Tips for Spring Homebuyers
For serious home-buyers looking to purchase in the spring, preparation is key for the successful search and acquisition of a home. While the real estate market tends to slow down in the wintertime, it provides the perfect opportunity for buyers to get their ducks in a row for the typically competitive spring market. In order to make the search as painless and effective as possible, spring home-buyers should consider the following tips.
1. Check your credit score— Your credit score is more than just a number. It will not only affect your mortgage rate, but it could also affect the down payment you’ll need so you can qualify for a mortgage with your lender. Visit annualcreditreport.com to pull your credit report once a year to find out what your score is. It is also useful to identify if there are any discrepancies that need to be corrected or if you need to repair your credit before applying for a loan. 2. Get pre-approved in advance— In competitive markets like the Washington metro area, it is essential to get pre-approved before making an offer on a home. While it is not a loan commitment, it does speed up the underwriting and loan approval process. Not only does it allow you to close on your home faster, many times sellers won’t consider offers without a letter of pre-approval. Furthermore, it is important to work with a reputable lender to keep sellers at ease in case the loan isn’t approved and they have to put their home back on the market. 3. Understand your costs and budget— When buying a home, the purchase price is just the beginning of the costs involved in the process. Closing costs often catch buyers by surprise, which are typically 2-5% of the home’s purchase price. There are also property taxes to consider, as well as inspection costs, homeowner's insurance, and repairs. Even if you are able to negotiate with sellers to make repairs, there may be unexpected repairs to address once you have assumed ownership of the home. When crafting a wishlist and budget, take all of these factors into consideration. Understand what are must-haves and where compromises can be made. 4. Get your finances in order— Once you have checked your credit score and determined your budget, it is wise to get your finances in order ahead of making an offer. Continue to make payments on time and pay down debt, as well as pay off delinquent bills. Have your down payment funds in an accessible place and have loan documentation complete. It is also prudent to save cash for emergencies like job loss or significant repairs. It is best to have 3-6 months of expenses saved up in case of emergency. 5. Hire a Realtor— Your real estate professional will be an invaluable resource throughout the home-buying process, not only in terms of the home search but also in your own preparation. Before the search even begins, a Realtor can connect you with several reputable lenders to work with you on your finances and get you pre-approved. Your Realtor will also have knowledge of the local market and can guide you based on their expertise. Realtors also have access to the Multiple Listing Service (MLS), which will have the most exhaustive pool of homes that are active or coming soon to the market. While open houses are open to the public, private showings must be done with a licensed real estate professional present, so it is important to have a Realtor who can grant you access to the properties you want to visit. Once you have decided on a home you’d like to make an offer on, your Realtor will work with you to craft the most appealing offer. Once under contract, your Realtor will guide you through the process from ratification to the settlement table.
With the spring market a couple of months away, now is the perfect time for serious home-buyers to prepare themselves for a competitive market. By getting your finances in order and consulting with a real estate professional, the spring home-buying process will be much easier.