7 tips for buying a house:
Helping you find your new home
A home is often the single most valuable asset an individual or family owns.
That fact alone means a thoughtful approach and careful planning are crucial when you enter the real estate market as a home buyer. Your credit score, the type of home loan you seek out, your financial ability to make a payment each and every month and similarly foundational elements deserve some in-depth attention.
When you start considering the amount of time you and your family will spend in your new home, how its location will impact the schools your children attend, the length of daily commutes to work and many other factors, it quickly becomes clear that you need to take a detail-oriented approach to buying a house.
Amerivest Realty is here to help you do exactly that. Keep reading to discover helpful and practical tips for buying a house. Along the way, you’ll learn how our Realtors® can offer valuable support throughout the process.
Get ready to secure a mortgage and buy a new home
There’s plenty of work you can complete before you ever set your eyes on a specific home and submit an offer.
The time you invest will pay off: You’ll be ready to confidently and capably move ahead in the home buying process, regardless of the current state of the housing market. And that could mean the difference between an accepted offer and having to submit another bid.
Tip No. 1: The importance of pre approval as a buyer
In the context of purchasing a new home, pre approval refers to the process a lender completes to determine the maximum amount a client can borrow for a home loan. This is incredibly valuable because:
- Pre Approval establishes a price range in your search for a new home. By taking the maximum amount approved into account, you can focus on homes with an asking price that fit into the loan’s limits.
- The lender will provide a pre-approval letter, which clearly demonstrates your ability to (at least conditionally) secure a mortgage loan. Sellers often ask for a pre-approval letter before they move forward on an offer.
- You can learn about the different options available for a loan, and how they might benefit you, through a detailed discussion with your lender.
- You can uncover potential issues related to your credit and, ideally, address them.
Tip No. 2: Have your down payment ready
The down payment is critical to most home purchases. While certain mortgage options eliminate the need for down payments, such as a USDA or VA loan, they’re not available to everyone or applicable to every real estate transaction.
Ideally, you should have 20% of your new home’s total price saved to use as a down payment. Having this substantial amount of money set aside boosts your chances of approval on a mortgage application, and can help you access more attractive terms and conditions, like a lower interest rate.
Many lenders are willing to work with a home buyer who has saved in the range of 10-15% for their down payment. However, this approach can bring additional costs, like a higher interest rate or the need for mortgage insurance, to the table.
Tip No. 3: What not to do before buying a house
A lender generally wants to see a high level of reliability from an individual or couple applying for a mortgage. Recent life changes that negatively affect your credit score and report as well as your debt-to-income ratio, or that more generally indicate a lack of stability, can lead to a denial of your application.
Avoid the following actions until your application is approved and you officially own your new home:
- Making a major purchase, like a boat or car.
- Canceling or opening new credit cards.
- Paying your bills late or skipping a payment, especially for an existing mortgage.
- Changing your job.
- Depositing large sums into your accounts.
- Doing anything that leads to a hard credit inquiry or could significantly change your credit score.
Finding a great real estate agent
Your real estate agent should be a committed professional with deep knowledge of this industry in general and your local market in particular. How can you find the best real estate agent possible to support your goals and make the process as smooth as it can be?
Tip No. 4: Choose a Realtor® as your agent
One foundational piece of advice: Working with a Realtor® means having a reliable real estate professional who is not only licensed, but held to a high ethical standard through their membership in the National Association of Realtors®.
Tip No. 5: Ask plenty of questions
While all Realtors® have the skills and knowledge needed to capably handle a residential real estate transaction, these professionals can have differing areas of expertise and past work to draw insight and guidance from.
If you have specific needs related to a home — perhaps you’re focused only on the high-end luxury market, for example — ask potential agents about their experiences working with clients who purchased a similar type of house.
You can ask more general questions, too. Has your Realtor® successfully supported buyers in a seller’s market in the past? Do they know any qualified home inspectors? Are they working with fellow Realtors® to bring you new information about a home that aligns with your needs?
With a few questions, you can ensure your Realtor® offers the best combination of skills and experience to support your needs.
Act carefully before closing: Inspections and more
Once you have an offer accepted, you’re close to the finish line. There are still some key needs to address, however, before you can close on the home.
Tip No. 6: Make sure you have a home inspection
A home inspection is crucial for assessing any current problems or potential future concerns within residential real estate. Your mortgage lender will have a home appraised before finalizing the necessary documents, but that activity is not equivalent to a home inspection.
The payment you make to a qualified home inspector is always worthwhile, as they can discover issues that:
- May make the house no longer worthwhile in your eyes, allowing you to avoid purchasing a property with serious issues.
- Point out more minor problems that can easily be addressed in the present, but could otherwise go unnoticed and cause more serious damage as time passes.
- Give you leverage in the negotiation process. You may be able to save money on closing costs or the sale price of the home by raising an issue discovered by a home inspector.
Tip No. 7: Be prepared for closing day
Closing day is a major event — the home you’ve put so much money, time and effort into owning will officially become yours. Here are a few pieces of advice to make closing as successful as possible:
- Make sure you have a government-issued photo ID and your form of payment.
- Budget a generous amount of time when traveling to the meeting as well as for the meeting itself — you might not need it, but it’s far better to avoid any other obligations during this especially important day.
- Communicate with your agent ahead of time to make sure all responsibilities are addressed and you have everything you need before arriving.
Finding your next home with Amerivest Realty
Amerivest Realty is here to support your search for your next home. Our real estate search engine offers many options to narrow down your options to only the most relevant ones, and our Independent Realtor® Associates can provide expert assistance and support.