This is the first part of an 10 part series of posts that I will be making over the next week or so. Years ago I created FAQ sections on my web site www.themilfordteam.com for both buyers and sellers, By reading through this series of questions and answers that pertain to buyers one actually walks through the entire real estate process from start to finish at an overview level from the perspective of the buyer.
Q - What should I do before I even start looking?
A - Probably the most important things to do are the following:
Get a good Realtor! The hunt for a new home can be a huge time waster if you don’t have the insight, knowledge and skills of a good Realtor working for you. Yes, there is a lot of information available on-line these days – essentially the same information that used to be available only through a Realtor. However, just amassing a ton of data or listings is next to useless, unless you have help interpreting it and applying the filter of understanding the market and the local area to that mound of MLS sheets. There are many good articles that have been written about the importance of having a Realtor to help as your Buyers’ Agent. Click here to read one of them.
Get a realistic idea of what you can afford. Do this by either sitting with your financial advisor (if you have one) or sitting with a representative of a reputable mortgage lender. I do not advise that you use an on-line mortgage company for your first home buying experience, mainly because you don’t have an opportunity to sit and meet with the representative. I know that they will feel that a phone call can accomplish the same thing, but my experience has been that face-to-face time with your rep is important.
I generally also recommend that you stick with direct mortgage lenders, rather than mortgage brokers, if this is your first home buy. Direct mortgage lenders and reputable mortgage brokers have their own sources of money and while some may tend to be a bit conservative in their lending practices, that conservatism will help keep you out of trouble, too. Mortgage brokers will shop you around to various money sources, which can get you a better rate sometimes, but can also hold things up.
You may also want to better understand down payment assistance programs, especially if you are a first time buyer. Ask your mortgage person to explain programs like MISHDA that are available in MIchigan and programs under the VA and USDA, which may provide 100% financing.
Establish a search area where you feel you would like to live and which has a reasonable drive time to your work place(s). I recommend that you try the drive out in the morning and again at night at least once to see what kinds of traffic patterns you might have to deal with and to get a feel for your potential drive time. Here’s a good article to read from the Frontdoor.com that may help you with establishing the criteria for a neighborhood. Don’t completely shut out that neighborhood that is just outside of your preferred area, especially if your Realtor feels that it offers everything that you are seeking.
Create a realistic set of criteria for your real estate agent to use in the search. If you are in the $100-200K range for your first home, it is not realistic to expect to find a big house with lots of land and features like walk-in closets and a Jacuzzi tub in the master suite bathroom. As Dr. Phil might say - Get Real! Here’s a link to a good Home Buyer’s Checklist from HUD that might help you.
It’s OK to specify things like number of bedrooms and baths preferred, basement or no basement, garage (1-2 car), style (ranch, colonial, Cape Cod) and, of course, the price range. In general, older and smaller homes (normally ranches and tri-/quad-levels) will fit the criteria in the $100 - 200K price range. Your real estate agent can help with that too. You may also want to understand some of the different types of properties, other than the traditional subdivision homes, that you could look at, such as Condos, Dethatched Condos, Site-Condos and Co-ops. Here’s a page on my Milford Team site to explain some of those.
Set aside some time to do drive-bys and to look at homes. While there is a lot of spur-of-the-moment in real estate, your searching will go better if you discipline yourself to set some specific times aside for driving by prospective homes and for going on visits with your Realtor. Your Relator will usually need enough advanced notice to be able to set up the appointments, and that can vary, but try to give him/her a days advance d notice.
Doing drive-bys, maybe after work, can help eliminate a lot of places that sound and look great in the MLS listing; but turn out to be places where you wouldn’t want to live. You can tell a lot from the curb and if it doesn’t appeal to you from there, there is usually little reason to believe that it’s going to turn out much better when you get inside.
If you are a couple, try to get on the same page about what you want in a house. Your Realtor will be able to figure out any differences fairly quickly, but it can waste time if he/she is recommending or showing you houses that only one of the two of you will like.
Once you’ve got yourself all organized and have a working relationship going with your Realtor, you are ready to start looking.
