So you want to buy a home. You’ve considered the pros and cons and even saved enough for a down payment. You’re ready to start looking. What’s the best way to go about it? Here are some pointers to get you moving (literally and figuratively):
1. Stick to your budget.
When you happen across a home that you love but is out of your price range, it can be tempting to go outside your budget to buy it. However, you can be almost positive that if you manage to buy that home and find yourself with a high 30-year or 45-year mortgage, you’ll live to regret that decision. The best thing you can do is discover what you can afford and look only in that price range. Be sure to include closing costs, monthly mortgage and maintenance costs in your budget.
2. Make a list of non-negotiables.
The first thing to do before you start shopping around is to consider what you want. What home features would enhance your well-being? What would make your life miserable? Write it all down. Then decide which of those features are non-negotiable and which would simply be nice to have.
It’s important to know what you want, but you probably won’t find your ideal house in your ideal area at your ideal price, unless perhaps you have construction experience and can build it yourself. If you don’t quite know what you want, start by visiting open houses in the area and seeing what you like and don’t like. At this stage, don’t be afraid to look at houses or apartments that are above or below your budget.
3. Hire an experienced real estate agent who knows the market and the area.
Navigating the world of housing can be intimidating—especially when you are working on your own. You need an experienced and trustworthy professional on your side to help you find the best deals. To find the best, ask your friends and family for recommendations. If that doesn’t work out, check out real estate websites like Zillow and Streeteasy and read the reviews.
When you first meet with your realtor, be ready to share your list of non-negotiables and ideal home features. To be the most effective agent, they need to know exactly what you are seeking.
Experienced realtors can also connect you to loan officers and real-estate attorneys and can offer you tips for interacting with buyers.
4. Before you bid, gather the facts.
Don’t let your realtor do everything for you. Before you throw out a random number or the number your agent suggests, you’ll need to do some of the legwork.
For one thing, you’ll need to have an idea of the cost of land in that neighborhood. Are similar houses and apartments selling at similar rates? Is the seller overestimating the worth of their property? If you find any inconsistencies, inform your realtor. If you like the home and want to make an offer that is lower than the selling price, you’ll want to have evidence to justify your claim.
You can also justify lowering your bid if you know that the seller is behind on their property taxes. You can find this out simply by going to the county clerk’s office and asking for tax records.
Finally, talk to your neighbors. Do they have plans to put in a basketball court or a new addition? Believe it or not, that might detract from the value of your land.
Getting the lay of the land will also help you determine whether you really want to live there. Check out the schools in the area, the local grocery stores and the feel of the neighborhood. A good school district can increase the value of your home as much as 20%.
5. Learn the art of negotiation.
When you are ready to make your offer, it’s important to know something about negotiation. Contrary to what many people think, the best negotiators know how to stay pleasant at the same time that they drive a hard bargain. Negotiations training can help you land a great deal.
Your opening bid should be based not only on what you can afford but what you believe the property is worth. You also should think about an oddball number ($295,995 rather than $300,000). Sellers tend to respect that more as it denotes that you have put thought into it.
Happy house hunting!
