Should I talk with a bank before looking at homes?
The answer to that is oh YES! There are powerful reasons why it’s smart to talk with a bank and get pre-approval before home shopping. Perhaps most importantly, talking with a bank before looking at homes can help you understand exactly how much you can afford. It wouldn’t make sense to search homes that go for $250,000 if you can only afford up to $200,000.
If you’re a first time home buyer, a bank can help you sort through the many first time home buyer programs available. These programs can vary from state to state and county to county, so the bank will let you know exactly what’s available to you.
Lastly, important reason to talk with a bank before looking at homes is so you understand exactly what costs are associated with buying a home. There are many home buyers who don’t understand the difference between a down payment, pre-paid items, and escrows, which can be thoroughly explained by a mortgage professional. A mortgage professional can give you advice on the type of financing you need and also whether or not you should request the seller to contribute towards your closing costs, also known as a seller’s concession.
Why should I use a real estate agent?
Real estate representation during a real estate transaction is important for both buyers and sellers. For a few reasons, like fiduciary responsibility. Real estate agents have experience and expertise to help buyers and sellers protect their interests.
Buying or selling a home is not like buying a movie ticket. Every home is different and laws vary and change every year from state to state. Generally speaking, people purchase a new home every 7-10 years and a lot can change the next you’re looking to buy a home. Having a real estate agent ensures you can navigate the home buying matrix without getting lost or overwhelmed.
Real estate agents help with the not so fun part after you find the home of your dreams. The real work is the in the legal side. Today’s contracts can be 50 pages long, not including addendum’s and riders. Real estate agents can help you navigate these tedious documents and create an attractive offer that favors you. Additionally, when it comes to negotiation, your real estate agent is your advocate and can bring an authoritative voice to a highly interpretive situation.
How do I choose who to use?
The industry is saturated with real estate agents. Here are some parameters to help you choose one to help you buy your dream home:
- Talk with recent clients.
- Look up the licensing.
- Pick a winner.
- Select an agent with the right credentials.
- Research how long the agent has been in business.
- Look at their current listings.
- Ask about other houses for sale nearby.
Should I buy or continue to rent?
Buying a home can be a really smart investment. But that said, there are many factors and variables, so renting can be a better option for some depending on your personal circumstances. The current interest rates are great. A 30-year FHA mortgage can be had at a rate of around 3.5%. Since the interest rates are so low, it actually can be cheaper to pay a mortgage right now than paying rent.
There are other questions that you should ask yourself before deciding to buy a home. One of the most important is to consider the length you plan on staying in a home, if you chose to buy. If the answer is only a few years, it’s likely the better decision is to continue renting. Another question to ask yourself is whether you are ready to take on the additional “responsibilities” of owning a home. When owning a home there will be general home maintenance that should be done, are you ready for that?