January 28, 2012 by Johnny Brooks | Edit
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More home buyers will take that plunge and purchase a home this year and rightly so. With home prices down by as much as 50% in some areas and interest rates hovering at an all time low, 2012 could be the best time in years to buy a property. This combination is the perfect storm for prospective homebuyers. There is never a wrong time to buy the right house. Whether you’re a first-timer or repeat buyer, these steps will guide you through the process.
Aligning Your Finances: Getting your financial standing in place is the most important aspect to buying a home and saving money at the same time. There are numerous loan options for today’s home buyer. Decide what monthly financial commitment you want to make and stick to your plan. Lenders can show you a variety of loan packages that meet your monetary limits. Your credit score and income/debt ratio have a huge bearing on how much home you can afford. Restrain from purchasing a home that would potentially put you in a financial bind later.
Lender Comparison Shopping: Shopping for a loan improves your chances of saving money. Different lenders offer different products, so comparison shopping helps you find the best loan deals around. Speak with a minimum of three mortgage companies and make them aware of your intentions to shop around. Request a “Good Faith Estimate” ( written estimate of fees and cost) from each lender. During this initial stage, do not allow any lender to pull your credit report or make a commitment with any mortgage company. Interest rates may not vary that much, but fees do. Most lenders will reduce or waive certain fees, when they know there’s competition involved. You could end up saving yourself thousands of dollars using this approach. The eventual lender that you select, can then pull your credit report.
Pre Approval Letter: After choosing the loan company, the next step is obtaining the all important pre approval letter. This involves verification of the financial information such as employment confirmation, source of your down payment and other aspects of your financial circumstances. The majority of offers require a pre approval letter accompanied with the proposal, it gives you more leverage in negotiations with the seller and carries more weight than a pre qualification letter.
Finding An Agent: Looking for a home can be exciting and challenging at the same time. Having a real estate professional that takes the time to understand your unique needs and lifestyle is vital. Look for an experienced professional that will listen to you, conduct himself in an ethical manner and knows the market. Successful realtors have satisfied clients, ask for references. Choose your agent wisely.
Home Search: Before you visit any properties, outline what type of homes and locations are appealing for your style of living and personal needs. What characteristics in a property you will and will not accept. Should you accept a home in a prime location, but needs work. One story or two-story. Remodeled but a bit pricey. The best philosophy to start your home search, it isn’t the one that has everything, it’s the one that has more of what you want and less of what you don’t. You’ll know when a home feels right.
Making An Offer: Your agent should have given you a sample of the Residential Purchase Contract prior to showing you homes and explained the contingencies and protections this contract covers. He should also show you comparable homes on the market and properties that have recently sold in the neighborhood. How long has the home been on the market, will be an indicator whether the home is priced correctly. As a buyer, this is where your representative’