Carlsbad Buyers – How's Your 2020 Vision?
This is not about your eyesight in the home-buying process. Not that good eyesight isn’t nice to have, and helpful when looking at houses, perusing listings online, and reading through all the paperwork once you are in a transaction.
This is about having a vision for your home purchase in 2020,
if buying a house is your intent.
Going about your purchase without a plan, and a vision of what you hope to have, is pretty foolish and likely to lead to frustrations and wasted time, not to mention possible failure. And it might be an indicator you are not yet really serious…and buying a house costing hundreds of thousands of dollars IS serious business.
2020 is about here and if your plan is to buy a new home, it’s not too soon to get started. Be sure to check out my home buyer resources for 2020, too.
Here are some thoughts:
FIGURE OUT WHAT YOU NEED IN YOUR HOME
Whether you have bought a home before or are a first timer, you likely have some ideas of the features you need. This is not about what you would like to have – every home buyer has a wish list but so often it’s not realistic – but understanding what you need for your personal situation is essential.
That’s not to say you shouldn’t dream and have a list of features you would love to have. But it’s important to understand what is not negotiable, say 3 bedrooms and 1.5 baths, because you may need to give up some of that wish list in order to get that you truly need, and that fits your budget (more on that later). And are there any deal killers for you?
Consider the community and local neighborhood, too. It’s not just about the house itself. What about a particular school? Proximity to a job? What are the lifestyle issues that are really important to you and others, like a nearby park, shopping that is close, and so on.
It’s tough to go house hunting if you don’t know what it is you are hunting for. Which brings us to the next point…
TALK TO A LENDER AND GET PRE-APPROVED
Unless you are a cash buyer, have generous parents or other family members, or lucked out with a trust fund or inheritance, you’ll need a mortgage to buy your home…most buyers do.
First, you must find out if you qualify for a mortgage, and if so for how much. There’s a cost to that loan and you need to know what that cost is (e.g., interest, fees, etc.).
You will also need some sort of down payment; many buyers believe this must be 20%. That is simply not the case and there are a variety of programs available, depending on the lender.
You should also understand your personal budget as it compares to the amount the bank says you qualify for. Don’t get overly excited about how much the bank will loan you without looking at the monthly payment versus your personal budget.
It's essential to feel comfortable with your monthly payment and not max out your housing budget. It’s important to be prepared for emergencies, plus you will need money to pay your bills and enjoy your lifestyle, too.
HIRE A QUALIFIED REALTOR® EARLY ON
While the Internet offers a wealth of information, there are plenty of gaps, discrepancies, contradictions, and enough stuff to confuse even the most savvy buyer. A licensed professional at your side from the beginning can answer questions, educate you, guide you through the purchase process, and help find solutions to problems that may arise.
And perhaps help with a reality check to get your vision in line with your budget and the inventory available to you.
Buying a home is a huge deal and you need someone in your corner, watching out for your best interests, financial and otherwise. The Internet isn’t going to do that for you, nor can your best friend, or the agent who is working on behalf of the sellers. Why do you think the seller has a contract with a listing agent?
The REALTOR® working alongside you is like having an attorney protecting you in a legal matter. While your agent is NOT, and cannot act as, an attorney, the roles are similar.
UNDERSTAND THE LOCAL MARKET CONDITIONS
While there is no crystal ball for the housing market to tell you exactly where things will be in the future, it’s important to understand the current local market conditions.
As we say in the business “Real estate is local”. The local market conditions affect you in significant ways – the inventory available in your price range, the competition from other buyers interested in the same price range and properties you are, sales prices versus list prices, the strategy we will use when making your offer, negotiations with the seller, and more.
As part of your 2020 vision you will want to do your research on the housing market, and looking at homes will enable you to better understand what is going on as well as help narrow down your list of what’s really important, and what features are realistic for your budget. You should watch what’s selling and how quickly, and for what price to learn about the market.
But the best source of the true nature of the local housing market conditions and how they affect you is your REALTOR®. Not the media, your best friend, your family or your neighbors. Getting educated should be a big part of your 2020 vision!
KNOW YOUR FINANCIALS
Your 2020 vision will become clearer when you understand the financials of your home purchase.
Of course the purchase price is the main financial issue in your home purchase, and we’ve already talked about the importance of getting pre-approved and understanding the costs associated with a loan.
Here’s where your financial situation will really speak loud and clear, since the lender will look at your income, debts, assets and credit to determine what you qualify to borrow. If you are not in a good position financially because of credit issues or debt you may be limited in what you can quality for, and may first need to work on fixing your credit.
Some buyers do not plan for the closing costs in a real estate transaction, and first time buyers may not even be aware of them. Closing costs vary depending on the purchase price, the particular loan you are getting, the fees charged by the lender, any required pre-paid interest and property taxes, and other possible fees. These fees will be paid at the time of closing. You can read more about closing costs here.
As you look ahead to your purchase you will want to think about other costs as well! Once you own your home there will be annual property taxes (these are paid semi-annually in California and likely will be part of your monthly mortgage payment), HOA fees (if applicable), home owner’s insurance, maintenance and repair costs, utilities (e.g., gas, electric, water, sewer, trash removal), and furniture and supplies for your home. And every homeowner knows there are emergencies that crop up when you least expect them!
LOOKING AHEAD TO 2020 WITH THE RIGHT ATTITUDE
Buying a home is a complex process, and you may be surprised at how much time and thought it takes, especially if this is your first home.
You need to have an attitude of commitment – to research, to ask questions, to get financially prepared, and to spend the necessary time to look at homes and neighborhoods. Buyers sometimes say that house hunting is like having a second full-time job. You will need to treat it seriously.
In your 2020 vision you might have quite a dream about what you are going to buy…remember the discussion about needs versus wants? But you need to be realistic as you explore the housing inventory that works for your needs and budget. It’s reasonable to expect there will be trade-offs, and you may find things you are not in love with. But keep your vision in mind – buying a new or first home!
Be excited! This will be fun time, but not without some anxiety and nerves…it should be, because it’s a big deal.
Stay positive and keep that 2020 vision in mind! In this competitive market it may take time to find the right home. And depending on the inventory and price range you may compete with other buyers a few times before you succeed. Keeping a positive attitude, even with occasional ups and downs, will help. Your REALTOR® can help with this, trust me.
Ready, set, go!! Good luck with your 2020 vision! I'm here to help in Carlsbad and surrounding communities - reach out to me at 760-840-1360
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