If you are thinking of taking the plunge into home ownership and giving up the notion of throwing money away on rent each month, I think that’s fantastic. However, before you jump head first into the uncharted waters of home buying in any real estate market, there are a few things you need to know if you want to avoid common pitfalls of home buyers who came before you.
1. Find a Realtor First…But Find a Good One
Don’t rely on only referrals from friends and family. Do some critical thinking of your own before selecting a real estate pro. In most markets, the ocean is rife with part time realtors or agents who are not very skilled at their craft. That’s not for you. You need an expert.
What to look for: The best agents often have a strong online presence (Google your candidates) and will be someone who has been published regarding real estate advice throughout the web, successfully throughout their career – and Active Rain doesn’t count.
Start with your social media contacts and Google them. If they cut mustard, add your candidates as friends on your social media accounts. Observe how they interact with friends and clients. This can be very telling in regard to their personalities, which (finding one that fits yours) is a critical element in finding a professional agent who you can relate to and who communicates your way.
2. Sign a Buyer’s Representation Agreement with Your Selected Agent
A buyer’s representation agreement means that everything you tell your selected agent remains confidential, that your financial data is protected and that they agree to represent you and only you throughout your transaction – not the seller.
Expert tip: A common mistake that most first time buyers make is calling agents who have their name posted on the sign in front of a house they are interested in. Don’t do this. That agent represents the seller, and cannot represent you appropriately. You need your own representation. And (the good news for you is) obtaining it costs you nothing, as both agents on either side of the transaction are compensated by the seller at closing, out of the net proceeds of the sale. You pay nothing to have the professional services of a great agent.
3. Get a Pre-Qualification (Or Better Yet) a Pre-approval Letter
No good agent is going to show you property unless they know your buying power. While online mortgage calculators are a great starting point, they do not encompass your full financial picture. Having a qualified lender who works well with your selected agent is also crucial in getting you from contract to closing, sans a lot of extra drama. Ask your agent for three referrals of qualified loan officers and select one from there (using the same method you used to find your Realtor).
Expert tip: Like minded agents typically work with like minded loan officers, meaning that finding a like minded agent is absolutely critical before you buy. Iron sharpens iron, and lackadaisical part time real estate agents simply will not do when it comes to making your biggest investment.
Buying a home for the first time can be exciting, scary and quite an emotional rollercoaster. It’s imperative that you choose a professional who can guide you through the process from start to finish, the first time. Now that you know what to do, go forth, select your agent, and prosper.
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