With the shifting market we will begin to see more home buyers enter the marketplace. In fact, with millions of Millennials reaching the average home buying age in the next few years we'll see lots of home buyers entering the market. I thought it would be a good time to share a few tips to help put you a step ahead of the game.
First things first, you'll want to get your loan pre approved before you start looking at homes. There are two primary reasons for this. The first and foremost is so you go into the process with eyes wide open on all the different loan programs, options, costs, and cash needed to close. The second reason is sellers will not consider offers without a pre approval letter showing the buyer can financially qualify for their home. Since in many cases home buyers will qualify for more than they want to spend we always tell our buyers to have the lender work figures backwards. Determine ahead of time what type of monthly payment you know you don't want to go above and have the lender figure what price you need to stay under in order to stay where you're comfortable. No one wants to be house poor, that's not the idea of the American Dream!
Of course if you're paying cash then you'll want to have proof of funds to close to accompany your offer. This is simply a copy of your bank statement or source of funds revealing the amount needed to buy the home. The account number can be blacked out for privacy however it must reflect the buyers name and the amount needed to close.
With interest rates fluctuating on a daily basis you'll want to be sure to do your due diligence and remain in constant communication with your lender. In other words if you get approved today and then aren't able to find a home for a few weeks rates very possibly could go up in that time span. In fact some buyers have been knocked out all together of being able to be approved based on rate increases. You definitely want to know what the current rate is at the time you make an offer to verify that you still qualify and that the payment is still something you're comfortable with.
Once you're approved or have proof of funds to close it's now home shopping time! With the housing market being as unprecedented as it has been it's even more important now than ever before to consider having your own agent to help you. The services for a buyers agent in many places is completely free to home buyers. In Roanoke, Virginia and surrounding locations it is still customary that the seller of the home you buy pays the commission to your buyer's agent. They are essentially paying the buyer agent to bring the buyer to their home and they're paying the listing agent for advertising, marketing, and representing them. If the service to you is free then it doesn't make a lot of sense not to take advantage of it. So go ahead and find a top agent in the area you're looking to buy a home and see if they offer buyer representation.
A buyer's agent will get you access to all homes that are available and be able to show you any home on the market. They'll help you structure, write, negotiate, and close the transaction. Once you enter into a relationship with the buyer agent you choose you'll want to be loyal to them and allow them to help you with everything. For instance, if you stumble upon an open house and decide to meander in, be sure to tell the agent holding the open house who your agent is. If you see a home online rather than clicking or calling the agent tagged to the house, call your agent. They can get you all the information and show you any home that's on the market.
And I must mention the For Sale By Owners out here. With all due respect to them as a home buyer you'll want to make certain you call your agent about any homes that are For Sale By Owner. Many owners are open to working with buyer agents and even compensating them for bringing a buyer to their home. It pays to at least have your agent check into it for you.
Be sure you don't change anything about your financial situation once you're approved until you finally close on the home. This means don't charge anything on credit cards, buy new cars, finance furniture, appliances, or change jobs. Even after you are under contract to purchase a home be sure not to change any of this until after closing as it can impact your ability to close. Lenders will double check employment and re pull credit just before closing to verify these things.
Finally, just like your doctor instructs you, don't google. This can be confusing, overwhelming, and even inaccurate information as the process, protocols, and laws differ vastly from state to state and you'll want to make sure you have accurate information. This is the one of your largest single investments and the best avenue is to let a full time experienced professional Realtor help you through the process. Then you can easily head into happy house hunting!