Is now the right time to buy? Most experts agree that if you find a home that meets your needs at an affordable price, there is no reason to wait, as long as you first complete your “homework.” Here are the most important assignments for every home buyer:
1. Check your credit report and get your finances in order.
Before you apply for a mortgage, get a free copy of your credit report at www.annualcreditreport.com
. You're entitled to a free copy of your report that is compiled each year by the three credit reporting bureaus – Equifax, Experian and Transunion.
By checking your credit report before meeting with a lender, you can fix mistakes or correct bad credit behaviors so potential lenders will look at you more favorably. You can improve your credit score by:
making payments on time
paying off accounts with small balances
paying down accounts with higher balances
avoiding adding new accounts
2. Obtain mortgage pre-approval.
Most sellers won't consider an offer from a buyer who doesn't have a pre-approval letter from a mortgage lender, so it’s best to get pre-approved before beginning your search. Your lender will tell you how much you can afford, what the monthly payment will be, and what your anticipated closing costs will be. Speak with several lenders before choosing one, so you can compare costs and fees.
3. Create a budget for the home.
Once you know how much you can afford, you can decide how much to spend. Remember additional expenses such as repairs, furnishings, real estate taxes and maintenance. A budget will help you be realistic.
4. Learn more about the real estate field by:
researching internet sites;
attending a local home ownership workshop; and
talking with several real estate agents.
5. Hire a licensed Buyer’s agent.
A real estate agent who signs a contract with you as your "Buyer's agent" will search listings for you, make appointments, conduct research, and walk you through the entire process of buying a home. Buyer’s agents also have current real estate listings and sales data to help you avoid overspending.
6. Make a shopping list with your agent.
Searching for a home involves asking yourself a lot of questions. Where do you want to live? How are the schools in that area? How is the commute to your job? How high are the property taxes? How many bedrooms and baths do you need? Your list will help you to stay organized and focused.
7. Hire a licensed home inspector.
Once you've chosen a house and signed a contract with the seller, it's time to bring in an objective professional home inspector to check the condition of the property before you buy, and give you a detailed report highlighting any defects. If expensive defects are found, you may be able to negotiate repairs or a price reduction, or even terminate the buyer’s contract. Having a home inspection will give you the truest picture of the home’s condition and help you to make an informed decision.
8. Before the closing, do a final walk-through.
The walk-through just before the closing gives you one last look at the property you're buying to be sure it's in the condition you want and expect. If there are any problems, it's better to know them before you close rather than after, so you have the opportunity to address these issues with the seller.