It’s prime time now, because it will take a couple of months to get everything into place. Being a serious buyer simply means you’ve done your homework, aligned your credit affairs and aren’t just a casual observer when you go to an open house or showing.
The first step is knowing what you can afford, getting your credit in order.
How much house you can afford isn’t as simple as comparing a mortgage payment with the rent. Factor in things like property taxes, insurance premiums, homeowner association dues – if applicable – homeowners insurance, and a monthly home maintenance fund of 1% per year of the home’s value. Add that to the mortgage and you have a clearer idea of what you’re working within a given price range.
Make a final check of your credit to ensure there are no tweaks needed to boost the score. And don’t be surprised when lenders run another credit check. They’ll do that because there’re as many FICO scores as there are Baskin Robbins flavors and the educational credit score you get may or may not be representative of what lenders will use for your mortgage application. Odds are the score you have and the FICO used by your lender won’t be the same.
You’ll also need to spend some time finding a partner. It would be a good idea to look at Realtors who have specialized training and experience working with first-time buyers. You can window shop agents on the Web and look at their experience and training certificates. Select at least three and interview them just like you would if you were hiring an employee. Ask for and check references. You will be working closely with them and sharing a lot of personal information so there has to be a good level of trust. You’ll also want someone who comfortable communicating on your level i.e. texting, email, telephone calls or face-to-face. If you really want to weld the trust status make a commitment to your Realtor that you will work with her or him exclusively. Good agents invest a lot of time and effort that is wasted if the client suddenly calls another agent because they saw an attractive listing.
Once you have a partner and have shared your target price range, the agent can begin lining up options. This is the stage of house hunting where neighborhood preferences, schools and a multitude of likes and dislikes will be in play. Some “go” and “no-go” decisions can be made after doing some work on the Web. Prime candidates will require a showing. This is also the period when you don’t want to make any major purchases that would affect your credit score.
Discuss your down payment options with your partner and lending agents. Although 20% is the industry standard that level downpayment isn’t written in stone. In fact, 10% to 12% is closer to the local norm, and there are programs when you can get by with less.
It’s a good idea to have your downpayment in your account two to three months before a closing. That’s called “seasoning the downpayment.” Even if it’s not required there’s a comfort factor to having the downpayment and enough money for the closing sitting in an account ready to use well in advance.
Throughout the process expect the unexpected, there will be bumps in the road and maybe a detour or two. And while timing the market is impossible, being ready to make an offer before the prime selling season starts is not a bad strategy. Currently the local market is seeing record sales. During the first 10 months of the year the average home sales price across the region was up 3%. Inventory is tighter than last year, but the area is still in what’s called a “soft buyers’ market.” That simply means there are good deals out there for determined buyers.
And, while history is not a perfect guide to the future, next year may hold extra advantages for buyers since home sales are traditionally softer during a presidential election year. That means a little less competition for buyers who have done their homework, have partnered with a professional Town & Country Realtor® and are ready when opportunities present themselves.