5 Successful Buying Tips

Successful Buying Tips

#1 Get “Pre-Approved”, Not Just “Pre-Qualified”
When making an offer on a home you want to have the upper hand in negotiating. Keep in mind that price is not the only issue on the bargaining table.¬† Information like the reliability of the buyer to obtain financing or how much time is needed before the buyer is ready to close, is very important to a seller. For this reason, it is important that you get “pre-approved”, which is a step further than getting “pre-qualified.”

The pre-qualification process is simply giving your best estimate of your financial situation to a lender and having them make an assessment of how much you could be approved for based on that information.

Pre-approval on the other hand, occurs when your Loan Officer actually verifies the information you give them when you get pre-qualified. By doing this, unforeseen circumstances can be resolved appropriately before you make an offer on a home. At the end of this process you are actually approved for the loan.

Your Loan Officer will give you or your agent a pre-approval certificate or letter to present to the sellers. This is key in negotiating for the lowest purchase price and smoothest closing for everyone.

#2  Sell First, Then Buy
If you currently own a home and are looking to buy a new one, it is strongly recommended that you sell before you buy. If you were to find a home that you absolutely had to have, you would ideally want the seller to reduce the price AND wait to close escrow until after you have sold your home. This makes sellers very wary and they may counter your offer demanding the full price because of the contingency that you have to sell your home. Following that, you may rush to sell your home as quickly as possible; even selling it for less than you could if you weren’t in such a hurry. After selling your home and buying the other you may have lost tens of thousands of dollars!

For these reasons, it is recommended to sell before you buy. This does not mean you can’t start looking for properties, nor does it mean you can’t list your own before you have found your dream home. One trick is to make the sale of your home “subject to seller finding suitable housing.” When you do find a buyer for your home, you will have time to find a new one. If you don’t, then you don’t have to sell your current home.

#3¬† Don’t Feel Forced To Settle
Make a list of things you want your new home to have, and things you don’t want. This will help you clarify exactly what you are looking for, as well as save you time. If you are using a Real Estate Agent, be sure that you are seeing all of the homes available that meet the requirements you have set by going over the Multiple Listing printout with them.

#4 Plan For The Unexpected
When calculating how much money to save towards buying a home, always overestimate by about $1,000. There are many unexpected things that could come up between the time when the seller accepts your offer and when you close on the home. For example, inspections might point out items that need repairing, but the seller may refuse to fix them, or the cost is greater than the amount agreed upon in the contract. Perhaps interest rates change, affecting your required down payment amount and the closing costs you are responsible for.

Your Real Estate Agent and Loan Officer will do their best to avoid or prepare you for such situations to save you some heartache, but by planning to set aside some extra money ahead of time you will be less likely to be shocked or upset by any previously unforeseen changes.

#5 Trust Your Representation
There is a lot involved in buying a home and, at times, you may feel a little “lost” in the process. Remember that your Loan Officer and your Real Estate Agent, if you opt to use one, represent you and that they will do their best to make sure things go smoothly and that you are fully satisfied. Be sure to ask questions if you are unclear about any aspect of the transaction.

This list was created by Nova Home Loans

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