Written By: Olivia Forgette
You’re ready to dive into the world of homeownership, or maybe you already own your house, but are ready to move on to a new place to call yours. Purchasing a house is a daunting, and often scary step. Preparation can make the process more seamless, even before you decide on a real estate agent and start touring properties.
Know the Housing Market
It’s important that before you start looking at properties, you understand the real estate market where you are looking to buy. This varies by location, but currently it is fairly unanimous that it is a hot seller’s market. This means homes sell quickly, and often for higher than asking price. Understanding that you need to move quickly is an important concept to be prepared for before diving into the homebuying process.
According to recent Midwestern Real Estate Data [MRED], as of February 2021 median home prices in the area are up 15 percent on an annual basis, and homes saw a two percent weekly gain in median sale prices among residential listings on the MRED marketplace.
Tip to Remember: Real estate is local. Look at your area’s MLS details to get a better idea of your specific local market.
Do Your Research
The more research you do before even taking the step to hire an agent, the better prepared you will be when the stresses of homebuying begin. A good way to understand the market specific to your location is to start looking online at listings of homes you are potentially interested in. Keep tabs on them and note how long it takes for them to go under contract. This is a great tool to be better prepared for the quick turnaround housing market you’re likely to encounter.
Know Buying a Home is a Big Deal
Whether you’re leaving a home with fond memories, or you’re searching for your first place to call your own, buying a home is a big deal. It can be an emotional experience for some. Prepare yourself for the emotions that can arise when making life’s most stressful purchase, and during the moving process. It’s easy to make decisions based on an emotional “gut feeling”, but know there are logistics that need to be considered. Having this mental preparation can make a big difference in your buying experience.
Consider Your Budget
It’s all rainbows and unicorns when looking at beautiful dream homes online, but like it or not, a huge piece to the homebuying puzzle is understanding your budget and what you can afford. Utilizing a home affordability calculator, like this one from HomeLight, or this one from Discover, can help you get a better idea of what you can afford. Try using multiple online calculators to get a better idea of what you potentially can afford. Also, be sure to check in on your credit score, do not make any large purchases prior to preapproval, and be sure to begin saving for your down payment and closing costs.
Tip to Remember: You are taking the first small steps in your big purchase. There is time to improve your credit score. Plus, you can start now to develop a savings plan for a down payment which will potentially help you get preapproved for a larger budget.
Get Mortgage Preapproval
First things first, you can, and you should shop around for a lender. Each lender can offer variations of interest rates, closing costs and terms. Request a loan estimate from each lender you are considering so you can easily compare important factors regarding your home mortgage.
Once you decide on the perfect lender for you, it is time for preapproval. The preapproval process is an in-depth look at your finances, proof of income, and credit score. Preapproval will tell you, and your agent, exactly how much you can afford. It also shows your real estate agent and sellers that you are serious about your big move.
Preapproval will also give you information about the loan type you qualify for. There are two most common kinds of loans, FHA or Conventional. It’s important to know what kind of loan you qualify for because it affects the kind of property you can purchase.
Find a Real Estate Expert
Having a real estate agent in your back pocket is an essential edge to owning your dream property. Utilizing a top agent can often save you money, time, and deliver an expertise to navigate the nuances of purchasing a home.
Agents have access to information that the public may not, meaning they can act faster than you to secure your property. Real estate experts are also professional negotiators and understand how to work through difficult roadblocks you may encounter in your buying process.
Referral Tip: If you are ready to dive into buying a home, and are in Illinois, contact top real estate agent Maureen Forgette for excellent service.
815.354.4236 | mforgette@comcast.net
Takeaway Tips
Deciding you are ready to buy a home is a huge step. Preparing yourself before you dive-in is an essential first move. Be ready to set emotions aside, get your preapproval and remember, using a top agent can make a world of difference when buying a home.
