When buying a new home, everyone has their priorities. Of course, it’s a big investment and you want to make sure that you end up with a property that’s truly yours and is a place you have always dreamed of. The home buying process tends to be a bit complex and can be time-consuming too. So, one can easily get off track, not focusing on things that matter.
If you are planning to buy a new home, here are five things you need to know before you actually get started with your home hunting process.
1. You Need To Do a Lot of Research
Whether you are a first time home buyer or you are planning to relocate to a home that better fits your needs, you have to do a lot of research. To begin with, narrow down the neighborhoods that are a good fit for you. Browse some of the popular real-estate websites and scroll through various suburb profiles to get an idea of recent sale price history.
While doing your research, you should keep in mind the features that will make your property one of the most desirable options for prospective buyers whenever you have to sell it. This could include things like:
- Future building plans available at the local council website
- School Zones
- Amenities in easy access
- The neighborhood – you can always take a drive through the neighborhood to see how lively or quiet it is at different times of the day. It’s also a good idea to talk to the locals and have a better feel of the area and the people around.
Once you have shortlisted a few properties that are an exact match for your search criteria, go through property profile reports to check the rental and sales history of the property, the prices for which similar houses in the area have been sold recently, and an estimate of the property’s worth today.
Investing your time in ample research would help ensure that you do not end up overpaying for the home of your dreams and you don’t have to settle for something which isn’t what you wanted in the first place.
It is also a good idea to talk to local Real Estate Agents and figure out the trend of the property market in that particular suburb. You are going to want to find someone who is local and knows the areas you’re looking into. For example, The BC Team in Arizona began in the Valley. Finding real estate professionals like them is the difference between trusting what you see online and trusting someone who lives in the same city.
2. A Trusted Realtor Can Protect Your Interest During Negotiations
Yes, it’s true that realtors work for a cut in the property’s sales price and that’s what makes most homebuyers hesitant to hire them. You should, however, keep in mind that it’s the seller who has to pay the commissions, not the buyer.
You also have to keep in mind that the listing agent is the seller’s representatives. Their job is to protect the seller’s interests and sell the home, not to help the buyer. It’s important that you get a savvy realtor to work for you. They’ll protect your interests throughout the home buying process; from price negotiations to navigating the home inspections, they will have your best interest in mind and won’t falter if the seller pushes back.
3. A Legit Mortgage Pre-Approval from a Lender is Always Recommended
Before you even start hunting for a home, you should always get legit pre-approval from a lender. The emphasis is on the word ‘Legit’ too, as pre-approvals aren’t always too solid when it comes to actually submitting your application.
A solid pre-approval is the one with verified documents and is not just about verbal communications. So, provide your lender with your T4 slips, employment letters, pay stubs, and the assessments notice, and get these documents verified before you even start hunting for your new home.
4. You Must Get Homeowners Insurance For The New Home
If it’s the first time you are buying a home, keep in mind that buying homeowners insurance is very important. Don’t wait to find the right home insurance policy for your new property! Most mortgage lenders will require you to get the homeowners insurance before you could close the deal. You might also have to make an upfront premium payment for the first year.
It is also important to understand what’s covered under your homeowners insurance. Even though all the policies are slightly different, but generally, home insurance provides coverage for any loss or damage involving your home, your belongings inside, as well as any outbuildings on your property. Even the injuries that might happen inside the premises of your home can be covered under your homeowners insurance.
5. Don’t Rush; Negotiate With Confidence
It’s a very common mistake for first time homebuyers to rush through their decision-making process by not negotiating enough. It’s probably your life’s biggest financial commitment and you’d never want to ruin it by making an impulse-based purchase. A real estate agent can help you a lot here, as can research into what homes in the area sold for. You’ll be armed with the knowledge of a fair market value and you should feel confident enough to fight for it.
When negotiating, keep in mind that you should consider:
- Supply & Demand
- The market price and not the asking price
- Other things to negotiate instead of just the price like negotiating terms such as:
If the seller isn’t budging and the home is too far out of your price range, remember that there is nothing wrong in walking away. You can always find other properties matching your requirements. While it’s not a great feeling, just remember that a home is an investment and you’re going to want to be able to make your money back if you do sell it in future.
If you’re feeling overwhelmed, take a deep breath. Buying your first home is a huge accomplishment and a very rewarding challenge that can seem like a never ending process. Keep these five tips in mind and keep your eyes on the prize. Good luck and let us be the first to congratulate you on your (future) new home!