For the first time home-buyers, it can be daunting to purchase a house. So many factors come into play when deciding to put down money for your home and you’d be shocked to know how many ways you can mess up during the process.
If you believe that saving up for the deposit or downpayment on the property is the most taxing part of the process, well, think again. If you’re unsure about the basic must-knows about home buying, you’d benefit greatly from these easy to follow tips and tricks.
Here are the 5 Dos and 3 Don’ts of how to prepare to buy a home.
Do begin your research early
Buying a home is a pretty big decision, one of the biggest decisions of your life even. So, it pays to start your research early and solidify the specifics of the home features that you want. Look up the current housing trends and take note of the amenities and home details that you like so you can compile a comprehensive list and go from there.
Do invest in a professional realtor
Hiring a realtor would greatly benefit your home-hunting. They have expert knowledge on the ins and outs of real estate and can give you insider info on the current housing market. Plus, you have to remember that realtors get their commission from the sellers. So, it does drive up the price of the home a bit, but in the long run, having a realtor assist and guide you through the process is invaluable.
Do inspect the property and survey the neighborhood
Before settling on a home, you must check the neighborhood. Is it safe? Is it near essential establishments like school, work, hospitals, shopping centers? If the location suits your needs and lifestyle, you must inspect the home. Your realtor will help set up a home inspection and this step is crucial since it allows you to check for signs of structural damage and whether all amenities listed are accounted for. Also, this allows you to renegotiate the price, in case the home isn’t as it seems on paper.
Do get credit pre-approval
It is a must for a buyer to get pre-approved for credit. You need to submit the necessary financial documents and bank statements so that a lender can lend legitimacy to your financial status and credit score. This gives the seller peace of mind knowing you can pay for the home.
Do check and sign the contract and other paperwork
You have to collaborate with the seller and your realtor to draw up a contract that is amenable to both parties. Go over every detail and make sure that the paperwork is legitimate before closing on the deal and signing the contract. Congrats! You are now a homeowner!
Don’t get too excited, you need to get past certain challenges before closing on your dream home. It is also important to know the things to avoid when buying a home.
Don’t splurge on a big purchase
We understand how tempting it can be to buy a new car to go with your new home. A shiny new car would look good in the driveway, after all. Yet, if you’re getting a mortgage for the home, adding a car payment on top of the home would diminish your chances of being able to buy the house. The same goes for any other major purchases.
Don’t change jobs in the middle of the home-buying process
Banks are dubious when you quit your job, even if you get hired at another company. It makes banks uneasy to issue loans to someone under seemingly unstable circumstances. So, unless necessary, keep your current job post.
Don’t put down a deposit directly to a for sale by owner
No matter how much you trust a seller, it is not that uncommon for the transaction not to push through. The seller might spend your earnest money and it will become a challenge for you to retrieve it back. If the transaction falls through, you might not even get it back since no legal document has been signed yet. Best to employ a neutral third party to hold onto the money, such as an escrow company.