First Steps To Buying A Home

Organize Your Finances

Thinking of buying a home and wondering where do I start?  The first step is to deal with the financial issue. First figure out how much can you afford in a monthly mortgage payment. Although this may seem obvious it is crucial in determining where and what kind of home you will be shopping for. When doing your calculations on this remember to include taxes, homeowners insurance and any other monthly payments attached with the mortgage payment. Also it’s important to include all your expected utilities water/sewer, trash collection, plus the usual. In some cases you may want to pick a lender and get pre-qualified for a mortgage. A lender will consider your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. (Credit card debt, car payments, school loans etc.) A lender will want to know how much cash you have available for a down payment. They will most likely ask for bank statements that go back at least a month or two. If a large amount of cash suddenly on your bank statement they will want to know where the money came from. Lenders frown on borrowing money for a down payment, so be prepared to show proof of any income, inheritance, or gifts.

Make A Must Have & Wish List

Now you know what you can afford, think about how much space you need. Think about what areas of town you might want to live in. Talk to friends and family and drive through some of these neighborhoods during the day and in the evening to get a good sense of what they are like. Based on your spending range you may want to give thought to what features in a home are most important and which ones you would be willing to live without. In making this determination consider your family’s lifestyle, what kind of features fit for your family? Do you need to be close to certain schools, how far of a commute will living in a certain neighborhood involve? What kinds of amenities are you looking for in the home and neighborhood? Establish which things are essential, and which are on your ‘wish list’.

Choose an Excellent Realtor

The next step in home buying is the least talked about, and yet one of the most important, choosing an agent that will represent you. Most likely you will hear friends say they know so-and –so who can recommend an agent who was ‘OK’, just pass on these! Buying a home is one of the most important events in your life, and it can be a stressful process. Given this you want someone who is more than ‘OK’ you want someone who is excellent! So what does an excellent Realtor mean? To keep it simple here are a few pointers in what to look for in obtaining an excellent Realtor.

• A full time professional Realtor. Someone who has extensive work history in the industry. The number of years a person has been in the business does not necessarily reflect the level of service you can expect but it’s a good place to start.
• Do they have any professional awards or professional designations?
• The agent should have past clients that are able to provide a reference on their reliability. Also ask the agent to provide a list of what they've listed and sold in the last year.
• Is there a team or staff that works with them, such as a personal assistant?
• Do they have their own website with a property search feature?
• They should be very familiar with the area in which you wish to buy.
• They should be willing to show properties other than the company they work for.
• They should have the ability to negotiate effectively on your behalf. Everyone has different styles, but you don’t want an agent who is too shy to press an issue when needed.
• Your agent will want to keep in touch with you daily or weekly to tell you about properties that meet your criteria.

Here a few more tips on getting a good real estate agent to represent you.

• Check with your state's regulatory body to find out if the person is licensed and if there have been any disciplinary actions or complaints.
•  Select an agent with the right credentials. The alphabet soup after the name can be an indication that the person has taken additional classes in a certain specialty of real estate sales. Here's what some of the designations mean:

o   -- CRS (Certified Residential Specialist): Completed additional training in handling residential real estate.

o   -- ABR (Accredited Buyer's Representative): Completed additional education in representing buyers in a transaction.

o   -- SRES (Seniors Real Estate Specialist): Completed training aimed at helping buyers and sellers in the 50-plus age range.

o   If the agent calls himself a Realtor with a capital "R," that means he's a member of the National Association of Realtors.

“The most important thing is that you want an agent who formally pledges to support the code of ethics.”  -  Ron Phipps, past president of the National Association of Realtors, 2011.