There are few purchases in life as exciting as buying a home. Whether you are buying your first home, moving up to your dream home, or downsizing after the kids have gone, it is important to take reasonable steps to protect yourself in the process of buying a home.
They say you don’t make money when you sell real estate, you make money when you buy it. You see, you might receive your sales proceeds when you sell your home, but it’s how well you bought your home that will determine how much your proceeds will be at closing. Making the wrong decision in buying a home can have devastating and long-lasting effects while making a wise home buying decision can greatly enhance the overall value of the investment.
When buying a home, it is often best to use a systematic approach, as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion. Buying a home can be an emotional process. Nevertheless, it is imperative to keep your emotions under control and not let them cloud your judgment.
Here are five steps you can take to protect yourself in the process of buying a home
#1 – Get your financing in order before beginning your search
There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there and search for your dream home is understandable, it is vital to line up the financing you will need before you start shopping for a home.
Getting the financing ahead of time has a number of important advantages, including knowing how much house you can afford and it makes your offer. By knowing how much you can afford before you shop, you will avoid wasting your time looking at properties that are out of your budget.
It is also important to take a good look at the various types of mortgages on the market before getting started in the process of buying a home. These days, there are many more loan products to choose from than just the typical 15 or 30-year mortgages. For that reason, potential home buyers need to understand their options and to decide which mortgage is the best choice for their needs.
#2 – Don’t focus on distressed properties thinking you’ll find a great deal
A number of home buyers look into purchasing distressed properties, such as foreclosures or short sales, in search of a great deal. If you’re looking to invest your money, then a distressed property can be a good deal. Distressed properties will normally require repairs and time to wait. If you’re looking for a home you can actually move right into; then you shouldn’t waste your time looking at only distressed properties.
Getting a good deal on a distressed property could take months to close, and by the time you’ve spent the money on renovations it may not turn out to be quite the “deal” it started as. Spending all of your time looking at distressed properties could also result in missing out on homes that may suit all of your needs and are well priced. Don’t focus only on distressed properties thinking you’ll find a great deal. As a home buyer, keep in mind that you are looking for a new home first and foremost — bargains are nice, but you shouldn’t be focused only on that. Focus on finding the home you want, and that meets your home buying needs.
#3 – Inspect the neighborhood, not just the home
The neighborhood in which a home is located can be as important as the home itself. It is crucial to determine if there are any objectionable conditions nearby, and if so, what are those conditions and how far away from the house do they need to be so they are no longer a concern. For example, a grocery store may be a convenience for some buyers and a problem for others. It’s also important to consider things like distance from work, shopping, schools, etc.
We have all heard that location is the key consideration when it comes to real estate, and that certainly is the case. Buying a house in the wrong area can be a big mistake, so it is important to choose the location as well as the home. Potential buyers can learn a great deal about the nature of the various neighborhoods simply by talking to neighbors, driving around town, as well as by talking to other residents. Take your time during this part of the process of buying a home and get familiar with the area.
#4 – Be fair with your first offer
Trying to lowball a seller on the first offer can backfire as can paying too much. It is important to carefully evaluate the local real estate market and to compare the asking price of the home with what similar houses in the neighborhood have sold for. Comparing the sales of comparable homes, which are the most similar homes to the subject property, is one of the best ways to determine what is fair market value, and to make sure that you neither overpay or underbid on the property.
#5 – Always get a home inspection by a professional home inspector
Always investigate the home for any possible defects before making an offer. Home inspectors help buyers evaluate the condition of the home based upon one or more visual inspections of the property. Many home inspectors are members of professional associations that, among other things, require their members to perform a standardized inspection of the property. Always ask home inspectors about their qualifications and expertise in inspecting homes before making your selection. Compared to the cost of the average home, the price of a quality home inspection is virtually negligible and could save you thousands of dollars down the road. It’s also important to have the home inspected for termites and other wood destroying organisms and obtain an official Georgia Wood Infestation Report that can only be prepared by a licensed pest control company.