5 Tips When Buying A Home in Spring
Spring has arrived, and it's a great time to buy a home!
If you're still on the fence on making the most out of the season and the increased inventory, don't wait. It may get a little overwhelming, not to mention competitive, when buying a home during springtime, but it is still the best time to do so. And with home prices expected to continue to rise and mortgage interest rates projected to increase, there's not much sense in waiting any longer. Improve your chances of scoring that home with these tips!
If you’re buying in a competitive market, getting preapproved or pre-qualified can give you an edge when buying a home — especially if you wind up in a bidding war. Pre-qualification also helps you know your limits in terms of how much you can spend on your new house. There is nothing more frustrating for any homebuyer than falling in love with a dream home and finding out it's outside of your range.
Prequalifications usually last between 60-90 days, so do this step once you’re no longer casually looking at homes and you’re really ready to buy. When you get prequalified, a lender reviews your credit report, and may review your pay stubs, W-2s and bank statements to determine exactly how much they will be willing to give you. It’s not a loan commitment, but it does speed up the underwriting and loan approval process, which means you can close on your home faster. A preapproval willl also show the seller you’re serious, and a quicker closing time could also play a role in getting prioritized over other people's offers. If you can, it is better to get your preapproval from a local lender, which could be a local bank or a local mortgage broker, since offers that contain a local lender's preapproval letter will probably get preference.
Know What You Want, and Keep Your Focus
Who wouldn’t want all the bells and whistles, or a home where you don't need to make a lot of changes to? Make your wish list, but before you head out on your search, do your research online to find out what the homes in your price range are actually offered in your desired neighborhood. Doing so will help you determine where you might be willing to compromise. By reviewing what you really want and what you can actually afford, you can ensure you’re looking in the right places, and you can avoid setting yourself up for disappointment.
Once you do find homes, keep your eyes on the prize and focus on the house, not the owner. Don't get all hung up on whether the home is a foreclosure, a short sale or owned by a traditional seller. Concentrate on location, and whether or not the house meets your basic requirements.
Know Your Numbers
Knowing your numbers is important if you want to have a smooth home buying process. Understanding how much you can afford, the estimated monthly payments, private mortgage insurance payments, taxes, and even the water and sewer bills will allow you to make better informed decision. Knowing the numbers will also help you make a realistic budget, and could help you narrow down the homes you’re interested in. A loan officer will be able to walk you through these calculations, so when you tap one don't be afraid to ask questions.
Once you know your budget, don’t be afraid to spend. Some buyers focus on how much the seller is asking instead of on how much the home is worth. Your agent should be able to show you a CMA of comparable sales, which can help determine actual value. Remember, just because a seller is asking for a certain price doesn't mean that it's what the home is worth.
Go the Extra Mile
Giving the seller something other buyers will not will go a long way towards increasing your chances with landing that home. There are many terms contained in a purchase offer, and negotiation is not always about the price. You can give the seller a benefit to take your offer without actually waiving your rights. You can ask your agent to make suggestions for you. It could be something as small as giving the sellers an extra day to move out.
Hire a neighborhood specialist
Hiring a dependable real estate adviser can make the challenging and competitive process of buying a home much easier, especially during the spring time when many other buyers are actively in the market. All real estate is local, and a real estate agent who specializes in the area where you want to buy will be a wealth of information and can ensure smooth sailing for your purchase process. It is also a good idea to make sure you and your real estate agent have good chemistry, since you’ll be working together a lot.