The most expensive purchase that most of us will ever make in our lives is a home purchase. It is imperative to make the right choices when coming to a purchase decision. Taking the steps outlined below will save you money, time, and future problems as you look at homes in the Ann Arbor area. Questions often arise about the home buying process, so we’re breaking it down step by step in this 3-part series. Whether you’re new to home buying or not, you’re sure to learn something you didn’t previously know.
Step One: Talk With A Lender
Even the most experienced home buyer will often skip over this step. However, it is important to know exactly how much home you can afford, and whether in fact you can obtain a loan at ideal interest rates. Most people know that lenders tightened their lending criteria enormously after the recession in 2008. Lending standards have now loosened a bit, but it still can be very daunting to step into a still-demanding lending environment. Therefore, speak with reputable lenders ahead of time to avoid disappointment later.
Step Two: Evaluate Needs & Wants
The second step in the process is to establish and to separate your “needs” from your “wants.” For example, the location of an Ann Arbor property may be key in determining whether it is within acceptable commuting distance to your work. However, do you really need a den or would it simply be nice to have? Is the pool a “must-have” for the family, or would you simply like to have one? Separating out wants and needs ahead of time can be crucial. It can have a decisive effect on which homes are seriously considered.
Step Three: Choose An Agent Right Away
This third step in the home buying process is an important one. Choose a real estate professional before you start looking at homes. Do this, and the rest of the process can be much easier.
As you begin your search, it is important to realize that, just as in other professions, not all agents are the same. It’s not even close. The amount of experience and expertise that an agent brings to the home buying process can vary by a wide margin. Too often, somebody uses their next-door neighbor or a friend of their cousin just because they know of that person.
It is important again to evaluate the capabilities of different agents ahead of time. If you drive by a home and you call the agent who is listed on the sign by yourself, you may end up obligated to work with that agent. Although there is a concept called “dual agency,” where that agent can represent both the seller and the prospective buyer, is very difficult for that agent to remain fair and impartial with both parties.
Another mistake that first-time home buyers often make is looking at different homes with different agents. It is important to realize that, once you view a home with a certain agent, that agent is legally considered to be working with you on that particular property. If you find that “perfect home,” but you don’t care for that agent as much, the process can become more difficult and stressful.
Avoid these various conundrums by simply selecting a realtor ahead of time.
Check out our blog for parts two and three of this series, as we’ll examine additional key steps in the home buying process.