Don’t let the lure of a buyer’s market cause you to act haphazardly.

In most areas of the country, it’s still a buyer’s market. This means that first time homebuyers are at an advantage and can often get a bigger home with more of the items on their want list for their money than they could in a market with more buyers than sellers. However, just because you’re on the better end of the process doesn’t mean that you should approach buying your first home haphazardly. Here are some tips to help you along the home buying process. 

1. Get your finances in order.

Before you ever step foot in a prospective home, you should make sure that your credit is in order and that you’re able to secure a loan. Pre-approval for a mortgage amount will not only signal sellers that you’re a serious buyer and make them more apt to negotiate with you, it will also help you get an idea of what types of property you’ll be able to afford. Do crunch the numbers on your own and figure out how much mortgage you feel comfortable paying.

If you find that your credit isn’t ideal, then take a few months to pay down your debts before you start the pre-approval process with your lender. Never make big ticket purchases when your trying to get your credit in order, and remember that big ticket purchases and job changes are two areas that will ultimately affect your pre-approval since most lenders will do another check on these areas right before closing.

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2. Do some research.

Check out the area you plan to buy in, which includes MSL listings, newspaper and flyer listings, by owner listings, and so forth. Ask your real estate agent for a list of comps in the area you’re looking at, including how long each property was on the market and the reflections for price reductions. This will give you an idea of what the price range for the area is and how willing sellers in the area are to get their property sold. If houses in your desired area are selling slow and/or at hefty price reductions, then you have a better probability of success when you find a home in the area and start the negotiating process. Another sign to look for is whether or not the house is empty. An empty home may signal that the seller is carrying two mortgages…and would be more eager to get their old home sold. Certainly, you don’t want to lowball a seller, but motivated sellers may be willing to make modest price reductions, cover part to all of the closing costs, and even throw in appliances or furniture that you’d like to include with the purchase.
 
3. Don’t forget about realtor negotiations.

Realtors working in areas with a slow market are often more eager than the buyer and seller combined to get a home bought and sold. The agent, or agent’s firm, may be willing to decrease what they get out of the sale. A motivated agent will usually be willing to decrease their commission by one to four percentage points if it means the difference between you buying a home or not.  In the rare case that the realtor is representing both you and the seller, then they may even be willing to decrease their commission on both sides of the deal.

4. Line up insurance and inspections.

Never buy a home without a complete, professional home inspection. If a seller objects, then the home most likely has major, costly problems that you don’t want to deal with anyway. You’ll want to have a professional home inspector lined up in case you need to act quickly on a property. It’s also a good idea to contact your insurance agent to determine if there will be any additional insurance costs for the area, such as mandatory flood insurance.

5. Don’t buy a home without checking the title.

A lot of buyers get themselves in trouble by being eager to get the home of their dreams and not taking the time to make sure it will actually be clear. The last thing you want is to find out that a contractor or lender has a lien against the property that you’d be responsible to absorb. So, check to make sure that the property doesn’t have any liens against it by asking your legal representative for the purchase to do a title search on the property. This should be something that your lender requires for your mortgage closing, but you need to personally ensure that it happens.