How Not to Pay Too Much for Your Home

Whether you are buying your first home, or your fifth, the process of buying a home is a detailed, time-consuming venture. At the same time, it’s an emotional period laden with difficult choices. You want to ensure that the home you purchase meets your family’s needs now, and in the future.

Each of these decisions often involves money. When you consider all that money represents, you’ll want to ensure that you don’t pay too much. This article helps you become a savvy buyer, by pointing out some of the pitfalls inherent in the home-buying process. These include such things as knowing what you want before you begin shopping, taking your time to shop, choosing the right realtor, and remaining objective while viewing potential homes. With this information, you’ll be closer to finding your ideal home.

1. Before you shop, develop a needs vs. wants list.

Everyone has a vision of their ideal home. This would include all the features you not only need, but have long desired. However, when it comes time to buying a home, the desires cost more. While it’s nice to think about having a beautifully landscaped backyard, or an acre or two of land just on the outskirts of town, perhaps even some built-in stainless appliances, these are usually considered luxury items, which can add considerably to the price of your home.

That’s why it’s a good idea to develop a needs vs. wants lists. With this list, begin with items you really need, like adequate space, garage and number of bedrooms. For most people, basic needs should be considered first. After that, you could consider additional desires, if you can manage these benefits financially.

With such a list in your hands, you’re less likely to be caught up in the excitement of the pursuit. You’ll have a good idea of what you want, within your price range, and if you can afford those additional items.

2. Get pre-approved prior to shopping.

Visit your financial or lending institution prior to home buying (If you need a list of local lenders in northwest Arkansas, I’ll be happy to send one.  I have no arrangement with any of the men/women on the list, they are simply lenders that have served some of my other buyer clients well, and I am happy to pass their name on to those who have no lender, yet). The lender will be able to quickly tell you the amount of mortgage you can qualify for. Be sure to get this mortgage commitment in writing, as it will “give weight” to your offer when you are negotiating. It tells sellers that you are a serious prospect, that you are “good for the money,” and it ensures that you are ready to make an offer as soon as you come upon that ideal home.  Furthermore, sellers of bank-owned properties, foreclosures and short sales will not even look at an offer from buyers who are not pre-approved.

Another advantage to visiting a lender first is to learn of the different types of loans that you qualify for—their pros and cons—in advance.  You may opt for a lower interest rate or less down payment. Whatever you choose, you must begin at the bank, and so be one step closer to purchasing your home.

Prime Real Estate & Development
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Email Diane