Sharon Simmons' Blog
Confidence can play a major role in the homebuying journey. If a homebuyer is confident in his or her ability to evaluate a house, this individual may be better equipped than others to complete a successful home purchase. Conversely, a homebuyer who lacks confidence may struggle to identify his or her ideal residence, resulting in a long, arduous homebuying journey.
Becoming a confident homebuyer may be easier than you think. In fact, there are several key attributes of successful homebuyers, and these traits include:
A confident homebuyer makes the most of the time and resources at his or her disposal. By doing so, this buyer can identify housing market patterns and trends and map out a successful homebuying journey.
Typically, a confident homebuyer performs deep real estate market data analysis. By obtaining comprehensive housing market insights, this buyer can take an informed approach to purchasing a residence.
A confident homebuyer is willing to do what it takes to acquire a home. As such, he or she will take a conscientious approach to the homebuying journey, as well as ensures that both a buyer and seller can achieve the optimal results.
For example, a confident homebuyer may be willing to negotiate with a seller to determine a price that works for both sides. This buyer also may make sacrifices along the way to guarantee a home sale is a seamless transaction for all parties involved.
A confident homebuyer has a no-quit attitude and will go above and beyond the call of duty to purchase a terrific house at a price that fits within his or her budget. Therefore, this buyer displays persistence throughout the homebuying journey.
With a persistent attitude, a homebuyer can boost the likelihood of discovering his or her dream house. This buyer will keep track of new houses in cities and towns where he or she would like to live. And if the right home becomes available, this buyer won't hesitate to submit a competitive offer on it, either.
When it comes to buying a house, it helps to enter the real estate market with plenty of confidence. If you consult with a real estate agent, you can build your homebuying confidence in no time at all.
Oftentimes, a real estate agent will meet with a homebuyer and learn about this individual's goals. A real estate agent then will help a buyer plan for the homebuying cycle, ensuring he or she is fully supported at each stage of this process.
A real estate agent also is an expert resource to a homebuyer. And if a homebuyer has any questions throughout the homebuying journey, a real estate agent is happy to provide responses.
For those who are ready to pursue their dream home, it helps to become a confident homebuyer. If you collaborate with a real estate agent, you can enter the real estate market with the confidence that you need to thrive.
If you want to buy your dream house in the near future, you likely will need to put together a competitive offer to purchase. That way, you can boost the likelihood of receiving an immediate "Yes" from a property seller after you submit your homebuying proposal.
Ultimately, it helps to know what differentiates a competitive homebuying proposal from a lowball one. If a homebuyer understands what to offer for a residence, he or she should have no trouble purchasing the right residence at the right price.
To better understand how to acquire your dream house at the lowest-possible price, let's take a look at three tips to help you determine what to offer for a residence.
1. Study the Housing Market Closely
The housing market experiences ebbs and flows. Therefore, a real estate sector that favors homebuyers one day may favor home sellers the next. And if you fail to learn about the current state of the real estate market, you may struggle to put together a competitive offer to purchase your ideal residence.
Analyze the prices of available houses in your area, the prices of recently sold houses in your preferred cities and towns and other housing market data. With this information in hand, you can find out whether you're operating in a buyer's or seller's market. Then, you can craft an offer to purchase your dream residence that accounts for the present state of the real estate market.
2. Weigh the Pros and Cons of Your Dream Home
No house is perfect, and even your dream home may have its fair share of flaws. Fortunately, a homebuyer who assesses the pros and cons of a house may be better equipped than ever before to submit a competitive offer to purchase this residence.
If you view a house multiple times, you can learn about all aspects of this home and assess any property damage. After you obtain these home insights, you can create a competitive offer to purchase that accounts for the house's current condition.
3. Collaborate with a Real Estate Agent
When it comes to purchasing a house at a price that matches your expectations, it generally is beneficial to work with a real estate agent. This housing market professional will do everything possible to help you buy your dream home at a price that fits your budget.
A real estate agent understands the ins and outs of the real estate sector and can help you map out a successful homebuying strategy. He or she first will offer insights into available homes in your preferred cities and towns. Next, when you find your dream residence, a real estate agent will help you craft a competitive homebuying proposal. And if your offer to purchase is accepted, a real estate agent will make it easy to navigate the final steps of the homebuying journey.
Ready to streamline your quest for your ideal house? Use the aforementioned tips, and you can improve your chances of acquiring your dream home at a price that you can afford.
Many home buyers have lots of questions as they go through the buying process, especially first-time buyers. Whether you’re looking for a $50,000 house or a multi-million dollar luxury home, the questions are often the same.
How Much House Can I Afford?
Lenders use several factors in determining whether to loan you money, including your credit score, loan-to-value and debt-to-income. If you are self-employed, you could make $400,000 per year and still not afford a $150,000 home. Lenders look at your income, and if you are self-employed like many luxury home buyers, you use tax deductions and expenses to your benefit. However, doing that lowers your adjusted net income. If your adjusted net income plus depreciation doesn’t meet the debt-to-income bar for the lender, you won’t qualify for the loan. People in this situation need to find a lender who will lend based on bank statements instead of tax returns.
How Convenient Is This Location?
Luxury home buyers often have location concerns. You travel more and have more people — friends and relatives — visit. That means you need a home location that is convenient for travel. If travel convenience is a concern, ask your real estate agent about the distance to the airport, the ability to rent limos, and other travel concerns.
How Much Down Payment Do I Need?
Most loans require 20 percent down if you do not want to pay private mortgage insurance (PMI). However, if you are buying a multi-million dollar luxury home, that might be difficult if you don’t have liquid assets. Before you start looking, get a pre-approval from a jumbo lender, including the amount the lender requires with and without PMI. You can adjust the amount you are willing to spend or take the time to liquidate assets to get the down payment if you have your heart set on a home that requires a high down payment.
What Does My Credit Score Need to Be?
Conventional loans have a cap, which changes depending on your location and whether the Federal Housing Finance Agency (FHFA) increases that cap. If your mortgage is going to be higher than that cap, you will need to take out a jumbo loan unless you put enough down so that you are financing an amount below the cap. When you take out a jumbo loan, you are at a higher risk to the lender, so you have to jump through more hoops, including having a higher credit score.
If you are applying for a conventional loan, especially a loan backed by the VA, Fannie Mae or Freddy Mac, your credit score could be as low as 500. However, with a jumbo loan, your score must be at least 680. Some jumbo lenders require scores as high as 720.
Few things are more exciting than buying a house and making it your home. Knowing when it’s the right time to buy derives from your personal circumstances, but some external elements and market realities affect when it’s right to buy too.
Here are some of the things that can affect your decision to purchase a home, and the timing to do it.
- Interest rates. Right now, interest rates are low, making housing affordable. Keeping an eye on rates can save you money. You can get pre-approval for a mortgage that locks in a low rate, so check out the programs offered by various lenders to see which one has the most useful option for you.
- Inventory levels. Listed homes in your area that fit your budget, and your criteria, ebb and flow. Develop a relationship with a qualified real estate market specialist to keep tabs on inventory levels, so you know when to buy.
- Increased prices. Supply and demand drive up prices, so if prices begin to increase it may be time to step into the market. Again, your real estate agent can keep you apprised of price fluctuations in the market.
- Income levels. You might simply be waiting for a promised raise or that bonus to plump up your down-payment cache. When that’s the case, notify your agent of your expectation and the timing so that they begin looking for you just ahead of when you’re ready to make the purchase.
- Income tax refunds. Although using the IRS as a savings account is a poor financial strategy, sometimes, you end up with a bigger refund than you’d anticipated. When that happens, and you receive the extra funds, it might be time to make homeownership a reality.
- Investments. When an investment gives you an unexpected return, it might be time to reinvest it into a home.
If any of these are true, you may be financially ready. When making any financial decision—especially huge ones such as buying a home—it's essential to contemplate the reason behind your decision. What do you believe a home provides you? How does it fit into your future goals? Are you willing to tie up your funds in a non-liquid investment? Are you prepared to handle the maintenance? Do you have time for upkeep?
When you feel positive about your answers, reach out to your agent for advice, and to start looking for your new home.
For those who want to simplify the homebuying process, crafting a budget is ideal. Because if you tailor your house search to your finances, you can eliminate the risk of spending beyond your means to acquire your dream residence.
Now, let's take a look at three tips to help you budget for the homebuying journey.
1. Analyze Your Financial Situation
Request a copy of your credit report – you'll be glad you did. You are eligible to receive a free copy of your credit report annually from each of the three credit reporting bureaus (Equifax, Experian and TransUnion). Once you have your credit report, you can assess your credit score and take steps to improve it as needed.
Getting your credit report can help you identify outstanding debt and other financial issues that may make it tough to acquire a house. If you can correct these issues today, you can eliminate the risk that they could impact your ability to buy your dream residence in the near future.
2. Consider Your Homebuying Expenses
The price of a home is one of many financial considerations that a buyer will need to evaluate during the property buying journey. Fortunately, if you map out your homebuying expenses, you can ensure that you'll have the finances available to cover these costs as you pursue your dream home.
For example, a property inspection may be used to assess a house's condition before you finalize a home purchase. This inspection will require you to hire a professional home inspector, so you will need to make sure you have the money available to cover the cost of this homebuying expense.
You should consider home closing costs as well. And if you start saving for home closing fees and other homebuying expenses, you won't have to worry about scrambling to get the money to cover these costs as you navigate the property buying journey.
3. Get Pre-Approved for a Mortgage
Pre-approval for a mortgage is a must, regardless of your homebuying goals. If you meet with a variety of banks and credit unions, you can analyze your home financing options and select a mortgage that suits you perfectly.
Banks and credit unions are happy to teach you about different types of mortgages and how each type of mortgage works. Plus, if you have any mortgage questions, banks and credit unions are ready to respond to your queries right away.
As you prepare to pursue your dream house, you also may want to hire a real estate agent. In addition to helping you streamline your search for your ideal residence, a real estate agent can put you in touch with the top mortgage professionals in your area, help you plan ahead for various homebuying expenses and much more.
If you want to conduct a successful home search, it may be a good idea to prepare a homebuying budget. Thanks to the aforementioned tips, you can craft a homebuying budget so you can accelerate the process of acquiring your dream house.