When it comes to shopping for a home, you can do a number of things in advance that will make the process for you and your Realtor far more productive and positive. Here are some ideas that come from years of watching from the sidelines and hearing of the positive and negative observations from my clients.
- Know your budget. During our discussions, I’ll ask you what your “pain threshold” is – that is, the most you want to spend on a monthly basis before you’ll hate me and your mortgage payment. That will allow me to qualify you for the right amount and give you an idea what range you should be shopping in. The point here is that you don’t want your Realtor showing you homes that will be more than you can afford – that’s frustrating for you and your Realtor.Tip: Every town and every home has different property taxes so I can’t tell you exactly what price you can shop for. Use my Payment Calculator to qualify homes that you are interested in so that you know whether it’s affordable in advance.
- Know what you want in a home. Take the time to introspect and identify the things that are most important to you. You’ll find that the “Home Search Checklist” in this section will help you organize your thoughts and provide your Realtor with a clear picture of what you want. You’ll also want to identify which towns you want to consider (I do recommend that you have an open dialogue about alternative communities that may present you with more opportunities to find the perfect home for you).
- Be patient. Finding the perfect home takes time. The great thing is that the market is constantly changing, with new inventory coming on every day. And, if you really feel stuck, revisit your “Home Search Checklist” to see whether tweaking this might open up some new possibilities. Last, one of the ways to open up more properties for your consideration is to investigate one of the Renovation Loan programs (FHA 203k or Fannie Mae HomeStyle) which allow you to transform a home into exactly what you want.
- Be realistic. Everyone loves a bargain and, having been through the Great Recession of 2008 – 2012, we’ve all been told that it’s a buyer’s market. I’m not convinced that that’s so true anymore, especially in desirable areas and areas where employment remains strong. The point I want to make here is that the most of the homes you see listed for sale had a market analysis performed by a professional Realtor. It’s true that you don’t get what you don’t ask for and that causes some properties to be listed above their real market value but don’t expect that you can throw a low-ball offer to a seller and have them respond. In my experience, most deals close somewhere between 90% and 95% of the listing price.
- Short-sales. Short-sales are the ever-popular bargain-aisle specials of real estate. And who doesn’t love a bargain? The seller is upside-down and needs/wants/decides to move on. Likely he or she has already “notified” their lender of their need for special assistance by making a late payment… or two… or three. And, the lender, ever-eager to avoid the legal morass and expenses of a foreclosure (they take, on average, over 600-days in CT) and, thus, the more orderly process of a short-sale should seem the more attractive fork in the road.Except it ain’t necessarily so. For a whole host of reasons, starting with the fiduciary duty that the servicer has to the investors in the mortgage pool that owns the seller’s mortgage, the process is tedious, rule-bound, and as transparent as concrete. And, as a buyer, you get not one shred of information about the seller’s lender’s review of your offer. The point here is that purchasing a short-sale requires some extra fortitude and patience for a buyer.