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READY TO OWN ?
When it comes to buying Real
Estate, proper preparation is one of the keys to success.
- Don't want to find yourself in a neighborhood
you dislike?
- Don't want to be making mortgage payments on a house you are uncomfortable with?
- Don't
want to waste your time falling in love with houses you can't
afford?
In a word, prepare!
One of your most important tasks
will be determining your needs. It can help to avoid either a
nasty disappointment or the pain of buying more house than you need (or can
afford). Distinguishing needs from wants will go a long way in preventing
expensive mistakes in the house buying process. Establish some basic
parameters and stick to them.
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How Much House Can You Afford?
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What you can buy depends on:
- How
much cash you have for a down payment and closing costs
- How
much money a mortgage lender is willing to provide as a loan
- How
much you can comfortably handle in monthly payments
It
would be a very
wise idea before you start looking for a house to consult with you financial
advisor to check how much you can afford.
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Where do you want to live?
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Everyone wants to buy homes in neighborhoods with:
Most buyers know where they want to buy a house, mainly close to work, friends, family and good recreation.
- Good school districts (even if there are no
children, good schools mean high resale values.)
- Low to zero crime rates
- Rising
property values
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How Much Will The Bank Give You?
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Get pre-approved for a mortgage loan at the
start of your search for a home.
Most first time home buyers want to
look at homes... they often shop for a mortgage loan only after
they've fallen in love with a particular house. Don't make that mistake!
Get Pre-Approved or Pre-Qualified
.
Pre-Approved - A lending
institution has processed your loan application and approved a specific mortgage
amount.
Pre-Qualified - An unofficial
estimate of the home you can afford (a "pre-qualified buyer" is one who should
be able to get a mortgage big enough to purchase the home he or she wants to
buy).
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Selecting a House?
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Start with the basics:
- Consider the purchase price
- The value of an
inexpensive home is pulled up by more expensive homes around it. In a
neighborhood of $200,000 homes, a $150,000 home is a bargain even if
it needs $25,000 in improvements. In other words, buy the cheapest
house on the block.
- Property of higher
value is pulled down by lower priced property. A $200,000 house will
be hard to re-sell on a block where the other homes are selling for
$175,000. Never buy the most expensive house on the block.
- Buy a home that can be sold at a profit
- Find
knowledgeable and honest real estate agent who is familiar with your
target neighborhoods
- Work with your agent to find the
perfect house.
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Negotiate a Price
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Ok you found the house that you like, now:
- Evaluate the
Seller's asking price.
- Ask your agent to
prepare a Comparable Market Analysis (CMA) to review neighborhood
selling prices.
- Consider other
negotiating points.
- Decide how much to
offer and on what terms.
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Congratulations
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