Category Buyer Tips

Buying a home in today’s market can be challenging due to high demand and limited inventory, but it’s still possible with the right strategy. Here are some steps you can take:

1. Determine your budget: The first step in buying a home is to determine your budget. Consider your income, expenses, and how much you can afford to pay for a home each month. It’s also a good idea to get pre-approved for a mortgage to know exactly how much you can borrow.
2. Find a real estate agent: A good real estate agent can help you navigate the current market, find available properties, and negotiate the best price for you. Look for an agent who has experience in the area you’re interested in and has a good track record of helping buyers.
3. Research the market: Do your research to understand the current housing market in your area. Look at recent sales and pricing trends, and compare properties to get a sense of what you can expect to pay for a home in your desired area.
4. Be prepared to act quickly: In a competitive market, homes can sell quickly. Be prepared to act fast when you find a home you like. Make sure you have all the necessary documentation and funds ready to go.
5. Be flexible: In today’s market, you may have to compromise on some of your must-haves in a home. Be flexible and open to different neighborhoods, home styles, and features to increase your chances of finding a home.
6. Make a strong offer: If you find a home you love, be prepared to make a strong offer. Consider offering more than the asking price or including a personal letter to the seller to help your offer stand out.
7. Get a home inspection: Once you’ve found a home you’re interested in, make sure to get a thorough home inspection to identify any potential issues that could affect the value of the property.

Buying a home in today’s market can be challenging, but with the right strategy and a little bit of luck, you can find the perfect home for you.

In the current market, it’s common to make multiple offers as a homebuyer before yours is accepted. Simply taking the time to put forth a well-written offer can work wonders for a buyer. Despite what you may think, it’s not all about the dollar amount. Each seller and agent may have different opinions on what makes the best offer, but here are some that are the most consistent:

1. Always include a preapproval letter

If you want to show the seller that you’re serious about buying a home,  get pre-approved before you ever sign an offer.   Not only does it show that you didn’t just waltz up, see the for sale sign and throw something out there, but it also alleviates some of the seller’s worries that you’ll back out when the bank finds out your credit isn’t actually as good as you thought it was.  Be sure to include that pre-approval letter from the bank with the signed offer.

2. Offer More Earnest Money

Earnest money shows the seller that you’re putting your money where your mouth is, and you’re prepared to give up that chunk of cash if you back of the contract for any reason other than those allowed under the contract terms. Increase your earnest money in the offer to show them you’re serious.

3. Don’t Add Any Contingencies

Need to sell your home before purchasing another home? Perhaps it isn’t the best time to start searching for a home. Anytime you can waive contingencies in the contract, like the sale of your current home, it gives the seller more confidence that the deal will go through without a hitch.  In the current market, very few sellers are willing to tie their home sell to yours. Consider selling first and maybe renting short-term while you search.

4. Make it Your Best!

When you’re up against multiple offers,  don’t waste any time expecting to negotiate.  Base your offer on solid research of surrounding comparables and really offer what you’d be willing to pay.  If you don’t,  your offer may be tossed aside for others that did. This includes more than the price, too.  Maybe pay out of pocket for some of those extras, like a home warranty or closing costs, instead of asking the seller to contribute.

With some time, a few practical tips, and the right real estate agent you can make it from your offer to the closing table in no time. Need an agent to help you sell your home or buy a home? Contact me

Buying a home can be overwhelming, whether you are a first-time home buyer or an experienced one. Here are the steps from thinking about owning a home to the closing table for a financed transaction! I am here to help you along the way, simply contact me!

1. Check Your Credit Score

If you are financing, this is the first step any potential home buyer should make. The higher your credit score, the lower the interest rate on your mortgage. There are lots of free or inexpensive resources for checking your credit score and report for accuracy. Credit Karma offers free credit scores, reports, and insights. Many credit card companies offer a free credit score and/or report, so check your credit cards for benefits you may have overlooked.

Credit Scores: The minimum FICO^® Score required to qualify for a conventional mortgage is typically about 620. You can get an FHA mortgage with a FICO^® Score as low as 500, but applicants with scores ranging from 500 to 579 must make a down payment of at least 10% to qualify. Applicants with credit scores of 580 or greater can qualify with a down payment as low as 3.5%. Issuers of VA loans have some discretion in setting minimum credit score requirements, but they may accept applications from borrowers with FICO^® Scores as low as 620.

2. Start Saving for a Down Payment

Depending on the type of loan for which you qualify, you may need from 3.5% to 20% of the purchase price for a down payment. The get the best mortgage rate, plan to put down around 20% of the purchase price. But you can put down less than 20%. The minimum down payment required for a house varies depending on the type of mortgage.

• FHA Loans can require as little as 3.5% down.
• VA loans, for current and veteran military service members and eligible surviving spouses, usually don’t require a down payment.

Keep in mind, down payment requirements can also vary by lender and the borrower’s credit history.

3. Mortgage Preapproval

You will need a preapproval letter to starting to look at homes with a realtor. A preapproval letter shows sellers and real estate agents that you’re a serious buyer and shows the amount of your buying power, as well as the type of loan for which you qualify. Having this letter on the front end helps the process by preventing you from falling in love with homes that are out of your price range or loan requirements. Need a lender? I have a list of mortgage loan officers who some of my clients have worked with that I am happy to share!

4. Start Looking at Homes

The fun part of home buying now begins! I will set up an MLS search for you that matches everything you are looking for in a home: 4 bedrooms, 3 bathrooms, a 2 car garage with a fenced-in yard in a particular school district. We can select almost anything as a part of your search! I will begin sending you email notifications when homes are listed for sale and we will schedule showings as properties you would like to see come up.

5. Make an Offer on a Home (Buyer Cost: $500-$5,000)

Next, we will work together to make an offer once we find a home you want to purchase. We can write up and sign the contract in person or electronically. I will then submit the offer to the seller’s agent. The sellers can accept, counteroffer, or reject your offer. When the contract is agreed upon, the realtor will finalize the contract. Earnest money is a deposit you put down with your offer on a house to show good faith. The earnest money will be credited towards the sale. 1% of the purchase price is the standard amount of earnest money to submit with your offer.

6. Submit Your Mortgage Application to Your Lender

Your lender will guide you through this process, but you should be prepared to provide some financial paperwork. Some items you will need to have ready will be: W-2 forms and federal tax returns from the past two years, Pay stubs from the past 30 days, Proof of other sources of income, Recent bank statements, Details on long-term debts, and your ID and Social Security number.

7. Have a Home Inspection (Buyer Cost: $350-$600)

A home inspector checks out the house from top to bottom to determine if there are any problems with it that might make you think twice about moving forward. The buyer pays for the home inspection in Alabama, as we are a “buyer beware” state. Expect the pay around $350-$500 for a home inspection, out-of-pocket. Next, we will receive the inspection report. At this point, we can choose to request any needed repairs be done by the seller, negotiate the price further due to inspection findings, or choose to accept the home in its current condition.

8. Your Lender Will Order an Appraisal (Buyer Cost: Around $650)

Another important part of home buying is the appraisal. The appraiser checks out the house to make sure it’s a good investment. He/she will investigate the condition, the square footage, location, and any additions or renovations to determine the home’s specific value. If you are buying with cash, having an appraisal is totally up to you. Expect to pay around $650 for an appraisal. Sometimes this cost is rolled in with closing expenses and sometimes the lender requires it to be paid out-of-pocket. Discuss this with your lender.

9. Additional Inspections (Buyer Cost: Varies)

Other inspections to consider are a property survey, septic or sewer inspection, and a termite inspection. Some lenders may require additional inspections. Each of these types of inspection will carry its own cost. Surveys and termite inspections are usually rolled in with closing, while sewer or septic inspections are usually paid out-of-pocket by the buyer. It is your duty as the buyer to conduct any and all inspections that you wish.

10. Final Walk-Through

Around a week before closing, we will schedule a final showing of the property. The goals: to ensure the property’s condition hasn’t changed since your last visit, that any agreed-upon repairs have been made and that the terms of your contract will be met. At this point, you should have received a preliminary settlement statement from the closing attorney to review the preliminary numbers.

11. Closing Day

Perhaps the most anxiety-causing part of the home buying process is the closing day! But, really, it’s a group of people sitting around a conference table signing paperwork. Make sure to bring your valid I.D., funds needed to close, and anything else your agent or lender has instructed you to bring. Closing is the day you officially get the keys to your new home and pay all the various parties involved. That will include your down payment for your loan, plus closing costs, and the extra fees you pay to process your loan. Congratulations!