Making buying decisionTopic: Home buying
A first time home buyer may be terrified just thinking about the home-buying process...where to go, who to choose, can I afford it...how to get started.
ONE: There is no "perfect" time to buy, any more than there is a right time to sell. If you find a new home now, don't try to second-guess the interest rates or the housing market by waiting. Changes don't usually occur fast enough to make that much difference in price, and remember a good home won't STAY ON THE MARKET LONG.
SIDEBAR: "FOR SALE" signs in yards DO NOT guarantee that those homes are still available. Often times, real estate signs will remain in the yard until the home has officially "closed" and is off the market. This happens primarily because deals fall through (do not work out) and the home has to be put back on the market, after being taken off for that buyer. If you work with a Real Estate Agent you will be able to verify the true status of the property at all times. If the deal falls through and you're working with an agent s/he can notify you immediately that the home is now back on the market.
TWO: Don't try to be a "killer" negotiator. Negotiation is definitely a part of the real estate process, but trying to "win" by getting an extra-low price may lose you the home you love.
SIDEBAR: If you are bidding on a highly desirable home, you want to make sure your offer is attractive, stands out and gets the seller's acceptance!
Always start by making an offer "lower" than the asking price for the home, but be careful not to "low ball." Often times first time home buyers think that if the seller "really" wants to sell they'll accept their offer. That is "improper" thinking. Sellers' have a choice in the offer they'll accept just as you have the choice in the home you'll purchase.
If you love the home and feel that it is the "perfect fit" for you and/or your family negotiate appropriately, fairly and wisely. Why miss out on the right home because you keep going back and forth with the seller over $1,500? Besides, $1,500 divided by 30 years (360 months) is a mere $4.16 cents more per month. Don't lose your dream home over dollars and cents!
THREE: Don't wait until you've found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
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SIDEBAR: Before you make an offer on a home have your business in order! Make sure you have a pre-approval letter, know how soon you can move (closing on a home usually takes 30 days from the date your offer is accepted). Therefore, you have to wrap up loose ends at your current residence. Sellers don't like to have contingencies (i.e. stipulations) in the contract. For example, you can't close on the property until 90 days from the date of the accepted contract.
Remember there are other buyers in line looking at the same houses you may be considering. Be prepared. Be ready to play ball. Handle your business to help ensure a smooth transition.
FOUR: Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don't leave yourself short and let your home deteriorate.
SIDEBAR: It would be wise to have an emergency fund set aside for repairs and maintenance in your new home. Trust and believe things will happen in your new home. Unlike renting, there is no one to call at the leasing office to fix the toilet. Keep in mind that these responsibilities are now those of the first time home buyer.
But, don't be discouraged, because the benefits you receive as a first time home buyer FAR outweighs home maintenance. Remember, this is "your" valuable investment.
FIVE: Accept that a little buyer's remorse is inevitable and will usually pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits!
SIDEBAR: This one perhaps is one of the most important. Once you commit to one home (especially after looking at over 20) you'll wonder if you chose the right one. You'll wonder if you should have waited until next year and so on and so on. Understand that this feeling is common among the majority of buyers. Once you've chosen your home begin to settle, relax and start to visualize you and/or your family living in your new home. Those feelings of remorse tend to drift away.
Remind yourself that first time home buyers are wise adults who are building wealth for their futures. 2008 is the year for first time home buyers!