Peace out, landlords! In the year 2018, you've resolved to purchase your own home. Whether you're gunning for chic city condo or quiet house in the middle of nowhere, there are several tips our experts believe apply to all prospective buyers.
Figure Out Where You Want to Live
"Explore your neighborhoods of interest," says Lara Shuqom of Compass Real Estate. "Visit the communities that appeal to you, eat at a local restaurant, spend time walking around the town center on a weekend, shop at the local supermarket. Act as if you were a resident and see if it suits your lifestyle." Start talking to realtors and requests the latest neighborhood data, like recent listing and sale prices, percentage of property appreciation over the last few years, and if any new developments are under construction.
It's also vital to consider how much you want to weigh the quality of the environment you live in versus the quality of your house. "Do you want a small beautiful home in an expensive town or a large home in a more rural area, or the other extreme, being an urban area that has not yet gentrified?" says real estate attorney Felicia B. Watson.
Also, keep in mind the trek you'll be making to work every day. Consider the proximity to public transportation, and the length of a rush hour commute from your home to your office.
Ask Yourself: Are You Financially Prepared to Buy a Home?
"Smart buyers today are not only acutely aware of their own financial standing, but do the research to know the best direction to go for agent representation and obtaining the best financing options," says Matt Murphy, CMO of Chime Technologies, an all-in-one real estate platform.
It's also vital that you find a mortgage lender you feel comfortable with, says Sarah Maguire of Compass Real Estate. "If you plan on buying in 2018, now is a great time to meet with a mortgage lender to get pre-approved for a mortgage. They will run the numbers and give you a pretty good idea on how much you can afford."
Think Like a Cub Scout: Be Prepared
If you're hoping to buy a house in 2018, then the 2017 holidays are probably not the best time to splurge on a car, or take that Hawaiian vacation. "Do not take on any new, large debt like a car lease or opening a new credit card," says Maguire. "This can negatively impact you when it comes time to buy and apply for a mortgage." Also, you want to be able to put down as large of a downpayment as possible. "If you are able to put at least 20% down, you will avoid paying PMI (private mortgage insurance)," says Maguire. "This can add a couple hundred dollars to your monthly payment if you need PMI. Another reason you want a large down payment is, is that when the time comes, it will make your offer stronger and more attractive. The larger the down payment means the less you are borrowing, and the less you are borrowing makes your offer less of a risk."
Once you know you're ready to put in an offer, have all your ducks in a row: "My advice as always been take as long as you need to get ready — check out homes online, go to open houses, figure out finances," says Ed Deveau of Century 21 Mario Real Estate. But don't let that distract you from being organized. Once you're at that point that you're looking to buy, be ready, and have all your pre-approval done," says Deveau. "That way if you come across an opportunity, there is no hesitation. It's a seller's market, so waiting even a few hours might cost you your dream home."