Spring Home Buying Tips
Spring can be the busiest season for buying and selling homes. The rising temperatures and Spring flowers make it a pleasant time for house hunting. It's good timing for families who want to move at the end of the school year. There are good articles about "Selling" your home in the Spring. Here are some tips for home buying in the Spring Real Estate market.
1 - No Surprise here - Hire a Good Realtor. I know. Everyone is tired of blogs that talk about how you need to hire a Realtor. How they'll hold your hand through the process and they'll save you money. No need to repeat all of that. Fact is, you can search homes for sale online. Some of the ones you see may still be available. Some sites will let you see homes after they went into contract or after they sold. Those sites can be a waste of time. And, not all Realtors are created equal. There are still reasons why you should hire a Pro to represent you.
Top Realtors will have a website where you can search homes without wasting time on the ones that are no longer available. Better yet, they'll listen to exactly what you want in your home. They'll save a search for you to receive homes in the area, price range and with the criteria that you want.
If you're re-locating to another State, you really need a local expert. It looks so easy to check out neighborhood info online. You think you know what a place is like. Unfortunately, the online info isn't quite as good as having someone who knows the area. We saw that a few years ago when we listed a home for clients who bought their home sight unseen without their own Realtor. Yes, the on-site sales staff sent good, accurate photos of the home's interior and yard. What they didn't include was a look at how long it took to reach the nearest grocery store or the nearest dry cleaner. Important issues for our sellers who didn't like to get on a freeway or drive more than a few miles.
DIY has become a buzz word. It can work great for things like planting flowers. For more important issues, maybe not so great. When you go to a new home builder or to an open house, you are going in without representation. The person who is representing the seller has already signed an agreement with the seller. They've agreed to try and get them the best price. How can they get the seller the best price while helping you get the best price?
2 - Find out how much home you can afford. This goes hand in hand with hiring a Realtor. You may have already looked at one of the online mortgage calculators. Many of those will ask for your name, email and phone number so mortgage brokers who buy your lead can call. Better to consult with your Realtor. They will refer you to lenders who have a proven track record.
Many home buyer's hearts have been broken when they relied on one of those quick pre-qual letters. The pre-qual said they could afford X. They went out looking at homes, even showed their favorites to the kids. After making the offer, the lender asked for more info and they could not qualify. Big disappointment for everyone. If you're going to discover that you don't qualify, better to find out before you spend money on an inspection and an appraisal.
If you're buying a home, get your Mortgage Pre-approval before you start shopping. The lender will have a complete look at your tax returns, pay stubs, etc. They will still need the contract, property info and the appraisal to approve the loan. Having a full pre-approval will give you an advantage if you find yourself competing with other buyers.
3 - Set Your Goals. Once you have a pre-approval letter from your lender, you will know how much home you can qualify for. The lender who provides the pre-approval letter will consider your debt to income ratio. They won't know the things that are most important in your daily life. Do you want the freedom to travel a few weeks each year? To try nice restaurants? Or to pursue your dream of starting a family?
The mortgage pre-approval is how much you qualify for. You have to decide how much home you can afford. You'll need to look at monthly expenses. You don't want the new mortgage to leave you house poor so you can't enjoy life. Decide how much you're willing to allocate to your monthly mortgage payment. Don't forget other expenses of home ownership. Then look for homes that fall in this price range.
4 - Ready, Set, Win - If you're buying your home this Spring you should be ready to make your move when you see what you want. The National Association of Realtors has reported that inventory is low. Interest rates are still low and un-employment has improved. These are all good signs for home sellers.
The fly in the ointment for buyers is a lack of inventory. This is one of the reasons it is so important to have your pre-approval before you start looking. The nicest homes in the most desirable areas do not last. Don't hesitate to make an offer when you find your dream home.
Work with your agent to make your offer reasonable. Lowball offers can jeopardize your chances of getting your dream home when inventory is low. Offering the right price is only part of the equation. Try to make your offer as "clean" as possible. In a competitive market, asking for "seller concessions" can be a mistake. It can also cause issues with the appraisal.
Contingencies are another issue that can hamper getting your offer accepted. Sellers will expect routine contingencies. The inspection, a final walk through and financing are contingencies in most contracts. Offers that include the sale of another home may be rejected.
5 - From Contract to Close - Once you've gone into contract on your new home, it's important that things happen in a timely manner. This is where working with an experienced agent is a huge benefit. They'll make sure you get all inspections completed during the due diligence time. You'll need to stay in contact with your Realtor and your Lender during the escrow. Once the inspections are completed and the mortgage receives final approval, it will be time to get escrow closed. You'll do the final walk through, sign the loan documents and wire any additional funds.
One of the big concerns during the time you're in escrow is that you don't jeapardize your financing. Buyers who have a full pre-approval before making the offer have an advantage for getting through the escrow. It's important that you don't take any actions that will jeopardize the pre-approval. Wait to change jobs, buy the new car or use the credit cards for major purchases until you have the keys to your new home.
Time to Celebrate - Once escrow has closed, it's time to get settled in your new home. If you're buying a home this Spring, you've picked a great time with low interest rates and prices that are still good in most areas. Congratulations!