I've had a few questions about house hunting and how we went about it so below are some helpful tips hopefully. Please forgive me, as I probably left some things out, but this post is longer than it probably should be in the first place. :)
First step - get preapproved for a loan so you know what you can afford and want to afford. If you're financially savy and understand the ins and outs of mortgages, you can figure out what you qualify for ahead of time. To get preapproved, check with your local lender along with a couple of other lenders since rates are competitive and closing costs should be reasonable. Sometimes you will find the lender says you can afford some amount; but you as the buyer don't feel comfortable with this amount. For us, Wells Fargo was an easy choice since Matt works there, but we still looked at a few other lenders just to compare and understand what other lenders could offer. You might want to check into buying a 1/2 or whole point to lower the interest rate on a mortgage too. Matt is the financial guru when it comes to understanding these things though. Perhaps I should have him post regarding the financial side of things ha!
We would definitely suggest using a realtor. If you know what you're doing, you can get by without a realtor, but as first time homebuyers especially, it is helpful to have a realtor and their knowledge/experise. The realtor should represent you as the buyer (not the seller). We would recommend seeking an experience ABR (Accredited Buyer's Representative). It's important to trust your relator and make sure they know what you like, dislike, price range, etc. It's nice if they communicate with you constantly too on what's going on.
In narrowing down where you are interested in buying a home, decide what is important to you. Prices as well as school districts vary from suburb to suburb as do many other factors. For us, the school districts, location, many trails/parks, wildlife, and a quiet neighborhood were important. Everyone is different so make a list of those preferable items as well as would-be-nice things but not necessary things. Location is important! You can change a million things about a house, but not where it's located. We also thought about resale value if and when we were to sell it. If you're thinking about an investment property this can be important too in the long run.
A realtor typically emails daily listings and updates from MLS online. We made a list of about 3-4 suburbs we wouldn't mind living in, and our realtor sent us listings in those areas. We would look through the info and pictures and could select certain houses to put in our favorites as those we wanted to see in person. We looked at about 16 houses total in-person. The house we bought was ironically the first house we saw. We knew it was the house because we felt at home in it. I would suggest looking at a lot of houses and different styles too in finding what you like. We prayed about it a lot too. For us, God seemed to lead us to the house and for some reason, we kept meeting random people who lived in the neighborhood or had lived in the neighborhood in the past. It helped us to confirm that this was "the one".
As far as the house itself, structure is critical (no water issues, major cracks in the foundation, etc.) Also, major mechanicals, such as electrical, furnace, air conditioning, water heater, etc. are important to look at too. With an experienced ABR, they can share any concerns they may have with the buyers.
Regarding energy and water costs - You can call Excel and get a monthly average (taken from the previous 12 months) for the property you are looking at. Very convenient when figuring out exactly how much electric and water bills will be in addition to the monthly mortage payment.
As for making an offer on a house, we've learned that usually serious offers are at least 90% of the list price. A realtor could help and advise on this as well. The realtor also will do a comparative market analysis to similar homes in the same area to see what they sold for in recent months. The realtor will help you write an offer letter and sign documents as well.
After purchasing a house, make sure to get an inspection. This is important and will help you learn a lot about the house. We called a few different inspectors that our realtor suggested and went with the cheapest one who did a fabulous job.
Purchase those winter essentials - snowblower, roof rake, and shovel. They are some of the best things we've bought for the house so far and have used them alot this winter (no ice dams so far!). Our Iowan snowblower was a great find by our friend Peter, and Matt loves using it!
Happy house hunting whether you're going about it now or will be in the future!
All good advice! ;) If you're buying you should always have a Realtor though because it costs you nothing to have someone who's got your back the transaction. And some transactions can be incredibly complex (foreclosures & short sales).
ReplyDeleteA cheap way to sell your house is to find a place that will let you list only on the Multiple Listing Service ($399) and you can sell the home yourself. Having it on the MLS gives you the most exposure you can have as it connects with every real estate website.
You'd still have to pay the buyer's agent anywhere from 2.5-3% of the purchase price. But you are the agent for your home, so you don't have to pay 3% to the seller's agent! However, if you need help with the negotiations & paperwork you can just call in an agent for facilitation (around $1000). Home Avenue offers this service in the Twin Cities. :)