When looking to buy a home, Buyer's can either jump in, thrash around and hope to blunder into their goal, or that can systematically create a plan of action to help get them their desired outcome. The first method is what children often do, hit and miss, before they've learned how to succeed at a task. You'll want to take the "create a plan of action" approach, and not gamble with your dreams. You want to be in control of your biggest purchase and get the best home deal possible.
Three questions you must deal with in your plan of action before making any offer on a home.
1. How Much Can You Afford to Pay for a Home?
If you can only afford a Honda Civic, there is no point going to Porsche dealer. It will be a frustrating experience. There is no point looking at homes at the $500,000 range if you can afford something at $450,000.
This is wear you should already have a "unconditional" preapproval commitment from a lender (Bank). Also, if the lender says you can afford a mortgage of $400,000 but you feel comfortable with payments on a $350,000 mortgage, then take the smaller mortgage. Don't feel compelled to buy at the MAX the lender will approve you.
2. Where do you want to buy?
Ideally you can live anywhere, but most of us are limited to a reasonable driving distance from work, family and friends. Even with these limiting factors you have many choices. You'll undoubtedly want a neighborhood with good schools, low crime, nearby shopping, good transportation, and so on. You'll also want to consider the types of homes, detached family, semis, shared condos or townhomes. Neighborhoods, just a few minutes drive from each other can be vastly different. It is important to "chart" the area you want to live in, "research" it and narrow your focus. Expose yourself to your options and you may find something you never before considered that you really like. Don't be fixated on 1 choice, you may have to settle for 2nd or 3rd.
3. What Kind of Market Are You In?
Is it a hot, normal or cold? In a Hot market, as we currently have, means that there are more buyers chasing fewer homes. As a result, homes sell often as soon as they are listed, often entertaining multiple offers and resulting in homes selling for at or above asking price. If you want to be a player, you must have all your "ducks in a row" and be able to act quickly!
A normal market has a fairly large inventory of homes for sale. On average homes sell in 120 days or less. You have room to negotiate and don't have to "rush" to make a deal. (Save a few high demand neighborhoods, or homes in impeccable condition) Of course there are other buyers, so you still need to act fast on homes you "like".
A cold market, is where there is a huge inventory of homes, very few buyers and homes languish in the market for a year or more without an offer. Parts of the United States have experienced this in the past few years. Home prices keep falling and Buyer's (Investors) make low ball offers while taking into account the depreciation market.
Plan Your Actions: Once you've answered the three questions, you can take the steps to find a home of your dreams at an affordable price. Find an agent your comfortable with and start looking. Offers should always be made appropriate to market conditions.
Summary: 1. Get Preapproval. 2. Decide where you want to live. 3. Know the Market Condition 4. Get an Agent 5. Begin Looking.
———- Jas Jagpal is a Re/Max Sales Representative, who helps families in Markham, Scarborough, Pickering and the GTA in the sale or purchase of their home. Jas’s professionalism and his unique 20% commission sharing program for charitable organizations distinguishes him as a leader in innovation and charity. If you are charitable organization, looking to fundraise and want to partner with extraordinary agent who is honest and upfront, then give Jas a call 647-272-6629. All buyers and sellers are encouraged to visit Jas's website and download his personal brochure to get to know him better. Affiliate with Jas, help him raise 50K in 2010 for charities and Make Good Things Happen. Thank you. ——–
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