Home Buying Tips - Information and Advice

"How to get the best deal on your new home or condo."

If you're buying your first home, or moving up to a better one, now is the time to plan for your new home purchase.

Home mortgage interest rates are still very close to their record lows. During the slow time of the year, any house or condo seller who has a home listed for sale is usually highly motivated to sell.

Your purchase price could be much lower than the home will command in the peak annual spring home-buying season.

If you want to buy a house or condo, here are five tips to make your home purchase easier so you don't overpay:

1. Get a loan pre-approval.

Most experienced real estate agents refuse to work with prospective home buyers who do not already have a loan pre-approval for a mortgage in writing.

The reason is that real estate agents understand a pre-approved mortgage buyer is serious. They know their maximum mortgage amount and home shopping price range. Mortgage pre-approval (not just pre-qualification) shows home sellers they are dealing with a qualified prospect.

You can get pre-approved online in five minutes at E-Loan. Once you're pre-approved, you'll know your price range. You can decide on the specific mortgage amount and mortgage loan type once you've found the right house.

You can also leverage your online rate quotes to get a better deal from a local mortgage lender.

Click here for fast pre-approval at E-Loan.
 

2. Don't be in a hurry to buy a home.

Buying a residence is a major decision that should not be entered quickly. Internet sites are great places to begin the home purchase search. More than 60 percent of home buyers use the Internet to learn about available listings and contact real estate agents.

Careful home purchase research will reveal potential problems. However, when you finally spot the right home to buy, make your purchase offer.

Don't lose your dream home to another buyer's offer while you over analyze.

3. Work with the area's best buyer's agent.

Many real estate agents work almost exclusively with property sellers. Ask your friends and business associates whom they used as their home buyer's agent. You will soon have a list of buyer's agents to interview.

Some buyer's agents ask their prospects to sign exclusive buyer's agency agreements ranging from 60 days to six months. Ask for only a 30-day buyer's agent listing, with the understanding you will renew if the buyer's agent is doing a good job.

Your goal is to avoid being "tied up" for a long time with an unproductive agent.

4. Ask why the seller is selling.

A key question to ask the seller is "Why are you selling this lovely home?" A truthful answer can help a buyer decide if this is the right house or condo for purchase.

For example, if the house is in foreclosure and the foreclosure sale will occur in three weeks, you might not be able to close that fast.

However, if you can close quickly, you could buy the home at a bargain and the seller will walk away with some cash instead of losing it all by foreclosure.

5. Before making a purchase offer, insist your buyer's agent prepare a Comparative Market Analysis.

The CMA shows recent sales prices of nearby homes, asking prices of homes now for sale, and asking prices of recently expired listings that didn't sell.

Armed with a fresh CMA prepared by your buyer's agent, you can determine if the seller's asking price is reasonable.

If not, don't hesitate to make a purchase offer at a lower price you think is reasonable.

To sum it up, you want to be ready to buy, but not in a hurry to do so. Work with a good agent and try to understand what's motivating the seller. And always know what the "comps" are for that particular neighborhood before making your offer.

And finally, never make your best offer first. Always hold back for the inevitable counteroffer.

Related Pages

Home Buying Strategies - Five home buying strategies to make your transition easier - Get pre-approved for a mortgage is key to making a clean offer on the new home you want.

Mortgage Recommendations - Advice on choosing mortgage programs that fit your specific circumstances - Explore mortgage payments for different types of mortgages.

Down Payment and PMI - How to leverage your down payment - Buy a larger home where your equity grows faster and avoid PMI using a two-loan strategy. Learn the 100% financing technique. Avoid paying for private mortgage insurance (PMI) on any mortgage where you put less than 20% down.

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