Your Home Buyer's Toolkit: Introducing Your Team...
Consider your agent your coach, your trusted advisor, your concierge service, your partner. She/he can be a huge asset in helping you make the very best decisions as you move through the process of buying a property. In fact, once you've selected your agent, you'll find they can most likely recommend other professionals to add to your team, services like lenders, attorneys, home inspectors, etc. They'll recommend people who already have a proven track record with them and their colleagues for providing quality services to their clients.
Having the right lender in your corner is HUGE! We've all heard the stories about unscrupulous financial dealings and unfair lending practices. A quality lender will evaluate your financial circumstances and advise you as to which financing alternatives will best fit your particular needs. They'll warn you about the potential pitfalls of certain practices (such as negative amortization, or prepayment penalties) so your financial risk is substantially reduced. And that's a GOOD thing!
While real estate transactions may not be conducted with the use of real estate attorneys in every state, they certainly are in Illinois...particularly in the greater Chicago area. And while a particular buyer or seller may choose not to hire an attorney, the reality is the party on the other side of the transaction most assuredly will. In the largest single financial transaction of your life to day, you don't want to give "the other side" any sort of unfair advantage. Protect yourself...find a good real estate attorney (an attorney who specializes in real estate transactions). Attorneys in other specialties may well excel in their areas of specializations. However, far too often they fail miserably in their work on real estate transactions. This could cost you thousands...it could cost you the home of your dreams.
While no home inspection will uncover every single issue in a home (the inspector can't see behind the walls, under the foundation, etc, it certainly will go a long way to expose the sort of issues that might impact your decision to purchase the home. Is the home appropriately wired, what's the condition of the roof, of the foundation, are there leaks, has there been flooding in the basement, what about ventilation, etc.? Your agent can furnish you with names of reputable ASHI licensed home inspectors.
As we said earlier, your Agent is like your "coach", skilled at overseeing the entire process from start to finish. As coach, your agent will guide you throughout the process. But to help give you an "overview" of those critical first steps, here is some information that should be of help.
Determining your Price Range
There is so much information online that it's easy to come to the conclusion the home buying process is great for the "do it yourselfer". The problem, however, is that much information is either wrong, or at the very least, misleading or incomplete. A very simple example is that most online mortgage calculators only give you the calculation for the "principle & interest" portion of your payment. Ever look at a great house on the web, listed, for example, for $250,000, and you run the mortgage calculator on it and discover the "payment" is only $1500 per month? Unfortunately, that's only part of the payment. Most do not include homeowner's insurance, real estate taxes, private mortgage insurance, or association fee if there is one. Those items could easily add another $600 or more to the payment! When discussing qualifications, remember there are several different numbers that are important. For example, there is the amount your lender tells you that you are qualified to pay on a monthly basis. There is also the number you are comfortable paying on a monthly basis. Those numbers are often quite different.
The point is that beginning with online calculators is fine, but to really know where you stand with regard to qualifying for a home purchase, you need to speak with professionals. Your agent can recommend several to speak with to help you get your financial bearings, if you don't already have a lender you'd wish to use. Even if you're not quite ready to buy, a good lender can advise you as to what steps you should take to put yourself in a better buying position. They will also supply you, when the time comes, with a preapproval letter which will put you in a better negotiating position when the time comes.
What are your local market conditions?
Again, the internet can be very helpful. There are literally thousands of websites offering a wide range of advice and information about buying a home. They can give you an idea as to what's going on in the real estate market, but conditions vary, even within a given community. You might find that homes under a certain price range are selling like hotcakes, while those above a certain range are sitting for long periods of time without a contract. At some point it's beneficial to speak with a professional real estate agent who can offer insights into the current market as it applies to your particular situation and needs.
Assessing your priorities
Every household is unique. Certainly financial circumstances vary, but so do a lot of other things. How many will be living in the home? Do you prefer having lots of people visit, or would you rather keep things quiet? Are there pieces of furniture (like that king sized waterbed) that would need to be accommodated? Do you need a particular school district for your kids, or particular programs within the school (such as special needs programs, language programs, sports or arts programs, etc.). What about the commute distance to work? Or particular features in a home that are "must haves"? Make a list for yourself. It will help you to focus on those things that are most important to you vs those that you could live without if need be.
Your Dream Home Awaits!
Once you have your proverbial ducks in a row, the real fun begins! While you can certainly begin the search for a home online, it's important that you understand that all online searches are not created equal! Property listings are added to websites in many different ways, and depending on how they are added, there is vast disparity in how current, complete, or accurate the information is. The only way you can be sure you have access to all of the listings currently for sale in the areas that interest you is to find a great agent who will provide you with that information. Otherwise, don't be surprised when the homes you like are already sold and closed, or are simply no longer for sale, etc. As much as there is great information on the web, there is also significant misinformation as well.
There, now. Are you ready to begin the process to finding YOUR dream home? Let's get started!