Is the goal of purchasing a new home at the top of your 2016 New Year’s resolutions? Planning is key to make your dream a reality. Enjoy these smart and purposeful tips from our Lead Buyer Specialist Lisa Kittleman.
New Year’s Resolutions to Help You Purchase a Home
1. Decide what you want–Build on the excitement of the new year with this fun step. Take detailed notes about location, size, type of community, whether you plan to expand your family while in this home, commute time, design and amenities. It is a good idea to rank and prioritize your list in case you must make decisions quickly. (Ex: Are you willing to trade less bedrooms for a larger kitchen? Longer commute for better schools?)
2. Before stepping foot in a house, put your financial “house” in order. — Now it is time to become realistic about what you will be able to afford. BankRate offers a new home calculator for a rough estimate. Determine your budget and stick to it. Know your credit scores and save for a down payment, closing and loan fees. Over and above saving for the purchase of your home, you should build a healthy savings account. Joseph Gyourko, professor of real estate at the Wharton School of the University of Pennsylvania says to remember this good rule of thumb. “On average, you’ll spend 2.5 percent to 3 percent of your home’s value annually on upkeep, repairs and maintenance. If you’re buying a $250,000 home, aim to save $520 to $625 per month,” Gyourko says.
3. Get pre-approved for financing BEFORE you start to house hunt. — “Pre-approval” means you have a pre-approval letter from a loan officer that confirms you have borrowing power and readily qualify for various mortgage programs. It’s important to know your credit score. “If possible, stop applying for new credit a year before you start house hunting, and keep the moratorium in place until after you close on your home,” John Ulzheimer, CreditSesame credit expert says. After being approved, don’t get caught up into buying items for your future home that could put your credit status in jeopardy because your letter is not a final loan commitment.
4. Buy a home that you both like and can afford now. — Shop for the long term, as short-term ownership can be expensive. Real estate markets and family dynamics vary, so you want to be content in your home even if your original plan for re-sale down the road would not immediately cooperate.
5. Hire a GREAT Team — The Internet allows buyers to do extensive legwork, but there is no substitute for experienced professionals. A real estate agent will know the market, save you substantial time, money and emotional heartache by advocating for you and guiding you to make the right offer.
-Enlist a buyer specialist that will represent you exclusively and be a savvy negotiator looking out for your best interest. (Look for Certified Negotiation Expert (CNE) credentials- At the Kittleman Group, both Lisa and Laura possess their CNE.) Home buyers entering into new construction ventures may often designate a buyer’s agent FREE of charge–the builder/developer is responsible for the buyer agent’s fees.
-A Realtor helps greatly with paperwork. In October 2015, the Consumer Protection Board adopted the new TRID (TILA-RESPA Integrated Disclosure) Rule that changes the home buying process. It is important that you select a Realtor knowledgeable with those changes.
–Realtors can offer recommendations for the other services you’ll need. Realtors have established relationships with mortgage lenders, home inspectors and know who to call to assist with other steps in the buying process.
6. Inspect the home before closing — Take the time to “sniff out” any issues. Do you notice odd odors from mold or pets? Does the toilet flush properly? Open appliances to see if they are in working order on the inside. It is important to remember the status of a home may change overnight, so re-check everything as close to closing as possible. You don’t want the unexpected housewarming present of moving in to find that something leaked and caused damage AFTER your final inspection.
7. Protect yourself with insurance — The time to obtain insurance coverage and home warranties is at closing, so be sure to discuss your options with a reputable Realtor or insurance broker PRIOR to closing. Ask about limitations, costs, deductibles and other factors.
Statistics show that the key to keeping New Year’s resolutions is diligence and taking the smart path. Give Lisa a call today at (301) 785-5893 to partner together to achieve your 2016 goal of purchasing a new home!