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Before You Start Visiting and Going Browsing Properties

Angel A. Pacheco
Stop, there are some wrong and ineffective ways to start house hunting? You bet, and I see them all the time. In the current environment where the majority of people prefer 'Zillow' to 'Real Estate', the first step for a number of homebuyers is to go through websites like Trulia, Redfin and Zillow. And of course, why not? Because it's casual, because it's occasional, because it doesn't involve expectations or pressure, because it's convenient, and because, frankly, it's a fun activity. It's all fun and entertainment until or unless you find yourself out of a contract because you weren't prepared and started your search in an inappropriate way. In most cases, the majority of first time homebuyers are not aware of their first major mistake which is setting the budget filter without knowing exactly what their affordability is. So from there it can waste days even months in terms of pursuing something unattainable. And believe me, you cannot un-see better and superior properties on the basis of your budget which most of the times leaves the majority of the homebuyers disappointed in terms of moving back. Hence, you need to go through the following guide in terms of getting knowledge about how to start the search for your first property before you approach any of the Zillow ads to get more information.
Step 1: Obtain a pre-approval letter from the lender of your choice
This is extremely important and always the first thing I advise every homebuyer to do when they begin their search. And why is that? Because getting a pre-approval from any authorized lender or bank will prove useful in terms of getting answers to the following questions:
Can You Afford to Buy a Property at All?
Most of the lenders and banks will require that you can have three lines of credit open. As other lenders won't be interested to even respond to you if you don't meet minimum requirements of credit score. Even some of them will recommend issuing a loan in case if you accompany a higher debt-to-income ratio. Moreover, in case if you accompany a short sale association or have filed bankruptcy then you may not even be able to buy a home for several years.
What is my Affordability?
Since your down payment is a major factor in determining the loan amount, your lender may also consider your credit score, debt-to-income ratio, and interest rate. The most common misconception is that someone who pays about $1,500 in rent per month can afford up to $1,500 in monthly mortgage payments. Unfortunately, only your lender can figure this out, so it is appropriate to analyze this amount before you want to purchase a property over your budget.
What will be my Interest Rate be?
Getting a pre-approval and confirmation from a lender does not limit you to getting a loan from that organization, as it's just a starting point. I always advise my clients to contact several other lenders to find out who will offer you the best and most suitable interest rate. In most cases, your preferred organization will match or try to beat an alternative lender's rate to give you a more impressive deal, so do not hesitate to shop around for loans. As even a fractional point can save your thousands in terms of your obtaining the loan! In addition, you will need a pre-approval letter during the submission of an offer in terms of proving your affordability regarding the purchase of a property, therefore it's best to acquire pre-approval before starting your search in case if you find your desired one and required to respond immediately.
Tip: To get a pre-approval, you must have a recent profit and loss statement or pay stubs, bank statements, 2 years of tax returns, or other proof of income at the time of your consultation. A pre-approval is usually good for 60 to 90 days.
Step 2: Location Settlement
Now that you know your affordability, you need to narrow your search area to one or more surrounding zip codes. What does this mean? As with real estate, your search for your most desirable property is related to the quality of properties that meet your criteria compared to the number of listings in the city. Most people want to know everything about what is available. My 'I'm a Realtor, believe me'. Answer: No, you don't. If you look at every property in town that fits your budget, you probably are:
  • Distract from your top goals.
  • Waste critical time.
  • Confusing properties.
So what are your main goals? Everyone has their own, but you may be able to find them in one or a combination of the following reasons:
  • I want to be near the Metro line.
  • I want to live in the most desirable area of the city and commute to school/work within 30 minutes.
  • I want a bedroom over a studio.
  • I do/do not want a property which needs some cosmetic work.
  • I want a property that I can rent out in the near future.
Let your primary goals guide you. If you know them, you will probably be happy to live in a fun, expensive neighborhood because you may have to accept the fact that your options are limited to studios. If outdoor space is important to you, your options will probably take you outside the city center, and you may have to accept a longer commute. Once you have decided where you want to live, you are ready to look at these listings. However, you need to make sure that you do this in an appropriate way.
Step 3: Contact Me as Your Realtor
Ask any buyer and they will tell you how important it is to find a Realtor who understands you when it comes to the home buying process. Similarly, like an effective teacher, an effective Realtor will challenge you with a lot of engaging and enticing questions that will make you think beyond your aesthetics. Similarly, like a friendly bulldog, an effective real estate agent will advocate for your interests without getting into tough negotiations. From an investor's perspective, your agent must know all the appropriate parties for you, from inspectors to lenders to contractors, so that you do not have to think and worry about who to contact. In addition, the right realtor must be your style, like a true lover, returning your phone calls and text messages immediately and bringing you champagne at the end. Above all, and most importantly, your realtor will guide you through the entire home-buying process completely free of charge (seriously, I won't charge you anything). So why not get the services of an expert from start to finish?
Step 4: Know Your Timeline
Even in some cases where you find your desired property immediately and make an offer on the first place you visit today, it may still take the duration of 30 to 60 days to complete all the processes.
Let me know what category of timeline we are looking at:
  • QUICK TURNAROUND (usually takes a period of time from 2 to 3 of months): In this case, your options are limited and you must act immediately.
  • STANDARD TURNAROUND (usually takes a period of time from 4 to 6 of months): In such a scenario, you have some time to review the market trends on MLS.
  • LONG TURNAROUND (usually takes a period of more than 6 months): If you are not in a hurry to buy, you can take advantage of buying during the off-season, or you can wait until the high season arrives when you may have more available items and options on your checklist.
It's appropriate for you to visit properties with me to build and explore your knowledge base, even if you are almost a year away from your purchase. Alternatively, if you are two months away from the end of your lease, you may still have time to search for the most suitable location, but we will only be required to search aggressively. Moreover, another crucial time frame to consider in this regard does not relate to you, but it relates to your market, as our state has variable low and high seasons. So email me that same day and I can send you a region-specific guide to your city's seasonal and ongoing market trends. So, that's it! Four easy and simple steps before you want to get out there and start looking at properties. Email me the same day to get started!
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