Buying a home will probably be the most expensive purchase you will ever make. And if you have been waiting for this day for a long time, you thought too casually about the possibilities that you want - maybe you crave a huge bedroom with wardrobes or perhaps a gourmet kitchen with granite counters?
Although you do not want to skimp on the amenities that you like, adding that too many of them can raise the cost and destroy the budget. Instead of thinking about yourself now, think about your long-term financial goals and evaluate your budget before you buy, you can hammer in the house you want without any remorse from the buyer. The only thing you need to remember is that you can add all the things you love to your home and reap the benefits when the price is more valuable.
When you are pre-approved for renting, we will determine how much we think you can afford to spend on a house, not having a situation where you have to complete several tasks, only to make your payments. As in many cases, we will provide the upper limit of the budget, but we do not assume that the upper final number is the amount you have to spend. The top of the budget is based on the assumption that you have paid off or paid off many of your debts and that your current employment situation will remain the same, if not improved.
1. Confirm your budget online
Want to find out what you can afford yourself? Go online and use the mortgage calculator - after entering the sale price, loan term and interest rate, the calculator estimates your monthly payment, including homeowners insurance, real estate taxes and private mortgage insurance. This can give you a good estimate of how much you can afford to pay at the price of the sale, but don’t stop there. Research where there are other expenses you will need to work on your budget after buying a home.
For example, do you have to pay monthly membership fees of home owners? Need a lawn or pest contract? Can your utilities increase after you move? These expenses can really put together and eat into your monthly budget, and if you don’t want to sacrifice your current lifestyle for a new home, you would be wise to choose a less expensive home with a lower price, which will lower your monthly payments. I propose to create a list of priorities for the "must-haves" that you would like in the house. A list of the top 5-10 things in order of priority that you cannot do, not until then, that would be good, but not necessary. By doing this, you can get a zero value on the type of house you want faster, and you will be in the best position to stay on your budget when you start looking at home.
2. Keep tabs with your real estate agent
I had only positive experience with real estate agents with whom we worked, but not everyone was so lucky. When working with a real estate agent, we set what budget you and your realtor. It is important that you assign a realtor to stay in the established budget. Good agents respect your finances and only show you houses that you can afford.
However, some agents may try to click on the envelope and recommend properties outside of your price. We will check and balance and do not allow this to happen, but you must also be firm and stick to your tools.
3. Avoid being like Jones
It is very easy to get into the cycle of "comparison and despair." If you work with a budget of $ 250,000, and your best friend just bought a house for $ 300,000, you can compare your home and convenience options to his or hers.
This is an unpleasant cycle to get into, especially when it comes to buying a home. The house does not have a pair of shoes or an expensive bag - if you have overspent when buying a house, it is not easy to recover from the mistake.
Instead of trying to get your friend to buy a house with an open kitchen, offer your congratulations and then be excited about what a $ 250,000 budget can do for you. Perhaps you will have four bedrooms instead of two, or you will have a gas oven instead of an electric one. Then think about how it is beneficial for you to stay within your budget, for example, maintain a healthy vacation or retirement fund, or start a college education fund for your children.
4. Avoid bidding wars.
Imagine this scenario: you will find the perfect home, you make a solid offer ... and then your realtor calls to inform you that the seller has several offers to choose from. Competition with other buyers is not a picnic, and to win the bid, you often have to increase your offer. This is not necessarily a bad thing if you can stay within the budget - however, during the bidding process you can quickly get out of control. As a rule, we usually will not participate in the bidding, especially if he intentionally artificially inflates the price of a house that exceeds the market value. What for? In the lease to have, there is a markup added to the price of the house for each year that you are in the program. This estimate is usually based on market value or market price. If it is artificially higher than it should be, it can cause problems for you when you go to get a mortgage in this house at the end of the lease before your own term. The estimated value from the lender may not be due to the overpriced price established during the auction.
5. Bid on houses that are not for sale.
Some buyers shy away from houses that have been on the market for a long time, suggesting that there must be a hidden defect. But sometimes the availability of homes for sale is much easier. For example, maybe it just has a bad curve, or too much inventory in a certain market.
Therefore, it is important that you do not automatically exclude the house just because it has been sitting for a long time. Anyway, look for these houses. The seller is likely to be motivated and willing to waive the asking price in order to move the property. This is especially good news if you fall in love with a house that is a little higher than your budget, because you can negotiate a lower purchase price and that can go into your budget.
Even if the seller does not want to lower the price, there is even more room for negotiation when the house is on the market for several months. For example, you can ask for unforeseen circumstances to replace an old carpet or to paint the exterior of a house. If you can determine the reason why the property was not sold, you can ask the seller to reduce the asking price at home or provide a cash allowance for repair.
If you are still concerned about possible hidden defects, indicate in the application that the offer is subject to satisfactory home verification, which is a good idea, no matter what. If problems are found in the home inspection, for example, problems with plumbing, electrical systems, roofing, appliances or windows, you can ask the buyer to make the necessary repairs, or you can withdraw your offer from the table.
Finally
Staying within budget when buying a home requires discipline, so you must be careful about the buying process. Know what you are willing to spend, and refuse to look at the houses listed above for the budget set out for you. If you are unable to find the right property in a few weeks or months, go to your budget to find out if you have room to maneuver. If not, hold on - it's only a matter of time before the right house appears.
