|Clients' Adam & Andrea used these guidelines when buying their home in June|
How can you avoid potential pitfalls? Keep these guidelines in mind:
Review your credit reports ahead of timeReview your credit report a few months before you begin your house hunt, and you will have time to ensure the facts are correct, and be able to dispute mistakes before a mortgage lender checks your credit. Get a copy of your credit report from Experian, Equifax, and TransUnion. Why all three? Because, if the scores differ, the bank will typically use the lowest one. Alert the credit bureaus if you see any mistakes, fix any problems you discover, and don't apply for any new credit until after your home loan closes.
Before getting serious about your hunt for a new house, you'll want to choose a lender and get pre-approved for a mortgage (not just pre-qualified-which is a cursory review of your finances-but pre-approved for a loan of a specific amount). Pre-approval lets sellers know you're serious. Most importantly, pre-approval will help you determine exactly how much you can comfortably afford to spend.
Know what you want
You and your real estate agent should both be clear about the house you want to buy. Put it in writing. First, make a list of all the features and amenities you really want. Then, number each item and prioritize them. Now, divide the list into must-haves and really-wants. A good place to start is the HUD Wish List.
Account for hidden costs
In addition to the purchase price of the home, there are additional costs you will need to take into consideration, such as closing costs, appraisal fees, and escrow fees.
Once you find a prospective home you'll want to
Estimate how much it will cost to maintain (gas, electric, utilities, grounds, etc,),
Determine how much you will pay in taxes month and/or annually,
Calculate any homeowner or development dues associated with the property.
Get an inspection
Buying a home is emotionally charged-which can make it difficult for buyers to see the house for what it truly is. That's why you need impartial third parties who can help you logically analyze the condition of the property. Your agent is there to advise you, but you also need a home inspector to assess any hidden flaws, structural damage or faulty systems.
Evaluate the neighborhood and location
When house hunting, it's easy to become overly focused on the number of bedrooms and bathrooms, the condition of the home and its amenities while overlooking the subtleties of the surrounding neighborhood. Take time to check crime reports, school options, transit and walking scores, shopping and restaurants. Talk with neighbors and spend time in the early morning and late afternoon/evening. Online research is good but feet on the ground is the best way to get a feel for any neighborhood.
How to avoid the most common home selling mistakes will be posted next week.
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