When you find your dream home, your first response may be to jump in and make an offer, particularly if you live in a competitive market. Before you do, there are additional steps from pre-qualifying for a loan (ask Tom Cumpston for details) through researching neighborhoods. You should take these key steps to make sure that the home you purchase is the right one for your needs. Remember, an offer, if accepted, becomes a legally binding contract, so you need to do your homework.
1. Do Price Comparisons
Before making an offer, make sure the home is fairly priced. Have your agent perform price comparisons, and be sure to consider additional factors, such as taxes or homeowner’s association dues, that will come into play. Take care to ensure that the total cost of the home will fit within your budget.
2. Do An Additional Walk-Through
If you’ve only seen the house one time, do an additional walk-through. Verify that it is exactly what you’re thinking of for your new home. The additional walkthrough also gives you the chance to look for things you may have missed in your first visit.
3. Google the Address
Because of the Fair Housing Act, your real estate agent does not have the freedom to tell you if the home is in a “bad” neighborhood. However, you can gather a wealth of information simply by Googling the address or the neighborhood. See if there is any troubling news in the area surrounding the house.
4. Consider Your Contingencies
If you love the house, but find something major wrong with it, you can make an offer with contingencies. Contingencies say you will offer a certain amount for the house, but only if the seller does something as well. For example, you can make your offer contingent on an inspection, which gives you the freedom to back away if the inspection finds a serious issue. You can also make an offer contingent on the seller doing a certain repair, like replacing the carpet or repairing the roof. Keep in mind that contingencies can make your offer less appealing, so be cautious about them if the market is particularly competitive.
5. Research the Schools
Finally, make sure the schools are schools you want to live near. Even if you do not have children, schools play a significant role in the overall value of a house. Do a little digging, too, because some areas may be planning to re-zone or have plans in place to open new schools, and that may impact your decision.
6. Get Financing in Order
Finally, make sure your financing is in order. A pre-approval letter from your mortgage provider makes your offer more appealing, so go through the pre-approval process before making your purchase offer.
Making an offer on a new home is an exciting time, but you need to have the right preparation in place first. Use this checklist, and you will be able to make your offer in confidence, knowing you are ready to go when your seller says “yes!”
Tom Cumpston is a local mortgage expert and can help you with the pre-qualification process.