Be Wise in Buying a Property: 5 Steps to Ensure a Smart-Buy
Buying a property is one of the best decisions you can ever make towards achieving financial stability. While it's normal to feel overwhelmed about the whole process, in the beginning, you, however, shouldn't let the excitement get into your head. Before you make this appointment calls to various sellers, it's best to understand the whole process and your current situation, to ensure you land the best deal.
You can achieve this through the following smart home buying steps;
Step 1: Start saving for a down payment
The current market is flooded with various properties; the good, the bad and the best. But among the three categories, it's the best ones that usually sell like hot cake. So if you want only the best (which you should), then you should ensure to set aside some cash that will serve as down payment for the property that you will line, so that it doesn't get sold to someone else. But before you do all that, you should be able to answer the following questions;
Am I Financially Prepared?
You're planning on purchasing a property and probably a home that you will spend several years in creating memories with your loved ones. So it has to be good. Worth your money and every sweat. It should be a once in a lifetime purchase that will also meet your long-term needs. And you need enough money to turn your dream home into a reality. But you can't do that if you're surrounded by debts left to right and center. The first step you should take is coming up with a plan on how you're going to clear those debts. This way, you won't have to worry about those huge monthly debt repayment deductions. You should also consider having an emergency fund for those rainy days full of expenses such as repairs.
How much money is enough?
It's often said that money is never enough. While there's some truth to this statement, you can still have enough to meet your needs. So even as you save for a down payment, you should have a financial goal in mind. For instance, you can set aside 10% of your dream home value estimation for the down payment, around 3-4% for deal-closing related expenses and some moving expenses depending on the distance at hand.
Step 2: Get Pre-qualified
If you can afford to pay for your property in cash, then do it by all means; it's the best choice. But don't sweat it f you can't; you can apply for a mortgage loan. But you will have to be pre-approved. Lenders have a well-defined procedure for this and the time required varies from one to the other. But the most important step is to get your financial statement verified and submitting your application for preliminary underwriting. This will distinguish you as a serious buyer.
Step 3: Source for an experienced Real Estate Agent
Yes, you might prefer starting your property search at the comfort of your home by visiting various online markets, but you need some expert input on what exactly suits your needs. And for this, it's advisable to hire a real estate agent within your preferred location. They have been in business long enough to know properties that are up for sale even before they publicized giving you an upper hand in fostering negotiations. You should, however, first have a clear understanding of their service fees to avoid future conflicts. But it's better if you can use the sellers' agents as they are mostly paid by them and you still get spectacular deals.
Bonus Point; Avoid amateurs as much as possible and hire professionals with in-depth knowledge about smart home buying. Learn to separate friendships from serious investments such as this one.
Step 4: Home hunt and submit an offer
Now that your loan has been pre-approved you can begin searching for your dream property. As mentioned above, you can start the search online before heading to a real estate agent for narrowing purposes. You should however clearly draft your expectations such as location, important amenities, and value estimates. There should be no room for compromising.
When you finally get your ideal property, your agent should be able to guide you through the offer submission and contract signing procedure. Don't forget to carefully go through the terms and conditions before signing. Don't shy from asking for clarification where you have doubts/don't understand.
Step 5: Property Inspection, Appraisal And Mortgage Approval
Before you sign the final handing-over any contract, use your right as a buyer to inspect the property. This will save you from future problems. It also gives you a solid ground to request for renovations, discount or deal cancellation. But for this, it's advisable to hire the services of professional property inspectors. This post on building inspections Melbourne gives a detailed coverage on the importance of choosing to work with the experts. It will not only help you identify any structural damages but also use their knowledge to help you better your bargaining power for the best price.
Now that you are satisfied with the quality of the property, it's time to present an appraisal to your lender. It allows you to pay only what your property is worth. If you're getting confused, don't worry, your agent should be able to guide you through this.
Afterward, your lender will take their time to evaluate your financial capability and capital to determine your eligibility for a loan. That's why it's important to ensure your financial situation is appealing.
Once you get an approval, You can now proceed to final paper signing and get the keys to your property! Congratulations on your newest purchase!
As you can see from the above information, buying your dream property isn't a walk in the park. You need to prepare yourself both physically and psychologically for the tedious procedure ahead. But the good news is that you can always hire experts to walk with you. And at the end of it, all your effort and resources, will all be worth it. This information isn't exhaustive, there's still much more to learn, take this as an excellent starting point.