We know when you decide you’re ready for a new home, the first thing you want to do is start seeing what’s out there!!  However, we strongly urge that all buyers speak with a lender BEFORE starting to tour homes.  Here are some reasons why:

  1. Set your expectations appropriately.
    If you’re only able (and/or comfortable) spending enough to buy a $300,000 home, you shouldn’t be looking at $500,000 homes.  There are plenty of wonderful homes in the $300k range, but compared to $500k homes you’re likely looking at a little less space, less amenities, or perhaps a location further from the city.  If you start looking at $300k you’ll fall in love, but if you start at $500k then adjust to $300k you’re bound to be disappointed by the comparison.
  2. Learn about your credit score.
    If there are any issues, you need time to address them.  Especially if they are unexpected and unpleasant surprises like an unpaid bill that you never knew about or identity theft!  Your lender can guide you how to correct those items, but it does take time.  And often it’s not enough time if you are already in contract and have only a few weeks to close!
  3. Learn about the cash needed for settlement.
    Based on your home budget, the lender will give you an estimate of the monthly payment as well as the cash you will need to bring to settlement.  Knowing this up front gives you time if you need to/want to save a little more, or move funds out of other accounts (eg. withdrawing funds from a CD or investment account can take time.)  If a family gift is part of your plan, your lender can let you know what type of financing allows for gifts, and what documentation you need to collect.
  4. Be ready for a competitive situation. 
    The market in our area is pretty competitive.  There is not a lot of inventory, so most homes sell quickly and buyers are often running into multiple offer situations.  It sounds crazy, but if you find your dream home, that home might not still be available a week or even a few days later once you meet with a lender and provide all the documentation that is required for pre-approval.  If you want to be able to act quickly and write an offer right away, you should already have a pre-approval letter in hand.  One of the first things listing agents do is call lenders to verify a buyer’s financial strength and timing – especially when they are comparing multiple offers with their Sellers.  Plus you’ll have a leg up on the competition who aren’t as prepared as you are!

We hope these tips are helpful as you venture into the Home Buying process.  We have a team of great agents who are happy to help you find your next home.