With the current real estate market, many people are uncertain of how to move forward with the home buying process.
Many potential homeowners are desperately seeking out tips and advice to help make the home buying process easier.
With the ever decreasing home prices there are incredible real estate deals on the market that makes home buying more appealing than ever.
ForeclosureDeals.com has released an incredible user-friendly infographic that relays real estate market trends over the last three years, specifically comparing rental prices to home prices. According to the data, home prices have decreased by 46% and rental prices have increased by 60% just over the last three years. Because of this trend, many people are seeking home buying tips when treading the current real estate waters (especially when considering the number of foreclosure deals that are available today).
Even considering those facts, buying a home in this market may appear to be too dangerous a proposition for most would-be buyers. Home prices continue to fall and more and more homeowners fall victim to foreclosure each month. With that being said, today’s market actually has tremendous opportunities for buyers – especially in today’s uncertain times.
Here are 10 tips to buying a home that buyers should know for ultimate success while shopping for new homes and taking advantage of the decreased home prices.
1. Know your timeframe
Are you looking to stay in an area for five years or more? Or are you expecting to move locations? If you plan on staying put, buying may be up your alley. Planning on moving within five years, though, may mean you should consider renting versus buying. ?(More on that later.)
2. Understand the ways to finance a home
In today’s market, the traditional way to buy a home still applies. Most mortgages, though, require a 20% down payment and better-than-average credit, and are subject to more scrutiny. You can still find low down payments with FHA loans, but going at 20% or more allows you to avoid expensive private mortgage insurance (PMI).
3. Prioritize your needs and wants in a home
What do you want in a home? What do you need? Prioritize these qualities, and find your home based on what is really important to you. Too many details can overwhelm you early and often.
4. Evaluate your financial situation and limitations
How much of a home can you truly afford? The old rule of thumb was three times your annual salary; now it is closer to 2.5 times your salary. Throw in additional expenditures you may have, and also consider maintenance and property taxes. If you feel buying a home may be too expensive…
5. Look at renting vs. buying from a financial standpoint
Many homebuyers – especially today – believe buying is too costly, and choose to rent instead. It may make sense for you. In fact, according to this infographic, there are more renters than buyers, and that trend will continue. Opportunities are there for buyers, though, and anyone who wants to buy has plenty of housing available.
6. Look at renting versus buying from a personal standpoint
In addition to money, you should also consider your lifestyle. Do you want to be responsible for repairs and upkeep, or prefer a landlord handle that? Or, do you want the freedom that comes with owning a home? Many renters feel they need the flexibility that comes with renting for professional reasons, too, particularly with finding jobs.
7. Consider the home foreclosure market
If you choose to buy, there are plenty of foreclosure listings out there that are incredibly affordable and available. Some may need work, but the price savings are substantial.
8. Choose a buyer’s agent
A buyer’s agent is a buyer’s best friend because he or she is interested only in the buyer’s interests, and therefore will represent you entirely. Plus, they frequently are paid by the sellers, so their services are essentially free.
In this market, many prospective buyers are afraid to haggle. Don’t hesitate; throw in a low-ball bid and work from there if you can. This is a buyers’ market, and you should take advantage and get the best deal possible.
10. Seek out pre-approval
If you are financed through a lender for a mortgage, get pre-approval before you go house hunting. This is a required step in many locations for foreclosures and REO homes, and is a valuable tool to use to show sellers that you are serious and ready to buy.
Using these tips can give you an inside track to buying a home and avoid increasing rental prices– especially in today’s uncertain housing market.?