Top 10 Things To Know About Shopping For A New House
Shopping for a new house is a time of heady excitement for most people, who begin to imagine their new lives in their very own home. Before you get caught up in the excitement, you should make sure you educate yourself all about the buying process. Read on for the top 10 things to know about shopping for a new house.
- Understand whether you are in a buyer’s or seller’s market: If there are more houses than there are buyers, the homeowner may be more likely to accept a lower offer. If, on the other hand, there is very high demand for houses in your area, you may need to be prepared to either pay more or wait until the market cools off a little.
- Research the average mortgage rates: Mortgage rates are generally set at a national level and depend on the state of the housing market and the interest rates set by the Federal Reserve. Researching these rates can not only give you a good idea of what your mortgage will cost, but can also help you get an idea of how the housing market and economy as a whole looks.
- Getting pre-approved for a mortgage can expedite the process: If you get pre-approved before you begin to look for a house, you won’t waste time looking at homes outside your price range. Furthermore, once you find a home, you can just go back to that bank and get the mortgage you were pre-approved for, instead of having to shop around for lenders and qualify for a loan at that stage in the game.
- A buyer’s agent can help: Buyer’s agents work with home buyers, helping them to find properties and decide what to offer on them. They can use their expert knowledge of the market to give you guidance on your home purchase and can use their industry connections to make sure you find the house you want from among the available homes on the market.
- Sellers normally pay the commission for a buyer’s agent: Not only does a buyer’s agent help you out in buying a home, but you also don’t need to pick up the bill. In most cases, the seller of the home will pay both the seller’s agent and buyer’s agent a commission equal to three percent each of the total price of the home.
- You will likely need a down payment: Most lenders require you to put down 20 percent of the home’s value on a house you are buying. That way, you own a piece of the house and the bank has a cushion if property values fall so you don’t end up owing more than the house is worth. If you fail to put down 20 percent, you may have to pay something called private mortgage insurance (PMI).
- A house without curb appeal may be the best deal: If a house looks unattractive but is structurally sound and in a good location, you may be able to get a great deal on it since most buyers aren’t imaginative to look beyond surface appearance. if a quick coat of paint or some new carpet will fix a home, make sure you look carefully at it to get a potential bargain.
- Real estate values are important: Your home is not just a place to live, it is an investment. According to the National Association of Realtors, 3/4 of most Americans wealth is in their homes. As such, you want to make sure you find a home that is likely to go up in value. You also don’t want to pay too much for a home, given the current market conditions.
- A home inspection is normally required: This is conducted by a professional who comes to the house and spends several hours looking for any potential problems. A home inspection can help you avoid making a costly mistake, such as purchasing a home with structural damage or other problems that can cost thousands (or tens of thousands) to fix. Most mortgage lenders will even require a home inspection before giving you a loan.
- There are costs associated with closing the deal: When you buy a house and finalize your mortgage, you have to pay closing costs. These include mortgage application fees, the cost of doing a title search to make sure the title was clean, and other fees associated with getting your mortgage loan. You can either pay them up front or, in some cases, have the costs rolled into the cost of your mortgage and pay them off over time.