Whether you’re a first-time buyer or you’re purchasing your sixth house, there is always something more to learn about buying a home.  To make the process a little simpler, use our Do’s and Don’ts list to guide you:

DO:

Getting pre-qualified is a good idea, as it gives you an idea of how much you can afford for a house.  Getting pre-approved means a lender (a bank, a mortgage company, etc) has verified your credit score and has agreed to lend you a set amount of money.  Knowing how much you can spend and knowing you have financing put you in a much better position to go house-hunting.

Never sign anything without having read the entire document.  You can ask for the paperwork in advance to give you time to read through it thoroughly.  Make copies as well.

 

Your realtor can provide a CMA to you.  This compares similar homes that have sold recently or are still on the market in the same neighborhood as the house you are interested in.  Look at the pricing the houses sold for, NOT just what they listed for. 

 

Some important factors to consider:  good schools, proximity to public transportation, convenient amenities (doctor’s offices, post office, grocery store, etc.), clean air/water/soil, low noise pollution, low crime. Even if some of these factors do not affect or relate to your household, they are all important in housing value. 

 

You might only need 2 bedrooms now, but what about in a few years?  Will you need a large kitchen, more bedrooms, a basement?  Conversely, do you really need a swimming pool or a home office?  It’s not worth it to pay for extras you want but might not need, but it is usually worth it to pay for things like renovated basements and extra bedrooms.

 

Make sure to find a reputable inspection company that will give you a report that identifies present and possible future problem areas in the home.  They will most likely also give you suggestions on how to fix these problems and a cost estimate.  An appraisal may be required by your lender.  Both an inspection and an appraisal commonly cost between $200 and $500 each.

 

Written agreements trump verbal agreements.   

 

 

DON’T:

Use your friends and family for advice and information.  Make sure you have a reputable lender and insurer.  If you have a real estate broker, use their wealth of knowledge to your advantage; same for an appraiser and an inspector. 

 

You have these three options as contingencies:  mortgage financing, inspection and insurance.  Protect yourself by using at least two of these in your offer.

 

Just because you qualified for a certain loan amount does not mean you have to get a house for that much.  Think about your monthly costs (food, transportation, savings, debt payoff, etc).  Then add the monthly loan payment to that.  Don’t forget about closing costs, redecorating, moving…Budget accordingly.

 

Just because you’re house is more money does not mean it will automatically resale for more money.  The lower value of your neighbors’ homes will weaken the value of your home. 

 

It may be pretty on the inside, but those decorations aren’t going to be there when you move, and what will you be left with?  Don’t be overly swayed with superficial décor, as the real basics are what add value to your home:  a solid structure, a roof and basement that don’t leak, no signs of vermin or bugs, no signs of mold or water damage, and working heating/electrical/plumbing systems.