Deciding to Buy a Home

Buying a home can be difficult decision to make in today’s market. The fragile state of the economy can have one constantly looking over their shoulder at the boss, wondering if there is another wave of layoffs coming. And, some may question the historical assumption that real estate always goes up. After all, there is a limited amount of land, etc, etc. How hollow those words sound after the last two years of carnage.
Additionally, the property valuation and the mortgage application process can seem overwhelming, particularly with so many friends and relatives having made bad decisions during the bubble frenzy. But home ownership is still a desirable state of being and theses fears can be overcome, one step at a time, so to say, by putting together a very methodical to do list.

Prequalifying for a Mortgage

Today virtually no Realtor in their right mind will invest much time in you if you cannot prove that you have the ability to close a transaction. So, you need to get together with a financial lender, and remember, you aren’t committing to a loan with them yet; you can still shop for the best deal later. Later, after you have worked with a Realtor and found the property of your dreams it can be tempting to go for an adjustable mortgage or some variation, with the lower initial rates in order to comply with the income ratios necessary for the loan to be approved. This is a little bit of a gamble as property values, although we believe they have bottomed, aren’t GUARANTEED to go up over the medium term.

Finding Your Home

Watch for the old up-sell from your Realtor. If you determine the loan amount you are comfortable with, do not let them tempt you by bring you into neighborhoods that are priced out of your means. Remember, as real estate agents, we are paid a commission, the more your house costs, the more we make! However, there are times when a small increase in the cost of the home can get you a LOT more value. You have to press the agent on why they want to show you something outside of the parameters you gave them. After all, your time is valuable too. Don’t let them get sidetracked by showing pie in the sky homes.

Negotiations

The best thing about all the poker tournaments on television is that we can learn what real poker faces look like. Particularly in today’s buyers market, keeping your cards close to your vest can save you a good deal of money. Let the real estate agent earn their commission. You are nonchalant! No gushing over all the house’s special features.

Your Team

You will need an attorney, home inspector, property surveyor, etc. Let your team do their jobs right and you will be able to sleep well at night. Their experience can help to save you money by heading off some repairs that may be necessary later.

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