By Brian Lackey from Better Homes and Gardens First Realty Group
Know Your Loan Options
It’s commonly thought that a minimum of 20% down is preferred, but many lenders permit much less. There are loan programs that allow zero down, 3%, 3.5% or 5% down. Your down payment requirement will be determined through the pre-approval process.
This is a must when getting started. A preapproval letter will provide the necessary information as to what type of loan you are preapproved for, how much a lender would be willing to lend, how much of a down payment would be required, etc. In addition, loans have certain qualifying criteria for homes, meaning not every home will work for FHA or USDA loans, etc.
It is the same thing as “flying blind” when you are shopping for a home without a preapproval letter. Additionally, in almost all cases, an offer on a home will require proof of preapproval before a seller will accept your offer.
Understand the Market
We are currently in a “Seller’s Market”, meaning there are many more buyers than there are sellers. As such, Sellers have the upper hand. Buyers need to act quickly and make reasonable offers on homes they love. I say, “If you want it, you need to take it!” Otherwise, someone else will take your dream home.
Stick to Your Budget
Your preapproval letter will tell you how much your lender is willing to lend. That does not mean you have to go “up to” that amount. You may do so, but it’s much smarter to stick to a monthly payment you are comfortable with. “House poor” is not fun! Additionally, if you are preapproved for $200,000 (for example), you do not want to be looking at homes priced well above that. The days of “low ball offers” are a thing of the past in today’s Seller’s Market.
Use your Resources
There are many resources available to today’s homebuyers! Here are some of my top recommendations:
Attend open houses and see what you like. Open Houses are generally every Sunday from Noon to 1:30PM and 2PM to 4PM. *Important: Be sure to let the agent holding the open house know that you are working with Brian Lackey.
Real Estate Web Sites
Sites like Zillow.com or Realtor.com are great research tools. They allow you to see what types of properties are on the market and compare listings. Don’t expect to find your dream home on Zillow though! In today’s market, properties are moving fast and many are selling within days of hitting the market. Many times, these sites aren’t updated in real-time, so if you’re using this as your only resource, you will most likely lose out.
Take any available time you have and drive by homes before requesting showings, if you have the opportunity. It’s very common for buyers to arrive and decide they don’t want to go in because they don’t like how it looks outside or because they don’t like the neighborhood. The pictures you see online can only show so much. By driving by beforehand, precious time is not lost in finding the home that’s right for you. Also, Sellers get disappointed (and sometimes frustrated) when they arrange for a showing and the home is not shown.
Use your Realtor
It’s very important to contact one Agent for all showings and to continue to work with that Agent all the way to the closing table. Many homebuyers think they need to find a home they are interested in and then call the Agent on the sign. When you do this, you aren’t taking advantage of everything a Realtor has to offer!
Agents do several things to protect clients. There are also ethical standards/real estate rules that agents must follow. Your Agent is working for your best interests, so it’s best to find someone you are comfortable and stick with the person. To contact, and work with, several agents simultaneously can turn out to be a tricky and sometimes hairy situation.
Once your Agent understands what you’re looking for, they can set up email alerts to let you know as soon as a new property hits the market. They can also share what you’re looking for with their professional network, and can often times find you a property before it even hits the market. With your agent’s knowledge and expertise, you have a professional working for you to help you find your perfect home.
Brian Lackey – REALTOR®
Better Homes and Gardens First Realty Group
900 North E St.
Richmond, IN 47374
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