Most of us will only buy a home once or twice in our lives. You may trade your car every five years or move apartments a dozen times in your twenties, but buying a home is the sort of thing where you don’t get a lot of opportunities to become experienced at it.
In place of personal experience, here are a few tips you’ll want to take to heart, courtesy of Kevin Seawright before you hit the market.
1. Know Your Credit Score
The better your credit, the better your options when it comes to finding a mortgage lender.
Credit isn’t the only consideration, of course. Lenders are also looking at your debt-to-income ratio, they’re looking at your payment patterns, total debt, and several other factors. The formula used to determine eligibility will vary from lender to lender.
But a credit score is going to be a key factor. If you know where you stand before you start applying, you’ll be in a better position to know what to expect, or even if you should work on restoring your credit before applying for a mortgage loan.
2. Choose The Right Agent
Kevin Seawright says that while you don’t have any experience buying a home. A good real estate agent does. That’s why they’re an invaluable asset.
It’s important to be pragmatic when selecting a real estate agent. You may have a cousin who’s getting into the business, and you’d love to help them out. But we’re talking about a house, here.
According to the National Association of Realtors (NAR) Q3 2019 report, median prices range from $123,300 to $472,100. It would be a very expensive favor to hire a friend or family member to handle that for you.
To identify a good real estate agent you’ll want to check the reviews and see how many deals they close each year. According to the NAR, a typical real estate agent closes twelve sales a year. More is better, less is worrying.
3. Buy For Less Than You’re Approved For
You want some breathing room. When you were renting, replacing an A/C unit was your landlord’s problem. Fixing a leaky pipe was your landlord’s problem. Liability insurance was your landlord’s problem. Now those expenses come out of your own pockets. You don’t want to make a late mortgage payment because you had to replace a window.
Real estate investor Josh Altman recommends buying “the cheapest house on the best block.” You will reap the benefits of buying into a good neighborhood, but with mortgage payments that you can afford without overextending your budget.
4. Invest In A Home Warranty Package
Whatever hidden expenses you may be prepared to cover for repairs and fixes around the house, chances are you’re not as prepared as you think you are. A home warranty package will help you to cover those costs without having to rack up credit card debt or pay your home insurance premium just for a few simple repairs.
Talk to your real estate agent about getting a home warranty package, and check the reviews for each provider on sites like the Better Business Bureau and Consumer Advocates. You may be surprised at just how much protection you can get for your dollar if you know how to shop around.
Buying a home can be very stressful on the business side. There are so many ducks that you need to get all in a row before you can just go ahead and sign on the dotted line.
So to make the experience a little less exhausting, take time to relax, and focus on some of the fun parts of homeownership. Browse paint samples and furniture, consider what you want to do with the lawn and the backyard. Take a moment to have a celebratory drink at each step of the process.
Kevin Seawright says that yes, there are a lot of headaches when it comes to homeownership, but it’s not all headaches. There’s also a lot of fun to be had. So if you find that you’re ready to tear your hair out, take a step away from the paperwork for a moment and relax.
Unless you make a living investing in real estate, chances are you’re not going to wind up buying enough homes in your life that you’ll ever become an old pro at it. Unfortunately, some sellers prey on that lack of experience. So take the time to read up, lean on the expertise of your agent, and try to get the most out of the experience.