Becoming a homeowner is one of the most significant events in many people’s lives. That said, residential real estate is also one of the most competitive markets in the country. The list of houses for sale in any given area is in a constant state of flux, and finding your ideal starter home can prove taxing without some form of experience to rely on.
With that in mind, we’ve put together this guide to prepare you for the plethora of requirements innate to the home-buying process. These tips will keep you from falling victim to over-priced properties and other market hazards.
As a buyer, you need to make sure you understand what you’re bringing to the table.
First and foremost among your assets, naturally, is your budget. Unless you’re one of the rare few who’ve managed to save enough over the years to pay in full, chances are you’ll need to apply for a loan. That said, we strongly advise that you speak with a mortgage professional prior to starting that process.
Start off by visiting a local lender and getting a prequalification; this will provide you with an estimate of how much credit said lender is willing to provide. Combine that estimate with your own personal savings and you’ll have a rough idea of your housing budget. Our firm works with several local lenders that provide our clients with great service, so feel free to reach out for a recommendation if you’re stuck.
Once you’ve worked out your budget, it’s time to consider your upper and lower limits on pricing. It’s crucial that you be honest with yourself during this stage; not everything that you desire in a home may be feasible due to a variety of factors.
One of the most surefire strategies for working through this mental barrier is also quite straightforward. Create a list with two categories: must-haves, and desired traits.
Anything that you put in the must-haves category should be non-negotiable when searching the listings. For example, buyers with a hyperactive dog would most likely determine that an expansive fenced yard is a must-have (or barring that, one with close proximity to a dog park).
On the other hand, the desired traits can contain items that, while not dealbreakers, should still be taken into consideration in the decision-making process. If you’re torn between two properties that have met all of your must-haves, start going through your secondary list. How far away from work is each house? Does one have a garage? Is the community gated? These are some examples of factors that, while not dealbreakers per se, could sway you in one direction or another should a stalemate arise.
The housing market is defined by flux. Hesitate, and that ideal property you were looking at only a few days prior could get snatched up by another buyer. Commit too readily and you may get cold feet. In a market crowded with opposition on all sides, a trustworthy buyer’s agent can provide some much-needed breathing room.
If any of your friends, family or co-workers have experience with home purchases, consider asking them for recommendations in the buyer’s agent field. You can also check online reviews to get an idea of others’ prior experience with an agent in your area of choice. However you go about this search, seek out the following traits when deciding on your representative in the buying process:
- Experience: This one may go without saying, but the longer they’ve been in the game, the better. Experienced agents will know exactly what questions to ask when viewing properties, as well as how to work through otherwise-tedious tasks in a reasonable time.
- Acquainted with the Area: While there are certainly some universal tenets to home-buying, every city and state has its own identity that impacts the real estate market, directly or otherwise. As a result, an agent with in-depth knowledge of the area is crucial to your success on the market.
- Well-Connected: In order to properly represent your interests as a buyer, your agent must be capable of garnering assistance from fellows experienced in a wide variety of tasks, from lenders to home inspectors and contractors.
Searching the Area
Now that you’ve covered all your preparatory fronts, it’s time to go house hunting. Your agent should keep you in the loop regarding new listings that match your criteria and price range, but don’t be afraid to do some legwork of your own. Keep an eye out for open houses or “For Sale” signs. The more you browse, the stronger your understanding of the market will become.
Take some time to consider how much work you’re willing to put into your new property. Be sure to clarify with your agent which facilities are included in the purchase.
After browsing a variety of available properties, you’ve finally found an option that’s shaping up to be your ideal starter home. It’s all too easy to assume that, for all intents and purposes, the process ends there. Try to resist that temptation of a thought process, however; we’re not free and clear quite yet.
Once you’ve decided on a house, your agent should pull a list of comparable properties (or “comps”) that have sold recently in the area. From here, you can ascertain a reasonable first offer with which to approach negotiations. Should that offer be rejected, those comps will also help you to decide on the final price range that you’re willing to work within. This can prove invaluable during particularly intense negotiations, as it provides you with a foundation on which to build your case.
Once you and the seller have worked out a reasonable price, there are a few more steps to take before you can truly commit to a purchase: inspection. A home that, at first glance, appears to check all your boxes, may be hiding an unpleasant secret unbeknownst even to its owners.
For instance, say you noticed a crack in the exterior foundation during your walk-through, but wrote it off as negligible. A home inspector may find that said crack is a sign of extensive interior damage. Were it not for that second opinion, you could have found yourself sinking funds far beyond your budget limit into repairs down the road.
Once the home inspection has concluded and you’ve retooled your pricing accordingly, we can finally follow up on the loan you prequalified for early on in the process. When applying, you’ll want to gather any and all records that can help to establish your financial status for the lender. This can include bank statements, credit reports, and tax returns. Any form of proof you can provide to exemplify your status as a sound investment for their company will go a long way towards solidifying your loan.
If the home inspection checks out and both parties are satisfied with fiscal negotiations, closing can finally commence. The last thing either party wants at this stage is for the deal to fall through due to a records error. Consult the following checklist to make sure you’ve addressed the key points to bring this sale to its rightful conclusion:
- Down Payment: If you followed our advice and sorted everything out with your lender of choice early on, this should prove fairly straightforward. Down payments can typically be carried out through wire transfers to minimize the possibility of human error compromising the sale.
- Closing Costs: Buyers can think of closing costs as a sort of convenience fee designed to streamline the transaction. These fees cover expenses for a wide variety of tertiary services, such as loan application processing, insurance, credit verification, and so forth.
- Deed Transfer/Recording: Once everything’s been put into place, proper transfer of ownership can finally commence. Take no chances once you’ve received your title of ownership. Store the deed in a secure location and only take it out when absolutely necessary. If possible, consider having a copy made and secured in a separate, remote location like a bank. You’ll typically have to pay a minor fee for this service, but it’s well worth the cost for the extra security.
Congrats! You’re All Set!
With that, you can finally take a break and appreciate this occasion. You’re a fully-fledged homeowner, beholden to no landlords or rent deadlines! Granted, this also means that you can’t expect someone else to handle the day-to-day upkeep anymore, but think of this as an opportunity to expand your hands-on skillset (or build your connections in the service industry). If you’re still not entirely certain where to start your search in the Charlottesville area, consider getting in contact with our firm. At Denise Ramey Real Estate, we are fully equipped to guide you through each step in the process, with nearly 20 years of experience in the real estate industry to back our decision-making. Our team of realtors and buyer’s agents offers critical insight into both sides of the transaction, and will make use of that understanding to protect your interests as a buyer in every area.