My Advice About Buying A Home
A lot of people including friends and family ask my advice about buying a home. Buying a home is an iconic American rite of passage. Many families aspire to buy a home and that goal drives their decisions about work, play, vacation and how they spend their money. For all those who want to buy a home I have the following advice. The key word is “sacrifice”
To obtain any financial goal – including buying a home – you have to be willing to make sacrifices in the way you live your life. Many families decide to buy a home because they want to start a family or have an expanding family. Follow these steps to obtain your goals and dreams.
- Assess your starting point. Do an accounting of any financial assets you might have. For a lot of families, this involves just a single checking account. If you have other assets well great. If you don’t have anything then that works too.
- Make a budget. Find out what you need to cut out of your spending pattern in order to save enough for a down payment on a house. Often families need to cut out cable TV, vacations and dining out. It is a sacrifice you may need to make to buy a home. Examine all your expenses and see what you can do to save money.
- DO NOT make any big purchases. DO NOT buy a car. DO NOT buy furniture or make any other big expenditures. All of this affects how much house you can afford.
- Set a goal of saving 10% of each paycheck. I like the idea of setting up an automatic transfer of money from checking to savings. Your bank can make this happen. Time it so the money is transferred just after payday so you will not be tempted to spend it.
- Secondly, find out what your credit report looks like. There are many places to get your credit report from Transunion, Experion and Equifax. There is only one place you can really get them for free. ANNUAL CREDIT REPORT dot COM https://www.annualcreditreport.com/requestReport/landingPage.action
- Look at the credit report and see if everything on the credit report is correct. I have found numerous errors on my credit report over the years. Report errors to Transunion, Equifax, and Experion.
- After you have accomplished the steps above then it is a great idea to talk to a mortgage banker. I recommend talking to a mortgage banker versus a bank as they have more time to give you advice and directions. I work with SUSAN SHARP at SHELTER MORTGAGE. https://www.sheltermortgage.com/SupportStaff.aspx?SupportStaffID=786 She is a great coach for getting ready to buy a home. A mortgage Banker can help you identify how much money you need to save to buy a home and maybe also how much credit card debt you need to pay off. They can also help you any other issues that might prevent you from buying a home. Finally – they can tell you how much house you can afford. You are working towards obtaining a pre-qualification letter from your mortgage banker.
- Once you know how much house you can afford – you can identify neighborhoods where you might want to live. There are endless opportunities for looking at houses online that meet your budget requirements. Zillow and Realtor.com are my favorites.
- Ride around the neighborhood and check it out. Go to any community activities that are taking place in your target neighborhoods. Get out of your car and walk the streets. If you have kids visit the Schools and talk to the principle. Boots on the ground is how you check out a place to live.
- Finally – look and see which real estate agents are working the neighborhoods where you want to buy a home. You will start to notice a couple of agents whose for sale signs pop up regularly. And you will see the same agents beside listings on Realtor.com and Zillow.com. Call them up and interview them. Identify a house in your price range and call that agent up and ask to see it. DO NOT WORRY IF THEY ARE NOT THE LISTING AGENT. You want a BUYERS AGENT who will represent you in a real estate transaction. Listing agents represent the SELLER – even if they show you their listings.
- If you meet the agent and like her – ask to sign a BUYERS AGENCY AGREEMENT so they can keep your financial information and intentions confidential.
- Ask your buyers agent to put you on an automatic drip from the MLS. This way you are notified of any new listings – within your filtered guidelines of price, neighborhood, and bedrooms – within minutes of the listing hitting the market. You will get an email with a link to the listing including photos and detailed information.
- When you find the right home – make an offer. Follow the advice of your Buyers Agent on offer price and conditions of purchase.
- Hire a home inspector during the due diligence phase of the contract. Again – follow the advice of your Buyers Agent
- Close the contract and move in and enjoy your new home. The sacrifice is worth it.