The bubble may be close to bursting with Real Estate values, but if you’re looking for a home to live in and not to flip property for profit, you can still get a good deal on a home you love.
1. Use an Online Morgage Calculator to find out how much of a morgage you can afford. Different people use different percentages for the percentage amount of your pre-tax income you can put towards debt like a morgage, but it seems to be about 35-40%.
2. Get your ducks in a row, financially speaking. This means if you have any outstanding debt that you can pay off easily, do it now. If you have a lot of credit cards you don’t use, close them too. All this factors into your credit score and how much you have to pay in interest on a loan. The more risky you are, the higher rate you will pay. Then you can go ahread and get pre-approved for a loan through a lender. Ask friends and relatives for referrals on banks or loan companies they’ve used, rather than just looking in the phone book, online or going through a piece of spam email you’ve gotten. There are a lot of sams out there, so checking referrals is very important.
3. Research the area you want to buy in. How much is the home you need going to be in the place you want to live in? Sites like realtor.com are great for doing zip code searches and seeing what the going rate is for a home with specific criteria like the number of bedrooms, bathrooms, garage, yard. All the requirements you need. Also, many have pictures, so you see what condition different price ranges are in. You can sometimes get a good deal on a place that needs work, and negotiate the price down, and do the work yourself for a big cost savings. Otherwise, you might find rehabbers and flippers that are willing to cut prices now that the market has gone soft.
4. Start scouting sites, and go looking with a realtor. Also, if you’re selling your own place, now would be the time to list it. Make sure every piece of clutter is gone, and everything is clean when you show your home. (same for pictures of it for the web listings) And be consious that your neighbors may look online at homes and see yours for sale. So don’t be suprised if someone asks about your mauve carpet in the master bathroom from 1991 if you think its your little secret.
5. Hopefully a sale for your place and a contract buy for your new place will happen within a few weeks of one another because they are usually contingent. If you think this may be a problem, you may have to sell your house first, put any equity in the bank and rent until you find a new place. This way its easier financially, but harder because you have to move all your stuff twice.
Happy House Hunting!