Buying a house starts with getting your ducks in a row
Buying a house starts with getting your ducks in a row. If you do, you’ll have a much smoother transaction with much less stress. Where do you start? Not with a Realtor.
Duck Number 1
Buying a house starts with talking to a qualified and reputable lender. There is no sense in riding around looking at houses if you don’t have a really good idea of what you can spend. Start with a lender.
A lender will look at your assets, debts, income and other resources to see what you can actually afford. You want to know that up front. Having that number in your head will keep you from looking at homes you fall in love with, but you can’t buy.
A good rule of thumb is to keep your mortgage payment 40% or less of your monthly income. Some lenders will allow you to go to 50%, but at some point, you end up house poor and no longer loving your beautiful new home. Find that magic number and then decide what you feel comfortable with. Carry that visit with your lender through to the pre-approval process. It is more attractive to a buyer than a pre-qualification.
The pre-approval from a lender means the lender has looked at your bank statements, tax returns and other documents that confirm your income and expenses. A pre-qualification is based on your word about your ability to buy. The hard copies of your statements give the lender the confidence to put a number on your pre-approval that he/she knows you can pay. Go with the pre-approval.
Duck Number 2
Once you’ve found your magic number, stop spending as much money as you can. Don’t use your credit cards any more than you can pay off each month. Keep your debt low and paid consistently and on time. Don’t go out and buy a new car, a house full of furniture or anything else that would create a revolving monthly payment.
Pay your cell phone, your electric bill, your cable bill, your water bill, your car payment, your student loans, your credit cards, and any other debt you now have – on-time every-time from the day you meet the lender until you close on your house.
Duck Number 3
When buying a house, hire a qualified, responsive, interested, engaged and professional real estate agent. I use this long list of adjectives because not everyone meets this bar (and they should). Interview different agents to see if you feel comfortable with the person. Make sure your personalities flow together smoothly.
Find someone who has experience, and make sure they know how to work all phases of the real estate business. Ask questions. Don’t be afraid of offending them.They understand.This will be one of the biggest events in your life, and you want your agent to be an asset to you and not anything else.
Do a social media search for the agent your contemplating. Look at their Facebook page, website, Linked In page, and any other social media site Realtors may frequent. Google their name and see if they show up in the Google listings. See if there are good and bad reviews online. Remember, some bad review may simply be someone trying to derail the agent’s business for their own personal reasons, and some good reviews may just be family. But, if the reviews are consistent across the board, you may have found a match.
Duck Number 4
When buying a house, do your first home showings in the agent’s office. Narrow down your criteria so that you can spend your time fastidiously. Remember, driving around with a great Realtor looking at 100 houses is creating a deficit for the Realtor. The wasted hours spend looking at houses that have not chance of becoming your home are wasted hours and no income for the agent.
Narrow down your search in their office and then head out. I had two clients look at 60 houses a piece. They were back to back clients and it took three months to look at 120 houses. During those three months, I let multiple ready-to-buy clients go because I had appointments with those two clients. They both bought, but it is hard to tell how many other sales I missed while driving around looking at everything that caught their eye. Today, we narrow the showings down to a much lower number in my office before hitting the road.
With the high volume of photos, videos, Google Earth and other resources available on the web, buyers don’t need to run around looking at a high volume of homes. Many websites give such high quality data that a buyer can feel like he’s done a walk-through before seeing the house.
These are just the beginning phases of buying a house. There will be many more things that come into play as you narrow down your search and write a contract, but start at the beginning and you’ll be much happier with the results.
When you’re ready to make that purchase, give your Cornerstone Business Group, Inc., agent a call. We are you local real estate sales pros, and we will help you find that right house at the right price.