Get All the Facts!
7 Things Every Buyer Should Know Before Purchasing a Home:
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1. Now more than ever it is important for potential buyers to use an experienced real estate professional.
As of August of 2024, the National Association of Realtors (NAR) has mandated changes to the buying process. These changes include that a Buyer-Broker Service Agreement must be signed before an agent can show a property to a buyer client, and that offers of compensation to the buyer agent cannot be advertised on the Multiple Listing Service (MLS). Compensation to the buyer agent may still be advertised off of the MLS. Paying the buyer's agent a negotiable percentage has traditionally been the responsibility of the seller. The NAR settlement has made buyer's agent compensation a more visibly negotiable factor.
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2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, make sure your credit history is as clean as possible. Get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
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3. Aim for a home you can afford.
The rule of thumb is that you should buy a house that will cost about two-and-one-half times your annual salary. There are many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford. If you have a home to sell, wait to look for your next home until you have a contract on your current home. That way you will know exactly how much you have to spend on your new home.
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4. Before house hunting, get pre-approved.
Getting pre-approved will put you in a better position to make a serious offer when you do find the right house. Pre-approval from a lender is based on your actual income, debt and credit history and is a fairly simple process.
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5. Use a knowledgeable reputable mortgage lender.
Be sure to select a reputable lender that will work with you to get the best deal possible. Look for a lender who will put all costs in writing, carefully explain loan options, encourage you to ask questions, and not rush you into a quick decision.
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6. Don't buy if you plan to live in the home short term.
Purchasing a home in today's market only makes sense if the buyer plans to live in the home for at least three to five years. Those who plan on selling the property sooner might not provide the property enough time to recover the costs of buying and selling and any lost value that may have occurred in the short term. Even if a home declines in value over a short term, it can still be a good investment if you give the market enough time to recover.
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7. Before making an offer on a home examine the selling prices of similar, nearby properties.
Make sure the sales information is fresh because the market is constantly changing. For an accurate gauge of home prices in a given market, buyers should look for comparable sales data that is as recent as possible. Your opening bid should be based on the sales trend of similar homes in the neighborhood.