Maybe you’re just perusing the new homes for sale in the vibrant community you dream of calling home one day, or maybe your lease is nearly over and you have a deadline you need your new keys by. Whatever stage you are in the home buying process, it is valuable to know the following real estate tips that will help you land the home of your dreams and never regret it:
- Sit on your wallet. Mortgage lenders want to know that you are stable and reliable with your money. You’re going to have to provide a paper trail of your cash for three to six months prior to closing on a home. Any big purchases or movement of money can be seen as a red flag to a lender, and could even make the whole deal fall through.
- Get pre-approved. A lot of people confuse being pre-qualified with being pre-approved. Being pre-qualified is an unofficial number based on the information you provide. Getting pre-approved is a more in-depth process in which the loan officer actually reviews your financial records and provides an actual mortgage that you qualify for. This saves you the heartache of looking at new homes for sale that are actually outside of your price range.
- Don’t wait until the carriage turns back into a pumpkin. If you get obsessed with buying while the market is low, you may miss out on your dream home. Outside of the great housing bubble of 2006, housing prices tend to vary cyclically, but don’t vary so much that you’d save an arm and a leg by sitting on it.
- Don’t let your eyes get bigger than your stomach. Don’t limit yourself by only looking at new homes for sale that are really large. Size is only a small factor in what makes a house great. Buying more than you need can land you with a huge mortgage and maintenance fees that take the joy out of your house.
In fact, from a re-sale perspective, the valuation you’ll get on your home is based on what other homes in your neighborhood sell for. If you have the biggest home on the block and all the small homes sell for half as much as what you paid, you will have a harder time getting your money out of it if you resell.
- Be conscious of sleeper costs. When you buy a home, you are not just taking on the mortgage. You also will be responsible for homeowners insurance, property taxes, HOA fees, and maintenance on the home. Some estimates suggest that you will end up spending 20% of the home’s value on maintenance throughout your ownership of the home. Make sure you are aware of all of these additional “sleeper costs” so that you can make sure your finances can accommodate them and they don’t prevent you from enjoying life as a new homeowner.
Do you have any tips for first time home buyers? Please share them in the comment section below.