A lot of thought, money and work go into buying your first home. It’s not a transaction you encounter very often, so it’s understandable if you are not familiar with the steps to buying a home. It’s the job of your real estate agent to guide you through that process — but could you be unwittingly sabotaging the home buying process?
Hopefully, you have a healthy working relationship with your agent, and he or she will be honest with you about what you’re doing wrong. But if you want to try to make the entire process smoother, take a look at these things your real estate agent wishes you knew about buying a home:
Get pre-approved first, shop second
It’s important to know what you can afford to spend before you start shopping for a home. While online home affordability calculators may give you a ballpark figure of what you can afford to pay, a pre-approval will provide you with a more accurate idea of how much you can borrow and what your monthly payment may be. To get pre-approved, you’ll have to provide detailed information about your income and assets and authorize the lender to pull your credit. It may require some work on your part to gather all of the necessary documents, but getting pre-approved can help you act quickly when you find the perfect home.
Hire a buyer’s agent
You’ve been looking at listings online or driving around your dream neighborhood checking out “For Sale” signs, and you’ve found the perfect place. If you don’t know how to find a real estate agent, it might seem like the logical next step is calling the listing agent, whose name and number appear on the sign — but you’re better off hiring a buyer’s agent.
A listing agent’s primary responsibility is to protect the seller’s interests. In many states, it’s legal for one agent to work for both the buyer and seller, but it can cause a potential conflict-of-interest situation. Assuming the seller wants to get as high a price as possible and the buyer wants to get the best deal, it can be challenging for one agent to balance the interests of both parties.
And just in case you’re worried by the cost of hiring a buyer’s agent. Typically, the seller pays a commission for both sides of the transaction.
Don’t spend more than you can afford
If the “perfect” house is outside of your budget, it might not be the perfect one for you. Although you might be able to get creative with financing, come up with a larger down payment and somehow “make it work.” Buying a home you can’t afford can become a major burden and source of stress.
Remember the down payment, closing costs, and monthly mortgage payments are just a few of the many expenses of buying your first home. You’ll also need to pay property taxes, insurance, and possibly homeowners association fees. You’ll need to budget for utilities, repairs, and maintenance.
And with so much of your income going toward housing costs, you may have trouble meeting other financial needs, like covering emergency expenses or saving for retirement.
Don’t apply for new credit
You made an offer on the house, it was accepted, and you’re already planning how you’ll make the house your home. It might be tempting to sign up for a new credit card to buy big-ticket items like a washer and dryer, a lawn mower, or new furniture. But hold off until after you close.
Your lender will be reviewing any transactions that may impact your credit right up to the day you close. Any changes in your circumstances — even opening a new account without charging anything to it — can delay or even cancel your loan. Save the new credit offers until after you close and the keys are in your hands.
Lean on your agent to guide you through the steps to buying a home, follow the tips above, and work with one of our friendly and helpful mortgage advisors to find the right loan for your home buying needs. Contact us today and let’s get started!