Before You Buy
1. Know your credit score.
Your credit score is one of the biggest factors in what your loan terms will be.
2. Obtain a 'pre-approval letter' from a lender before shopping.
A pre-approval letter confirms that you should be able to obtain a loan in the amount stated in the letter as long as nothing changes about your financial situation or your credit score. One of the first things sellers will ask their agent when receiving an offer is how qualified the buyer is to purchase. A pre-approval letter helps the seller feel comfortable knowing the buyer is not going to get turned down for the loan.
3. Work with a skilled Realtor that knows the area.
Every neighborhood has its unique qualities that you want to be aware of before you buy. An agent that is well-informed will have inside knowledge of the qualities about each neighborhood, and will know what homes there are worth, which will help you avoid offering too much for a property.
You want a real estate agent who knows their stuff locally! Choose someone that is full time working in the business every day and has a recent history of successful sales. The more the real estate agent knows the area, the better equipped they will be to quickly value each home that you tour.
4. Don’t do anything to affect your financial situation.
Your pre-approval is based on the information given at the time of your application. Now is not the time to change jobs, take out a car loan or make a major purchase that significantly effects your asset liquidity. These changes can result in denial of the loan request when you go to purchase a house, regardless of a 'pre-approval letter.
Navigating the Home Search Process
1. Find Out About the Neighbors.
Once you find a home you love, visit the neighbors to make sure you can see yourself in that location. It also helps to visit the neighborhood at different times of the day to get a better feel of what day to day life would be like.
2. Be Prepared to Move Fast
In a seller's market, properties often receive multiple offers after only a few days on the market, so it's possible you'll miss out if you're not ready to move quickly. Include a pre-approval letter in the offer so the seller knows you're serious. If there is a lot of interest in the home, write a letter to the seller explaining why you love the home, offering a personal connection that may position you as the best next owner.
Making the Purchase
1. Hire an inspector
Protect yourself and hire a professional inspector or engineer to evaluate the home before you sign a final agreement. Their expertise will help expose potential problems that could become a huge financial burden down the road. Results of an inspection can be used to negotiate the original offer price.
