Here are five best practices newlyweds can use to prepare for the home-buying process:
1. Get your credit and personal finances in order.
A great place to start is getting a complete picture of your credit. You will want to obtain copies of your current credit report. Also, be sure the details are correct, and consider fixing any potential problems you may find.
Next, find a reputable mortgage lender, apply, and get pre-approved for a home loan. This will put you in the best financial position to make a well-priced offer when you find the perfect house.
2. Choose a house payment you can comfortably afford.
Just like engagement rings, there’s a wise rule of thumb to go by when buying a home: approximately 2.5 times your annual income. Several online mortgage planning tools and loan calculators can show you how income, debt, and recurring monthly expenses affect what you can afford.
Remember, there are considerations beyond the sticker price, such as property taxes, energy costs, insurance, annual maintenance, etc.
3. Hire a real estate professional to assist.
While the web offers home buyers access to home listings and online resources, many aspects of the home-buying process require expertise you can’t pick up from surfing the internet.
You’re often better off using a professional real estate agent than hacking through the home-buying process alone.
Where possible, consider recruiting an exclusive buyer’s agent with your personal and financial interests at the forefront of the purchase. Also, don’t be afraid to ask them to help you with negotiating strategies during the buying process.
4. Research the local community and surrounding area.
Before making your first bid on a property, do some due diligence to determine the temperature of the local real estate market.
Are the current conditions more favorable for home sellers or buyers?
Always make note of sales trends of similar homes in the area or neighborhood.
Look at home prices for the last few months to develop a competitive and realistic asking price.
5. Think of your purchase as a long-term investment.
You shouldn’t buy unless you’re sure you’ll be staying put for at least a few years, but beyond that, you should always buy in a neighborhood with good schools, as this will impact your home’s resale value later.
As for the house itself, you should plan to hire your home inspector, who can point out potential problems that could require costly repairs down the line.
The details of every home purchase will differ, but if you stick to these five best practices, you will have a head start on a successful new home-buying experience.