4 Questions to Ask Before Buying a Home
What do I want?
Take the time to figure out what type of property you want to buy. From single-family and multi-family homes to condos and co-ops, there are many different options on the market and it’s important to choose the type that best fits your needs. Figuring out the town or neighborhood you want to live in is equally important. While a property might have all of the amenities you’re looking for, factors like crime rate and proximity to highways can impact the overall home-owning experience. A good idea is to list out and prioritize your needs (e.g. large backyard, great school system) before you begin your search.
What can I afford?
The rule of thumb is that you should never spend more than 30% of your monthly income on a mortgage payment. An alternate rule states that you can afford to buy a property that runs about two-and-a-half times your annual salary. For a more tailored look at what you can afford, use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today. But keep in mind that talking to a good lender is the best way to understand your purchasing power.
Am I financially prepared?
A few months before you start searching for a home, review your credit history and make sure it is in good standing. Get copies of your credit report, ensure that it’s accurate, and fix any issues you discover. It’s likely that you’ll also want to get pre-approved for a home loan, which will put you in a better position to make a serious offer once you find the right property. Pre-approval from a lender is based on your credit history, debt, and income. And, we will have to have this letter prior to making an offer. In today’s market, things move fast so have it ready!
How do I make the best bid possible?
We research! As your Realtor and partner, we will look closely at comparables and more than just price per square foot. Your opening bid should be based on the sales trends of similar homes in the area. So before making your opening bid, we will review the selling prices of comparable properties and look at the market trends to include whether it’s a sellers market or buyers market.
