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What are your reasons for buying now?
Would it surprise you to learn that research shows that most home buyers don’t decide to purchase a home for financial reasons? In fact, it’s other considerations such as a safe neighborhood, good schools, or more space for your family, and even maintaining control of your space via ownership. Think about what is bringing you into the market and determine if the reason is strong enough to move you forward to the next step.
Where are home values headed?
Is the market going up? Or has it been depressed? Does the current inventory match the demand? Current projections are that Home values will appreciate by 4.4% in 2015 and by 19.3% in 2022. Even the most conservative estimates have a cumulative appreciation of over 11.7% by 2022.
Where are mortgage rates headed?
Are rates dropping or on the rise? If the rates are currently low and projected to rise to get into the market while they are low could save thousands of dollars over the term of the loan. The Mortgage Bankers Association, The National Association of Realtors, and Freddie Mac have all projected that mortgage rates will increase by approximately 1% over the next 12 months.
How do your finances look? – Be Honest!
Is your income stable and steady? What about your debt? How is your credit history? Do you have sufficient savings for a down payment? All of these factors not only impact whether you would qualify for a loan, but also at what interest rate.
How much are you comfortable paying per month?
Your lender will give you a pre-approval number at the beginning of the home-buying process, but as attractive as that number may look, would you feel comfortable taking on its corresponding monthly escrow payment?
A higher mortgage may require belt-tightening in other areas such as vacations, buying the latest tech gadgets, or even going out to eat. Are these luxuries that you are willing to forgo for your dream home?
What are your absolute must-haves in a home? As well as your wish list and don’t want?
While no home will give you 100% of what you want, what are your non-negotiables? Are you willing to put work into the home? Or would you rather pay more to have those must-haves?
By the same token, are there features you absolutely do not want? Or things that would be the icing on the cake? Knowing these criteria will help me focus your search and find you a property that checks most of the boxes.
What is this property worth in today’s market?
Now that you’ve decided it’s the right time to buy and you’ve begun looking, how do you know what the homes you are looking at are worth? For ethical reasons, I cannot tell you how much to offer, but I can show you comparative properties that have recently sold in the market to help guide you to a price you feel is fair.
I can also tell you how long homes are staying on the market and the percentage of asking prices that the sellers are getting. This information will tell you how hot the market is.
Lastly, we’ll look at how long the home you’re interested in has been on the market, this will give us an indication of whether the market is slow or if the home is overpriced.
How flexible is the seller’s asking price?
I’ll start the negotiation process by feeling out the seller’s agent, and asking how firm the seller is on the price. This will help us to avoid offending the seller with a lowball offer.
Additionally, when asked in the right way, a seller may be willing to help out with closing costs. These are nuances that are handled during negotiations.
What’s wrong with the house?
This could be an important question and something you should keep in the forefront of your mind as you enter escrow. But even before you get to that point, sometimes asking point blank, or reminding the seller’s agent that you’ll likely find out during the disclosures and inspection process may get them to be more upfront with the information.
If you know there are repair issues that are deal breakers finding out ahead of time could save both parties a lot of time.
What are the potential Natural Hazards for where the home is located?
Is the home in a floodplain? If it is the lender could require flood insurance, the cost of this policy could affect the cost of living for the home. FEMA maintains a free online map that will show if your home-to-be is in a flood plain.
Once you have your information you can weigh your options and determine if the added insurance is feasible.
Where do you see yourself in five years?
It may sound simple, but really it boils down to, whether is this a forever home, or the first step on the property ladder that would bring you eventually to your dream home. Looking ahead five years can help you decide whether you see yourself staying in the area, or even at your job. Knowing your long-term plan can help you to decide on where to compromise when deciding on a home’s features versus its price.
Once you’ve answered these questions you’re ready to see what’s in the market and I’m ready to show you. Using my Buyer’s questionnaire I’ll narrow our search to properties that meet your requirements ensuring the best use of your time.
Then once we’ve found our dream home I’ll put my years of experience to use and negotiate the best deal, factoring in cost as well as seller concessions on closing costs and/or necessary repairs. So let’s start looking, today!