Preparing to Buy a Home

It can be overwhelming when you decide you are ready to buy a home. Friends and family may warn you about maintenance, unexpected repairs, etc. The good news is, when you purchase a home, you are making an investment. The home buying process is fun and exciting, but with the competitive, fast paced market, it is important to work with a real estate agent that you trust.

When considering what you can afford, it is helpful to talk to a qualified lender to determine the price point that is right for you. Initially, you can get prequalified. This process is less precise, but helpful to give you a baseline of what you can afford. The more accurate and involved process is called getting pre-approved. This involves submitting pay stubs, bank statements, tax returns, and other financial documents. This process is mandated during the financial contingency period of a sale, so the bank has proof that you can afford the home. It is recommended that buyers spend no more than 31% of their income on mortgage costs. This number can rise to up to 40% if buyers have no debt to consider. It is important to remember that in addition to your mortgage, you will still need to allocate money to utilities, groceries, etc.

There are various loan options when you are buying a home. For example, not all home buyers are able to put down 20% as their down payment. Lenders do not want you to empty your account in order to make your down payment. Oftentimes, people consider money for the down payment, but it is easy to forget about the closing costs. These are paid on the day of closing, and range from 2-5% of the sales price. It pays for the lender, closing attorney, title check, title insurance, etc. At times, you are able to negotiate with the seller to acquire some of these costs. You lender will provide you with the exact amount before your closing date.

Once you have your finances organized and you know what you can afford, research what neighborhoods are appealing to you. Do you need to be close to work, near public transportation, within a good school district, will you eventually need to rent out your home? These are all important questions to consider because they can affect your overall happiness. Once you feel comfortable with an area, attend open houses to get a feel for the prices, the models of the homes, and the neighborhood itself. When viewing the home check out the closet space, views, yard maintenance, etc.

Because home buying can be overwhelming and fast paced, it is crucial that you find an agent that you can trust. Not only are buyers’ agents trained to understand the market, negotiate price, explain the home buying process, and guide you every step of the way, but they do not get paid until you find the home that is right for you. The agent is paid by the seller of the home, not the buyer. In addition, they have access to up to date software that allows you to be in the loop on current listings, investment opportunities, new construction, etc.

In conclusion, the home buying process presents many opportunities, and it can be overwhelming. Spend time researching what you want in your future home and choose an agent that you can trust. After all, this is where you are going to be making memories with your family and friends for years to come. If we can answer any questions or help in any way, just give us a call – 678-921-1470!

Written by Claire Conarro, Buyer Specialist, The Peters Company

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