When looking to buy a home in Indianapolis, there are a number of things to consider, some of which are specific to the geography, others are basic mistakes many buyers, particularly first-time buyers, tend to make. Here are a few things many buyers neglect that you should bear in mind before you buy.
1. Not Checking Your Credit Score or Reviewing Your Credit Report
Before deciding what kind of house you want to buy, before getting your heart set on a specific floor plan or list of appointments, it is imperative that you know how much a bank will be willing to lend you and how much interest you can expect to pay. The first and most important step is to know where you stand in terms of credit.
Give yourself a few months’ head start on this. Review your credit before you start house hunting. This will give you time to assess the report, fix any problems and take care of any errors that might exist. There are a number of online resources that will provide you with a credit report free of charge once every 12 months.
2. Not Getting Pre-Approved
This goes hand-in hand with number one. Getting pre-approved will help you zero in on the houses you can afford. It is always best to get pre-approved before you even start looking at homes.
There is nothing worse than finding your dream home and then discovering you can’t secure the financing. Eliminate that from the equation. Present your pay stubs, brokerage statements and W2s to your prospective lender and let them come up with a realistic number. The average cost of a home in Indianapolis is currently about $114,900. Can you afford that? Getting a pre-approval will tell you.
3. Not Hiring the Right Realtor
Realtors make sure that you have all your ducks in a row – they put you in touch with inspectors, make recommendations based on their own observations, interpret legal contracts and counsel you on how to negotiate a fair price. Best of all, they can show you virtually any home you wish to buy via the Multiple Listing Service (MLS). They communicate with the seller’s agent for you and arrange walk-throughs.
Far too many people hire their realtor by lottery. They make a blind decision and ultimately regret it. Be informed about the realtor you hire. Most of the time you will be asked to sign a contract to work with him or her for a predetermined period of time. If you and your realtor don’t get along, it can drag out the process and even cost you the opportunity to get the house you want.
The National Association of Exclusive Buyer Agents (NAEBA) is a great place to start your search. It is a non-profit organization that represents buyers. You can also check out Indianapolis real estate at other locations.
5. Not Researching the Neighborhood
So you found a great house on a seemingly quiet street. It looks great during the day, but what happens at night? What about on the weekends? What surprises might you be in for with th neighbors? Indianapolis has a higher crime rate than the national average. Is the neighborhood to which you’ll be moving safe?
There are ways to answer these questions before buying. The first involves contacting the local police department and finding out what’s been going on in that neighborhood over the past five years. Police activity is a matter of public record and many precincts have searchable online databases. Those that don’t will usually be happy to talk to you about recent activity (or, hopefully, lack thereof).
Another good indicator is to do random drive-throughs and see what things look like at night and on the weekends when more people are home. The neighborhood itself can have an adverse effect on your home’s resale value. The last thing you want is to buy a house that will be hard to sell.
You also need to know if there are any easements or covenants that affect your relationship to neighbors or the community. If you have school-age children, check out the school system. It is also a great idea to consult the National Sex Offender Database and see if anyone living on that street is registered.
These are not all the pitfalls one can encounter when purchasing a home in Indianapolis but they are among the most important. Be sure to understand all of them before even starting the process.