alternate rule states that you can afford to buy a property that runs about two-and-a-half times your annual salary. For a more tailored look at what you can afford, use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.
Am I financially prepared?
A few months before you start searching for a home, review your credit history and make sure it is in good standing. Get copies of your credit report, ensure that it’s accurate, and fix any issues you discover. It’s likely that you’ll also want to get pre-approved for a home loan, which will put you in a better position to make a serious offer once you find the right property. Pre-approval from a lender is based on your credit history, debt, and income.
How do I make the best bid possible?
We will review recent sales in the same area, and sales of homes with similar features, so you can evaluate if the asking price is appropriate. Negotiating the purchase of a home effectively takes experience, and we have plenty of that with over 150 sales. Your negotiating approach should take current market conditions into consideration. Is inventory low or high? What time of the year is it? How long has the home been on the market? What are the pluses and minuses of the home as compared with your list of desired features? What is the sellers time table? Sometimes making the sale date co-inside with the seller’s plans can make your offer more desirable. What contingencies to you need in your offer? Financing contingency: How much are you putting down? Home Sale Contingency – Do you need the proceeds from the sale of your current home to purchase your new home? We will take the time to review all of these things with you, and give you options, and strategies, so that you can decide how to structure all the terms in your offer.