No matter if you’re in a buyer’s or seller’s market, there are a few critical steps you can take to make a smarter purchase. Since buying a home is likely the biggest single investment you will ever make, being prepared will help you make a better purchase. Here are our best tips to buying a home.
1. Know your Buying Power
First, understand the hidden costs of buying a home. You will need to save not only for the down payment of your home – which is typically between 10%-20% of the offer price – but also for any additional transaction fees, such as transfer tax, PMI, title insurance, and legal fees.
Second, you need to figure out what you can realistically afford each month to understand how much house you can buy. Your mortgage rate will depend on your creditworthiness – if you have a high credit score, your lender will likely approve you for a lower mortgage rate, which can save you thousands of dollars per year in interest.
2. Fix Your Credit
When you apply for your loan pre-approval, you don’t want to have anything to hide on your application. So don’t lower your credit score by doing anything that will originate more inquiries into your credit. For example, don’t open any new credit cards. Also, don’t omit any debts or loans when you apply. If the loan officer discovers them in the application process, they may deny you a pre-approval.
Don’t raise any red flags with your creditworthiness in the weeks before closing. Any one of these moves could mean that you’re denied the loan and the deal falls through – even if you’ve already been pre-approved!
3. Work with a Knowledgeable Buyer’s Agent
Do you understand what kind of market you are buying into? Even within a city’s limit, there can be micro markets that are increasing or decreasing in value.
That is why it’s important to hire a highly competent real estate agent who knows the specific market. You want to make sure that the professional who you’re working with really understands what the market is like and will help you find the home you desire.
Request a Buyer’s Market Analysisfor the desired area you are looking at. A buyer’s market analysis report outlines which neighborhoods are still up and coming – with potential for increased property value – versus those that have peaked with inflated home prices. Having this analysis at your fingertips will help you know if a home’s list price is above comparable properties so you don’t overpay for a home.
Looking for a home in the Hilton Head Island – Bluffton area? Let me help you find the home of your dreams. I am well versed in this real estate market, and can provide you with a buyer’s market analysis to help you find the right neighborhood for you. Contact Me today!