Buyers: Credit Tips
Get your credit report so you can evaluate your options. If you have a score below 620, start repairing your issues. This is a minimum for some government backed loan programs. We have lenders that can help you work on your score. The higher your score, the better the program you may qualify for. Many buyers get a prequalification letter from the lender or better yet, a preapproval letter. Preapproval comes after a more thorough evaluation of your finances. A preapproval letter shows the seller that you are serious and can close quickly, and is often presented to a seller with an offer. Preapproval also lets you know how much house you can afford so you know what price range to shop in. We can help explain the many financing options to you.
Search listings to get an idea of local market climate. It can also be helpful to establish a baseline for monthly housing cost, taxes and homeowners insurance. Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their gross income on housing costs. Each household is different. Set a safe limit and build in a little cushion. Going much past 30% of your income and you risk becoming house poor.
Buyers: Hire an Agent
Hiring an agent can save you time and money. Agents can send you listings directly from the MLS that fit your parameters and you won’t waste time looking at listings that don’t fit your needs. They know the market and can spot overpriced listings. They will also know of new listings coming up that are not yet on the market. Finally, they will help through the process from financing to searching to home inspections to negotiations to closing. A knowledgeable agent that understands what you want and has good communication skills is a huge benefit to the entire buying process. Pick someone you enjoy working with.
Set goals with your agent so that you can be ready to negotiate once you make an offer. You will want the offer written to protect you with proper contingencies without cluttering the offer with requests the seller is unlikely to accept. Your agent can provide information for comparison purposes for other homes that have sold, but only you can determine what a property is worth to you. Be prepared with how many concessions you will accept for how much money. Respond to counteroffers quickly to keep other buyers from entering the picture; you don’t want to encourage a bidding war. It is always helpful to have a few other homes in mind for comparison purposes.