7 Habits of Highly Effective Home BuyersEffective Habit #1: Get pre-qualified (or pre-approved) for a loan
You can’t effectively search for homes if you don’t know how much home you can afford. In today’s lending environment, it is crucial to know BEFORE you begin a home search what type of mortgage, and how much of a mortgage you can get.
It is crucial to work with a good lender throughout the home buying process. If you don’t know a lender, ask your agent for a few recommendations. Interview a couple of lenders and pick one and stick with them. Few things add more stress and headache to a real estate sales transaction than changing lenders mid-stream. Find a lender that won’t just tell you the maximum amount of a mortgage you can get, rather find one that understands that qualifying for a certain amount and being able to make the payments are two different things.
Effective Habit #2: Define your must haves, like to haves, and can not haves
Determine what you MUST have in a home. Then determine what you would LIKE to have in a home. Talk to your agent about these things. Don’t forget to include what you CAN’T have in a home — that will often be more important than anything else.
Don’t know exactly what you must/like/can’t have in a home? That’s OK, it happens ALL the time. Your agent can help you by showing you different homes with different features to help you get a better understanding of what you’d like in a home.
But at some point you are going to have to make decisions and not wander aimlessly about, looking at any home that may possibly fit some undefined set of criteria. That would be a waste of your time, and the time of your agent, the home sellers, your lender and everyone else that is involved in a real estate transaction.
Effective Habit #3: Be realistic
Buying a short sale and expecting the owner to make a bunch of repairs (or any repairs)? Good luck with that. Buying a home and thinking if the home inspector finds anything wrong with it, i’m not buying the house? Well you might as well stop right now because I can assure your there aren’t any homes where the inspector finds nothing to report. Get your brand new built to your order home constructed and an inspector will find some items to address (and yes, you should get a new build home inspected — more than once).
Effective Habit #4: Be flexible
As a home buyer, it is important to be flexible. Unless you are having a home built to your exact specifications, it’s very unlikely that you will find the absolutely perfect home for you. Maybe you find a home that has everything except the perfect kind of flooring, colors, cabinets, whatever. If you have some flexibility built into your must haves and likes, you will find the entire process much less painful.
Understand that in most cases there is a living breathing human being involved in the other side of your transaction. Home sellers are people too. Nit-picking them to death in negotiations and repairs isn’t likely to do much good and could quite possibly do harm. This isn’t to say you should cave to every demand the sellers make. You should stand firm on things that really matter and be flexible where you can be in order to move the transaction along.
Effective Habit #5: Understand the home buying process
You don’t need to understand every nuance of the home buying process — that is your agent’s job. But the more you do understand, the less stressful and mystifying the process will be. Trust me, buying a home is a stressful event. Anything you can do to reduce that stress will go a long way not just toward saving your sanity but in helping ensure the transaction moves to closing.
One of the most important things to understand is your purchase contract. There are two parties to a real estate contract — you the buyer, and the seller.
Regardless of exactly who/what owns the home you are buying, you are entering into a legally binding contract when you have your offer accepted, and there are obligations that contract binds you to do. There are timelines that must be complied with, and if they are not, you can suffer some pretty serious / expensive consequences. Your agent, your lawyer, your lender, your title company, the appraiser — all will work diligently to ensure a successful closing, but ultimately they are not parties to the contract. YOU need to (with advice from your agent and/or attorney) understand all the terms and conditions of your contract. It is also helpful to understand the escrow, appraisal and lending processes. The successful completion of each of these are fundamental to your closing on your new home.
Do not be afraid to ask your agent questions. Lots of questions. Be advised that everyone in the process tends to toss about terms and acronyms that only those dealing with this stuf fon a daily basis understand. Sometimes we forget we’re speaking in a different language. Don’t be shy. If there’s a term you don’t understand, ask.
Effective Habit #6: Be responsible
As a home buyer, you are going to have to work with a lot of different people in order to make sure your transaction progresses and ultimately closes. Yes, your agent will take on the burden of most of this, but you are still ultimately responsible for your actions.
You are (most likely) financing your new home. As such, it makes sense that you need to be responsible for maintaining your credit worthiness while your mortgage is being processed. Listen to your agent and lender and don’t go buying a car before your mortgage processing is done (yes, I’ve seen it happen). In fact, don’t buy anything on credit without speaking to your lender. And if you think you can quit your job a week before closing and still get that mortgage, think again (yep, seen that too).
When you are looking at potential homes, be responsible and respectful that you are in someone else’s home. It’s OK to look in their closets, to flip light switches, to turn on the stove. But be responsible and leave the home in exactly the same condition you found it in.
Much of this habit really boils down to two things: 1) use common sense; and 2) treat others how you expect to be treated.
Effective Habit #7: Have fun!
Take a look around at lists of “life’s most stressful events” and you’ll see things like taking on new debt, financial change, moving — that’s buying a house folks. You are about to enter into one of the singel largest financial transactions of your life. Stress is a given.
But buying a home is also an exciting time! There isn’t a law that requires you to mope around, dreading every moment. There’s nothing wrong with having fun during the process. Hopefully you’ve selected an agent that you enjoy working with. Ditto for your lender. That doesn’t mean you all need to participate in group hugs or go camping together and join hands around the campfire singing Kum Ba Ya. But it’s OK to laugh, to enjoy yourself, to have a little fun in the process.
Thompson, Jay. "7 Habits of Highly Effective Home Buyers." The Phoenix Real Estate Guy. N.p., 26 Oct. 2011. Web. 17 Jan. 2013.