One of the most important pieces of the real estate transaction puzzle that will come into play even before the details of the financial transaction are defined is finding the right home. Finding the perfect home is not always an easy task. There are many things to consider when determining whether or not to make an offer on a home; 1. How many people are going to be living in the home? Is the home of interest large enough or small enough to accommodate your needs?
2. What is the tax rate in the area? Are you or the home eligible for a local state government property/school tax reduction?
3. If you have children, is the home within your preferred school district?
4. How much can you afford? Are you going to be required to pay your taxes and insurance on a monthly basis along with the principal and interest payments for your mortgage in one monthly payment?
5. Are you going to be required to pay PMI in the mortgage?
6. Is the home that you are considering priced properly according to the market? Are you being asked to overpay?
7. Is the seller reasonable and motivated to sell?
8. Are you working with a quality Realtor who will guide you in the right direction? Are all of the professionals with whom you are working ethically grounded?
9. Do you have practical expectations of what you can expect with regard to the processing of the transaction and the final results at closing?
10. Are you prepared for all of the expenses that come with homeownership that may not be reflected in the payment i.e. garbage removal, electricity, HOA dues (if any) etc…?
These 10 questions are very important questions for you to ask yourself. Sometimes the answers are easy but sometimes the complexities of each individual situation can create uncertainty. Often times you will not know all of the answers yourself and that is why it is important to deal with an ethical professional. A long standing question that people have been asking for centuries is; “What came first, the chicken or the egg?” The same question can be asked in this case; “Who should I consult with first, the Lender or the Realtor?” It’s true that you may not have all of the answers to the questions that are posed above, that’s ok because a trained professional can assist you in obtaining the answers that you need. The question is which professional should you go to first? There is no real simple answer to that question and I guess it really breaks down to which you feel more comfortable with. A Realtor typically will not go out showing properties to a prospect unless they are in position to make some kind of a reasonable assumption that you are qualified to make an offer on the home and ultimately complete the transaction. If you have the asking price stashed away in your back pocket or a bank account somewhere a Realtor could reasonably assume that you are qualified to purchase the home. If you are going to be needing financing however and you have not applied for financing the assumption that you are qualified to purchase the home is less reasonable and needs to be verified prior to a Realtor making an offer on a home on your behalf. The advantage of first consulting with your Mortgage Advisor is that you will know exactly how much of a monthly payment you can qualify for. You will also know the exact range that you can afford to shop in. Also when Realtors see you coming with a Pre-Approval letter they often times are more eager to serve you because they already know that you are qualified. On the other hand if you do not have a Mortgage Advisor often times a Realtor can refer you to an ethical lender whom he/she does regular business with. Realtors typically do repeat business with Mortgage Professionals who come through for their clients. There are pro’s and con’s that need to be considered when you are considering the first steps that need to be taken in order to secure homeownership and financing if needed. My personal opinions; if you need financing to buy a home go see a mortgage professional first. A mortgage professional will help you take some of the guess work out of the process and give you a buyer’s edge when you walk into a real estate office. Walking in with a pre-approval letter is like walking in with cash (essentially you are walking in with cash, the lenders cash). If you first consult with your Mortgage Advisor easily be able to answer the questions above and you will have more power to negotiate the price of the home. I hope that this information has been helpful to you. For more related information visit www.mortgageny.net. If you are already into the home shopping phase of the transaction visit www.mortgageny.net/homes to find a great home in your price range.