October 25th, 2018 3:59 PM by Judy Ness Broker/Owner
7 Steps to Owning Your Dream Home
by Judy Ness, Broker
Homestead Realty LLC
Thinking about buying a new home – or purchasing your first home? As interest rates have crept up slightly over the last several months, many prospective buyers are feeling a sense of urgency to make a move. However, before you “jump into the deep end of the pool”, a little bit of preparation will go a long way in making your home buying process as stress-free as possible. Here are a few tips to get you started:
A competent real estate professional, who has good knowledge of the local market, can help make sense of all of that information on the internet – and guide you through the process of submitting an offer, negotiation, financing, home inspections, appraisals, and more!
Once you get prequalified, it is important that you STAY prequalified. Too often would-be homebuyers have destroyed their chances of getting financing by making costly mistakes. DON’T: quit your job, open new credit or charge accounts, miss payment obligations, make a large purchase, accept a gift of money from anyone who is not a blood relative and willing to sign a gift letter, etc. Basically, don’t do anything that changes your financial picture during the financing process.
Another advantage of prequalifying is that if you have some bumps in your credit history, a competent loan officer can advise you as to what you can do (legally) to get your credit in shape. Be wary of companies that provide “credit repair” for a fee. And unless stripes are your favorite wardrobe pattern, do NOT lie on your mortgage application. Mortgage fraud is serious!
I always encourage buyers to not only look at what the lender says they can afford, but to also carefully look at their budget and determine the amount of monthly house payment they can live with. It is no fun to be “house poor”; feeling like you can’t have a family vacation or evening out because you are strapped by your mortgage payment. It is also important to plan for unexpected repairs or emergencies when you own a home, and have a contingency fund. You don’t want a roofing repair or new water heater to throw you into foreclosure.
Keep in mind that the transaction is most likely to go smoothly if BOTH parties feel like they have “won” – at least on some points important to them. Decide what is most important to you - price, terms, or closing date – and negotiate accordingly.
Sometimes buyers who are short on funds are tempted to skip the home inspection, but I strongly discourage that decision. The purpose of a home inspection is to be sure that there are no major (read expensive) defects or repairs that are unforeseen. Although home inspectors cannot predict the future (and can’t see through walls to discover hidden defects), a good home inspector will help you identify what is a serious problem, and what is a maintenance issue. I always encourage homebuyers to attend the home inspection whenever possible, so that they can become educated about the home, and ask questions.
Once the home inspection is complete, you may need to go back to the table to negotiate repairs – or cancel the transaction altogether. Your agent will be instrumental in advising you through the process.
The agents at Homestead Realty LLC are seasoned professionals, and know the southern Minnesota market well! We would be honored to help you – give us a call today!