Buying the Right Home for You
The good news is that there are many things along the way—specifically within those first 30 days—that can be controlled. You can control how you approach the process, whether or not you do your “homework” and the final decisions you make. As you start the process of searching for and buying a home, focus attention only on circumstances within your control. The rest—as you’ll see—has a way of falling into place. Using tips from experts and contented homebuyers, you’ll have the knowledge to survive your first 30 days of buying a home.
How Home Buying Begins
Money makes the world go around, so it’s no surprise that the first thing you’ll need to do is receive pre-approval—also called pre-qualification—for a mortgage. A pre-approval lets you know how much a lender will commit toward your home purchase. In addition, it adds credibility and buying power. “Getting pre-approved by a lender lets sellers and agents know you’re a serious buyer,” explains Jack Guttentag, author of The Pocket Mortgage Guide: 60 of the Most Important Questions and Answers About Your Home Loan. Without pre-approval, sellers won’t take your offer seriously; only buyers with their finances in order receive attention.
Guttentag advises buyers to ignore the mortgage companies who solicit, as many offer poor rates and risky mortgages. “Not every loan provider who solicits is a predator, but all predators solicit,” he cautions.
Standard & Poor’s reports that sub-prime mortgages—or loans for less-than-optimal borrowers—accounted for $600 billion, or 20%, of home loans in 2006. Many homeowners have gone bankrupt and experienced foreclosure under the extraordinary terms of these types of loans. You need to be in control of your mortgage options, so it pays to do some shopping for the best rates and terms.
Finding a dependable, ethical real estate agent is your next move. Objective referrals from friends and family can help you narrow down your search. However, if no referrals are available, write a short list of three or four agents and speak to each over the phone. You may be able to weed some out just from the call and you can arrange to meet the others to see if your personalities mesh. However, resist using licensed relatives or family friends out of obligation. When it comes to an important decision like a home purchase, doing business with family, friends and acquaintances often gets sticky.