Being a homeowner is one of the most significant milestones in life. Therefore, realtors, together with home buyers, must know the essential tips in buying homes. While this can be a stressful process, the decision to buy a house can be made much easier by working together. Keep reading and know how to prepare home buyers for buying homes!
Tip 1: Check the home buyers' financial preparedness
The home buyer's financial capacity will tell a buyer's eligibility to own a house - and apply for a mortgage. Financial preparedness is usually the initial requirement every lender, homeowner, and the bank looks for.
Check the credit
The first thing to do before deciding to buy a house is to check buyers credit reports and scores. Home buyers should know if there are errors in their credit report to increase their credit score - which will take time but is necessary.
Remember, the credit report and score will affect a buyer's qualification for a mortgage loan. The higher the score, the lower the rate becomes.
Tip 2: Help buyers know the house their budget can afford
Remind buyers that there is always the right time to buy a house - and the right house to buy. Buying a home outside of budget causes more stress than necessary and often results in unhappy or disappointed homeowners. The more money left over in a budget, the more money can be used for repairs! As a result, home buyers must know how to choose the best house within their budget.
Show buyers homes similar in value to their budget so that they have a realistic expectation when it's time to go house hunting.
Tip 3: Save money for a down payment and closing costs
Yes, mortgage loans are there to cover the expenses of buying a house. However, it's still vital to prepare on-hand money for the down payment and closing costs.
Remind home buyers that the higher their down payment, the lower their monthly mortgage payments would be. Furthermore, they should prepare for the closing costs too. Such costs will come from the processing and securing of the loan.
Tip 4: Remind them to get pre-qualified and pre-approved for a loan
Pre-qualified and pre-approved loans may sound similar but don't tangle them up:
Pre-qualification
It is the initial screening of a lender to the home buyer. Pre-qualification is a step where mortgage lenders decide whether to grant the buyer the loan.
Moreover, lenders check the buyer's capacity through the basic financial information a buyer has given.
Pre-approval
It requires a mortgage application and other documents like:
- Tax returns
- Paycheck stubs
- Financial statements
- Credit check
While pre-approval is the most crucial step in buying homes, it does not guarantee house financing. Instead, it only tells that a buyer is more likely to get approved.
Tip 5: Help home buyers list their priorities and expectations
Once everything is settled in financial preparedness, tell home buyers they should know their priorities and expectations.
- Home type - single-family house, multifamily house, condo, or townhouse?
- Lot size - how much the buyer needs and wants?
- House size - expected house square footage.
- Bedrooms and bathrooms - how many bathrooms? Is it per room? How many rooms?
- Location - choose neighborhood according to lifestyle.
The agent's role:
While realtors send listings to home buyers, they should still teach home buyers to look for houses themselves. Knowing the desired home is essential because it will help buyers assess their needs.
For example, they can ask themselves what home do they need. As a result, they can also figure out what are the things they can sacrifice. Not only that, but home buyers can also determine what things are essential for them.
Tip 6: Prepare home buyers for a home inspection
If a home buyer already made an offer, the next thing to do is a home inspection. Therefore, home buyers can prepare for renovations and repairs. It will help them find the best home at the best value and worth.
Tip 7: Teach them the importance of home appraisal
Most mortgage lenders would require a house to be appraised. If a home is appraised, the home's estimated worth would be according to market trends and comparable sales in the area.
Final thoughts
Home buying is a confusing yet exciting process. There is always a lot to prepare, especially in the financial aspect. Always remember that buying homes should start in placing the finances in order.
Finally, home buyers must always have their documents ready for a pre-approved mortgage loan. Once everything's prepared, get ready to move!
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