1. Get Pre-Qualified First
Pre-qualification is truly the first step in the homeownership process. Without getting pre-qualified with a reputable mortgage broker or bank, you really have no idea how much any home will cost YOU. Regardless of the purchase (asking) price, each borrower has a different credit score, income profile, and down payment; therefore the price of the home is just the starting point.
Working with a qualified mortgage broker allows you to determine up front “how many homes” you can afford. Then when you begin your search for a home, you understand what the actual cost of the home would be for YOU, based on the monthly payments, down payment you are planning on putting down, etc.
The second important component to getting pre-qualified is having your “letter of pre-qualification” ready when you find the right home and you are ready to make an offer. Your offer on a property must include a letter of pre-qualification in order to be taken seriously. Pre-qualification can take a day or two, depending on what supporting documentation the lender requires. If you are competing against other interested parties, and you do not have this pre-qualification ready, the time it takes to generate this documentation could be the difference between your offer being considered, and another offer being accepted.
A letter of pre-qualification accompanying an offer shows the Sellers of the home, and their listing agent that you have done your homework, you are prepared to buy, and that you can afford the home. This small, but important detail can be the difference between getting your offer accepted and losing out on the home of your dreams.
2. Determine Your Housing Needs – Now and in the Next Few Years
Are you a young couple looking to purchase their first home? Are kids in the immediate future (you will need more bedrooms)? Are you a single professional, who still lives with roommates? Do you live by yourself, but are willing to have roommates? What kind of home do you want to live in? A condo building with amenities? A single family home with a private backyard?
Those are just a few considerations to think about when looking into purchasing a property. There may be only one or two of you now, but if in two years you need more space, do you really want to have to move again?
Do you rent a place by yourself now? Do you realize that by owning a two or three bedroom (in the same area) it may cost you less, and you will build valuable equity moving forward? You can take the master suite and rent out the rest of the rooms to your friends and co-workers. If you find yourself in a committed relationship, your new partner can move in, and you can ask the roommates to move on out. Already owning a property might be a big advantage in the future.
3. Be Open Minded and Reasonable
Preview homes that you can comfortably buy and afford. Be reasonable about what you are able to purchase with your budget. The next property that you purchase will likely NOT be your last. Stop trying to make this purchase the solution to everything you always wanted in a home. Think of it as the first step towards achieving your ultimate home. If you do a good job of purchasing the right home now, the equity (appreciation) that may take place in the future may enable you to buy the “perfect home” in the future.
Yes, that brand new building or remodeled condo is attractive. Though the units are small and you will only get a two bedroom, where an older building or unit you can afford three bedrooms for the same price. Buying something that may need a little updating might be a better option than overpaying for a property someone else fixed up to sell. When you do the work yourself, you get the opportunity to pick the colors and finishes to your taste. Real Estate investors who flip properties are on a budget and a deadline. You will usually pay a premium for their work. This has the advantage of allowing you to move right in; but if you have the time and a little patience, you may be able to save a lot of money if you buy a unit that needs a little updating and do the work yourself (or hire your own contractors).
4.Location, Location, Location
Price is not usually the number one factor in purchasing a home. The cost and what the home looks like often times weigh heavily on the decision; though where the property is located is still the most important factor in Real Estate. The location usually dictates the value and the surrounding neighborhood.
Some of the most important factors that contribute to “good location” include:
- Proximity to major business centers, beaches or desirable landmarks
- School District Ranking and Reputation
- Crime rates overall neighborhood safety, neighborhood reputation
- Land Use and Ease of access to freeways, other areas, etc.
- Views and other neighborhood features and amenities
None of the aforementioned criteria included “price.” That is because the value of real estate can be specifically dictated by those factors. In general, people are willing to pay more to live in safe communities that are located in desirable locations and offer good lifestyle features.
We hope you have found these tips useful. While the suggestions may seem a little obvious, many people do not fully consider the impact of these questions up front in their search for a new home. When you do know what you want from the beginning, and you have taken the important step of getting pre-qualified for a loan, you can save yourself time and energy, as well as find exactly what you are looking for.
5.Have the Right Representation and Be Ready to Act
Being Pre-Qualified, Knowing What You Want, Being Open Minded and Knowing Where You Want to Purchase Your Next Home are all important; but being Ready to Act and Having the Right Representation when you do may be the most critical component of all. The COE Real Estate Team is ready to assist you with finding the right property for you.
Why work with just one agent, when you can work with two?
David Coe and Gloria Commiso have over 20 years professional Real Estate Experience as well as decades of professional marketing and advertising experience. This diverse experience and team approach expands our resources and provides the most dynamic representation available, to assist you with finding the right property, and purchase it at the most favorable price and terms.
When you are ready to discuss your Real Estate needs, please contact Gloria Commiso or David Coe of The COE Real Estate Team of Keller Williams Beach Cities.