Some people find it challenging to make the decision and finally a house. This is because a home is a lifetime investment. Another reason is that finding the best property to purchase has become even more challenging.
These days, foreclosures and short sales saturated the market. According to reports, homes listed by the end of 2021 were 19.5% fewer. Despite the decrease in listings, there are things buyers like you can do to improve your chances of success.
The following are five tips that will make buying a house a more successful experience:
1. Find the Right Lender
Different mortgage lenders offer varying home loan products. It only makes sense to find a lender that offers a loan program that fits your needs. Compare interest rates and fees before you choose a lender.
The right lender will be taking your budget and financial capability into consideration. They won’t be like other lenders who are just interested in closing a deal as soon as possible. Some of the best qualities to look for in a lender are as follows:
- Expertise in the local area
- Personalized service
- History of success stories
- Accurate pricing information
By taking the time to research possible lenders in your area, you can have peace of mind knowing you’re getting the best deal without any hassles. Doing so will also eliminate the chances of working with a lender that might take advantage of you.
2. Get Pre-approval for a Home Loan
Now that you found a reputable lender, you can start working on your way to getting a mortgage pre-approval. Many homebuyers would first search for houses for sale, even before getting a home loan approval. Failure to get approved for one, even before scouting for houses, can lead to disappointment and wasted time.
You must get a home loan approval first before looking for houses to buy. A home loan pre-approval is an indication that the lender is willing to finance your purchase. With pre-approval, you increase your chances of convincing the seller that you can buy the house.
Moreover, getting a home loan pre-approval gives you an idea of how much you can afford to spend on a property. This can help narrow your search and focus on homes within your budget.
Lenders can have different processes for home loan pre-approvals. But in general, here’s what you need to do:
- Submit your application form
- Provide the necessary documents like bank statements, payslips, tax returns, etc.
- Undergo a credit check
- Assets and liability assessment
The home loan pre-approval process can take a few days or weeks. Once you have received your home loan pre-approval, you can start looking for houses that fit your budget and needs.
3. Look for the Right House
Now that you have a home loan pre-approval, it’s time to start looking for houses within your budget. Narrow down your search by listing your must-haves and nice-to-haves. This will also save you time from looking at properties that are not ideal for you.
Let’s say you have a growing family. You might want to look for a house with more than just two bedrooms and a spacious backyard. If you love entertaining guests, you might want to consider a property with a large living room or kitchen. You can also look for a fixer-upper if you’re willing to do extra work to renovate it.
Don’t forget about your lifestyle and needs when looking for a house. Remember that you will be living on the property for years to come. For example, if you love spending time outdoors, then you might want to look for a house that’s near parks or has a swimming pool.
4. Make an Offer
Once you have found the right house, it’s time to make an offer. Things can get tricky because you need to determine an amount fair for both the buyer and the seller.
To help you come up with an attractive offer, consider the following factors:
- The market value of the property
- The asking price of the property
- Your budget
- Your home loan pre-approval amount
Be reasonable when making an offer. The seller might reject your bid if it’s too low. On the other hand, making a high offer might make the seller suspicious of your intentions. The best thing to do is to work with your real estate agent to make a fair and reasonable offer.
5. Hire a Home Inspector
After the seller accepts your offer, start looking for a licensed home inspector. This will help you identify any problems with the property before you finalize the purchase. However, not all buyers made the right decision and opted to skip a home inspection.
You risk your investment by not being aware of the property’s hidden problems by skipping a home inspection. Some problems can be expensive to fix and might even force you to back out of the deal.
To avoid this, hire a licensed and experienced home inspector. They will thoroughly examine the property and prepare a report with their findings. This report will make it easier to decide whether or not to proceed with the purchase.
Buying a house is a huge decision. This is why it makes sense to do your research and take the time to understand the process before making any commitments. With this short guide, you will have a better idea of what you need to do even before you start looking for your next home.