When it comes to buying Real Estate, proper preparation is one of the keys to success.
- Don’t want to find yourself in a neighborhood you dislike?
- Don’t want to be making mortgage payments on a house in which you are uncomfortable with?
- Don’t want to waste your time falling in love with houses you can’t afford?
What you can buy will depend on:
- How much cash you have for a down payment and closing costs
- How much money a mortgage lender is willing to provide as a loan
- How much you can comfortably handle in monthly payments
- It would be a very wise idea before you start looking for a house to consult with you financial advisor to check how much you can afford.
Most buyers know where they want to live, they mainly focus on a home that is:
- Close to work, friends, and family
- Close to a community recreation centre
- Good school districts (even if there are no children, good schools mean high resale values.)
- Low to zero crime rates
- Rising property values
Get pre-approved for a mortgage loan at the start of your search for a home. Most first time home buyers want to look at homes… they often shop for a mortgage loan only after they have fallen in love with a particular house. Don’t make that mistake!
Pre-Qualified – An unofficial estimate of the home you can afford (a “pre-qualified buyer” is one who should be able to get a mortgage big enough to purchase the home he or she wants to buy).
Start with the basics!
Consider the purchase price:
- The value of an inexpensive home is pulled up by more expensive homes around it. In a neighborhood of $200,000 homes, a $150,000 home is a bargain even if it needs $25,000 in improvements. In other words, buy the cheapest house on the block.
- Property of higher value is pulled down by lower priced property. A $200,000 house will be hard to re-sell on a block where the other homes are selling for $175,000. Never buy the most expensive house on the block.
Buy a home that can be sold at a profit!
- Find knowledgeable and honest real estate agent who is familiar with your target neighborhoods
- Work with your agent to find the perfect house.
Ok you found the house that you like, now:
- Evaluate the Seller’s asking price.
- Ask your agent to prepare a Comparable Market Analysis (CMA) to review neighborhood selling prices.
- Consider other negotiating points.
- Decide how much to offer and on what terms.
These are the basics steps in purchasing your new home.