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Joe Smith

Sales Associate

Are you buying a home?

Buying a home is probably the biggest investment you will make, with long-term financial ramifications. It calls for many informed decisions and for good advice from a real estate professional. When buying a home, you can learn from the knowledge and skill of a real estate agent. 

What can a real estate agent do to help you buy the right home? 

 

 Top 9 Tips to Successful Home Buying

Tip #1: Research is the Key To Discovery

Home sellers won't call you with an offer to buy a maintenance-free home with a wonderful mortgage. You have to find the gems yourself.end up with your American dream, here are things you can do: 

Tip #2: Make a Plan and Get Pre-Qualified

Every important decision needs to be clearly thought out. Developing a home buying plan can help you focus on the important factors and organize the entire process. Loan pre-qualifying helps you determine the home price you can afford and present you as a genuine prospect to the seller. A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of the panic mode and allow you to take advantage of opportunities. A thorough plan will save both time and money!

Tip #3: Value, Value, Value

The classic rule of buying the smaller house in the best neighborhood still applies. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price. 

Tip #4: Create a Top 10 List of Amenities 

When shopping for a home, list the features (fireplace, fenced-in yard, new appliances, etc.) that are most important to you in deciding on which home to buy. Establishing "your criteria" early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim. 

Tip #5: Fixed vs Adjustable Rate Mortgages

Adjustable Rate Mortgage

Fixed Rate Mortgages

Whichever loan you choose; make sure that you scrutinize all the closing costs. If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures (your real estate agent has publications to assist you). Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest cost, and shorten your loan term with only small extra principal payments. 

Tip #6: Sign a Contract That Protects You

Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Ensuring that the contract you sign will minimize potential legal battles will let you swim in your new pool with your family and neighbors instead of with the sharks. 

Tip #7: Develop a Mortgage Shopping Cart

One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are 10,000 lenders competing for our mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today, you can apply for a loan over the internet or even use a mortgage broker to shop for your loan with hundreds of lenders. When choosing a lender, you want to compare the fixed rates to fixed rates, not fixed to ARM's. Create a chart that lists different types of loans, fees, and a couple mortgage providers. 

Tip #8: Get a Quality Home Inspection

Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives - their homes. Paying for a qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of dollars for repairs.

Tip #9: Peace Of Mind: Home Protection Plans

To protect you as a buyer, it is a good idea to purchase a home protection plan. What exactly is it? A home warranty, or home protection plan, is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear. The warranty covers mechanical breakdown, while insurance typically repairs the related damage. For example: if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall.