If buying a home in 2014 is one of your New Year’s resolutions (or one of your spouses’), here’s some help in getting started in the process to keep it as streamlined, productive, and stress-free as possible.
First, choose your neighborhoods
Deciding what’s important to you will help you narrow down the municipalities in which you would like to search for a home. Make a list with two sections: one section with things that you must have and you can’t live without — these things are not-negotiable — and a second section with things that you would really like but don’t necessarily have to have. We find that a lot of buyers think of the following when making this “need/want” list:
- number of bedrooms
- number of bathrooms
- number of parking/garage spaces
- (if you are buying a condominium) pet-friendliness (there are always rules about pets but some are more restrictive than others)
- amenities serving the neighborhood (pools, tennis courts, golf courses, playgrounds, walking paths)
- distance/travel time for commute to work
- distance/travel time for drive to schools/shopping/recreation/transportation
- reputation of public schools
- condition of property and level of renovations necessary
- ongoing fees, e.g., taxes, maintenance fees, trash collection fees
Second, know your financing options.
Before you get serious about your search, learn what your financing options are. If you’re planning to get a mortgage to purchase your home, speak to a mortgage professional as early in the process as possible. By getting this information as early on in the process as possible, you’ll be able to be as prepared as possible when the right property comes along and you can minimize surprises. Things to discuss with a mortgage professional are:
- mortgage loan products and the interest rate, fees, and downpayment requirements of each
- how long the rate is “locked” and fees associated with extending that “rate lock”
- ways you can improve or maintain your credit score
- ideas for saving for an increased downpayment or reserving funds for renovations
- (if you are buying a condominium) which condominium communities are approved for purchases with an FHA-insured mortgage
Third, take a look at specific properties.
There are several ways you can start this process, and you can try them one at a time or all at the same time.
Internet search. You can look on the internet at websites that include information about properties currently on the market. The websites you might find are typically either broker websites (e.g., leafrealtors.com) or “third-party” or “aggregator” websites (e.g., realtor.com, zillow.com, trulia.com). The Garden State Multiple Listing System also has a website that will allow consumers to search for properties (gsmls.com).
Open houses. You can stop by open houses and get a hands-on feel for the homes and communities. Typically, open houses are hosted by real estate agents on Sunday afternoons from 1-4pm, but they are sometimes held on other times of the week when buyers might be available to see the properties (e.g., Saturday afternoons or early evening on weekdays in the summer). You can find a list of open houses for any particular date by visiting the websites mentioned above.
Consult a Realtor®. While it might seem intimidating or old-fashioned to do this, if you connect with the right agent, you can hit the jackpot in terms of finding the right place for you and getting a good deal. Think of it like the difference between researching specific stocks, bonds, disability insurance, and life insurance products on the internet or researching who is the best financial advisor for your needs, personality, lifestyle, and goals . In doing your research for a Realtor® to advise you, you can ask friends for recommendations. You can also use the internet to find out who might be a good fit for you — look at their website, including their qualifications and blog posts (this will tell you if they’re a generalist or if they’re a specialist who has their finger on the pulse of the communities that interest you). Also look at what past customers and colleagues say about agents on their websites, on aggregator sites (see above), as well as on LinkedIn. Some things to consider in choosing your Realtor® are:
- does the Realtor sell real estate as a full-time career or is it a part-time job?
- how well do they know the areas or types of homes you’re considering?
- does the Realtor represent one side of a transaction only or will their representation of you as a buyer be compromised by representing both sides of a single transaction (for more on this, see our blog post on agency relationships).
- do you think you would like working with them? Do they have a personality that works with yours? Are you looking for a good hand-holder through the process? Are you looking for someone who is good with market analysis? Are you looking for someone who has experience with relocating families from out-of-the-area? Will the Realtor have the time/expertise to advise you on all aspects of the transaction as you progress from contract to closing?
- for more about choosing a Realtor, see http://www.realtor.com/basics/buy/looking/realtor.asp
Once you’ve found a Realtor® in whom you have confidence, you’re ready to look at properties that you and the realtor select while working collaboratively to find a home that will match your needs.