Smart Buyer’s Checklist – Part 3
Smart Buyer’s Checklist – Part 3June 18th, 2016
So you’ve been following our checklist the past couple months and have already seen our tips on financial preparation and getting ready for your loan. Now we come to –
The Fun Part – Shopping for your home!
In a hot, fast-moving market with lots of competition like the one we’re in now, it pays to be a smart buyer. If you’ve been following our other tips, you’ve already got your finances in order, and have your loan pre-approval and budget all set. In case you need to move quickly on an offer, you can even bring that paperwork with you in your house hunt – a mortgage pre approval letter, and proof of funds form from your bank will show a seller you’re serious and allow you to act fast if there are other offers that may be coming in. But let’s finish off our buyer’s checklist now by looking at some other general tips to help you in your house hunting.
Find Your Agent
You’ve already found our site and are reading this blog, so you’re ahead there. But it really can’t be overstated just how important choosing the right agent for you can be. A lot of people are likely to begin their search online, or identifying neighborhoods, type of home, etc. (as we’ll talk about next), but ultimately you need a knowledgeable agent to show you the right properties and help you identify and properly value the available homes, as well as negotiate the best deal. Of course you can buy a house through the listing agent, but finding and utilizing a BUYER’s AGENT is the better way to go. Buyer’s agents are usually compensated by the sellers when the sale closes, but work for you the buyer only and have a fiduciary duty to keep your interests protected. The seller’s agent wants to sell their client’s house for the best price. They will be fair and honest with you as well, according to the REALTOR’s code of ethics, but represent the sellers and their sale. Wouldn’t you rather have someone working just for you!?
Identify Your Target Area(s)
An obvious first step in shopping for a new home is figuring out what city or neighborhood you want to live in. Look for signs of economic vitality: a mixture of young families and older couples, low unemployment and good incomes. Pay special attention to districts with good schools, even if you don’t have school-age children. When it comes time to sell, you’ll find that a strong school system is a major advantage in helping your home retain or gain value. Talk to your agent to get an idea about the real estate market in the area. For example, if homes are selling close to or even above the asking price, that shows the area is desirable. Be wary of choosing search criteria that are too restrictive. For example, select a price range 10% above and 10% below your true range. Add a 10-mile cushion to the location you specify. Ask your agent about the HOA’s in the areas you’re looking. Not all HOA’s are good ones, and costs vary widely, as do services and amenities provided. Your agent will also be able to tell you about special tax assessment rates in different neighborhoods. Also give consideration to things like commute time, proximity to services you may need, and overall neighborhood feel. Are you looking for quiet streets, parks, playgrounds? Your agent should have good knowledge of the different neighborhoods in an area.
Identify Your Type of Home
What is most important to you in a home? Is it the kitchen? Number of bedrooms? An open floor plan, lots of light, vaulted ceilings, one or two story? Do you want a large yard, or a small garden? Identify a list of the qualities you really need, and what you would like. Weigh each of your desired characteristics against the importance of price and location. Every house has its strengths and weaknesses. Old paint can be redone. It’s harder to add a whole new bedroom. Compromise on the things you can (and are willing to) change. Don’t on the things you can’t.
Be “On Call” and Bring All Parties to Showings
Most Realtors agree that you’re limiting your options and possibly wasting time if you’re only looking now and then when it’s convenient. Try treating house hunting like job hunting – if you get a lead on a property, be ready to follow up on it quickly. It’s also a waste of your time and your agent’s if the people making the decision can’t all view a property that you want to see. Make sure that you arrange to get all decision makers or stakeholders there for a showing.
Observe the Neighborhood at Different Times
Once you’ve narrowed your search to one or two homes and are considering an offer, try visiting at different times of day. Observe how the neighborhood changes – noise, traffic, etc. – and pay attention to the neighbors. Noisy or offensive neighbors can be one of the things sellers might try to hide, even though they have and obligation to disclose “neighborhood nuisances”.
Get a Home Inspection
Ok, you’ve finally got an accepted offer, and it’s time for a home inspection. Inspectors say the most commonly encountered problems can be things like defective plumbing, cracked foundations, water damage, a faulty roof, or overworked electrical system. Your Realtor can help you find a qualified home inspector, and this should happen early in the escrow process. If the inspection turns up something, discuss with your Realtor any repairs or concessions you want from the seller, or whether it’s a deal breaker. Don’t be afraid to walk away from a bad deal. There will be other properties, maybe even better ones. Remember that this is a financial transaction and that your terms must be met.
That’s about it. You’re ready to get out there and start looking, and hopefully make that offer on your new home. Keep in mind that the process may take longer than you think, and you may have several disappointments before you ultimately get what you want. Plan for that, and know that we will be there to help you through it, and everything that comes after – your search, home inspection, contingencies, negotiating concessions. Everything right up to handing you your new keys! If you have questions on any of this, want more information, or are ready to start your house hunting, contact us!