How to Make the Most of the Homebuying Season
From Credit.com 6/28/14
Spring and summer are great seasons to take a trip, enjoy the outdoors and try new things. Turns out the months between April and July are also the highest season for homebuying. In fact, usually more than 40% of annual housing transactions happen during these four months and forecasters expect the percentage to be even higher this year. The favorable weather makes moving more appealing and renovations or repairs more easily accomplished. While this year should see increased inventory, be sure you are prepared to make homebuying and financial decisions. Follow these tips to position yourself best this homebuying season.
In addition to determining how much house you can afford, there are further steps to make sure you are ready to purchase your dream home when you find it. Having pre-approval from a lender before you begin the search will make the mortgage application process smoother as you have already gathered the necessary documentation and spoken to a mortgage broker. It can also help if there are multiple people interested in buying the same home. Having a recent, up-to-date pre-approval letter can be a distinct advantage over other eligible buyers. Every 30 days your approval must be updated, so be sure to stay on top of the process if your search takes a while.
Work With a Buyer’s Agent
Your level of confidence and comfort with the homebuying process usually help determine if you need an agent. An agent with an extensive network, industry trend knowledge and strong work ethic can be an asset. These professionals will help you navigate the paperwork, inspections and all transactions involved with buying a home. These services are often free to you as a buyer as they receive a share of the real estate agent’s commission, which is usually paid by the seller.
When you are ready to make an offer, your initial bid makes a big impression so be sure to enter the negotiation well prepared. If you are competing against other offers, ensure that you stand out as the right buyer. Even if your offer is not the highest, an “all-cash” payment is hard to top. Of course for many of us this isn’t an option. Instead, consider what you can offer the seller — whether it’s an appreciation for the architecture or work that they’ve done on the home. Also you can make the transaction as easy as possible for the seller — by not putting too many demands on them with repairs or multiple showings.
Check Your Credit Ahead of Time
No matter what time of year you decide to buy, it’s important to plan ahead and give yourself time to get your credit in the best shape possible before you apply for a mortgage. That means not taking out any new credit or loans, and checking your credit reports and credit scores to identify any problem areas that need your attention. You can get your free annual credit reports from each of the three credit reporting agencies, and you can check your credit scores for free using tools on Credit.com. If you see that you need to correct any errors on your credit reports, for example, you’ll have time to make those changes. And of course, if you’re familiar with your credit reports and scores ahead of time, you’re less likely to encounter unwelcome surprises when you apply for your home loan.
Being ready to move fast, but knowing when to walk away are also important for would-be homeowners. Don’t get pressured into buying a subpar home or paying a price you do not consider fair. While it is important to choose wisely, being available at the seller’s most convenient time can make you an ideal candidate for purchase. In this high season of home selling and buying, know your priorities, be educated on the sale’s circumstances, and make yourself stand out.