Whether you’re a first-time homebuyer or a seasoned real estate investor, buying a home is an exciting process. However, there’s a lot to consider when you decide to buy. So before you begin your search for the perfect home, here are four questions you should ask yourself.
What Do I Want?
Take the time to figure out what type of property you want to buy. From single-family and multi-family homes to condos and co-ops, there are many different options on the market, and it’s important to choose the type that fits your needs. Figuring out the neighborhood or town you want is equally important. While a property might have all the amenities you’re looking for, factors like crime rate and proximity to highways can impact the overall home-owning experience. A good idea is to list out and prioritize your needs (IE large backyard, great school system) before you begin your search.
What Can I Afford?
The rule of thumb is that you should never spend more than 30% of your monthly income on a mortgage payment. An alternate rule states that you can afford to buy a property that runs about two and half times your annual salary. For a more tailored look at what you can afford, use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.
Am I Financially Prepared?
A few months before you start searching for a home, review your credit history and make sure it is in good standing. Experian is just one company that offers this service. Get copies of your credit report, ensure that it’s accurate, and fix any issues you discover. It’s likely that you’ll also need a loan for your new home, so you’ll need a pre-approval, which is required to put an offer on a home. A pre-approval from a lender is based on your credit history, debt and income. If you need help with a lender, please ask me!
How Do I Make The Best Bid Possible?
Do your research! Your opening bid should be based on the sales trends of similar homes in the area. So before making an opening bid, get online and review the selling prices of comparable properties. If these properties sold for less than the current asking price of the home you’re looking at, you can feel comfortable making a bid that’s slightly lower than what the seller is asking. I can also help with “running comps” for you!