Buying a new house is a big moment in everyone’s life. There is a lot at stake, both financial as well as everyday life of the family. So, some indecision is bound to creep in before making a final choice, even if you are the most confident person. To own a new house you need not be an expert from the real estate sector, but lack of key knowledge of important aspects also causes a lot of confusion before the home purchase. Apart from this, finalizing the deal on your new home requires a lot of perseverance. The entire home purchase process may span across many months and even years. So, consider yourself to be in a hurdles race where glory awaits you on the other end. There will be many difficulties, but a good life is assured at the end of the home purchase cycle. To ease some of your tensions, we are presenting a list of common issues (or misconceptions) that delay the home hunting process.
Stage 1: Deciding on the Right Timing
If you take a look at the real estate market you would realize that this is the best time to invest in real estate. Affordability of apartments is at its all-time high, and home prices along with the interest rates remain quite low. But trying to find the best time to invest is a fallacy that delays your eventual decision. Men who get caught up in the process of trying to find the best time, end up on the losing side. Waiting before investing would mean you lose many great options. The important decision on when to buy a new house should be dictated by other factors, and not by market conditions. It is a good idea to buy an apartment that would remain an asset for you in the next 4-5 years (if your town’s real estate sector is blossoming) or 7-10 years (if it is seeing fluctuating fortunes). Smart home buyers make investments when it is ideal for them and they take into consideration important factors such as life plans, family plans, career plans as well as financial plans.
Stage 2: Whether or not to work with mortgage broker suggested by the real estate agent?
Inspired by some rare real life misfortunes of homeowners, the real estate pundits have made a big story about the real estate agents and mortgage brokers’ nexus. The common conception among the prospective homeowners is that real estate agents are always looking for scopes to land the homeowners in the middle of high loan interest rates. They feel that the mortgage brokers pay some extra bucks to the agents for catering them easy preys. But, there is no truth in this portrayal. On the contrary, if you work with a mortgage broker having a good track record of helping the real estate agent’s clients, then you are more likely to have a better experience. First of all, the real estate agent would take your property hunting more seriously once his trusted mortgage broker has run a check on your income, credit score and approved the loan. Secondly, the close relationship between the mortgage broker and the real estate agent would help you fast track the loan process, facilitating quicker turnarounds. Thirdly, you do not have to go through the pains of searching for a trustworthy mortgage broker who would be able to close transactions in a timely way, as it is required in today’s real estate contracts. Apart from all this, the relationship between the agent and the broker can help you negotiate on the loan items and even get a waiver off, to a certain extent, on the processing fees. So, as you can see working with a mortgage broker suggested by the real estate agent can save you money as well as hassles.
Stage 3: Whether to look for regular or distressed property deals?
The rate of short sales and foreclosures has gone up by 30% in the present year. Purchasing a foreclosed home could cost 30% less than the standard market rates. But it is not always that simple. Mortgage brokers as well as asset managers, presently want to set prices for such distressed properties as close to the original market rates as possible. Banks have taken a general stance, not to grant loans against a property purchase that is 10% below the standard real estate rates. So, if you are trying to purchase a distressed property you might find yourself in a spot of bother. On the contrary, regular home sellers are willing to offer hefty discounts on their property rates if there are lots of distressed properties available in their area. Such home sellers remain negotiable about every aspect from escrow periods, prices, and repairs, among others. The regular home sellers have an urgency to sell off their old property and may be move to a bigger house or a new location. So, you can draft a quicker deal with them, then the non-emotionally centered negotiations for the distressed properties.
Stage 4: Too many suggestions can lose you the dream home
With so much of real estate information available on the web as well as the news channels, everyone seems to have become a real estate expert. But most of the information is generalized and based on the current trends and there is no customization in it. This is why it might not be applicable for the particular home you are thinking about. There are many people who want to purchase their dream home but have no idea about the property to opt for. So, they ask around for suggestions and most often they are advised: “You are paying too much for the property!” Suggestions might come in on how you should bargain a lot more and reduce the asked amount by a few lakh. Paying heed to such under researched suggestions might end up blowing the deal. You should rely solely on an experienced real estate agent to place a smart offer in terms of price.
Stage 5: What is the need of property inspectors?
First time home buyers judge a property against certain requirements and conditions that they may have listed before the inspection. On the basis of this, a property either passes or fails. But there are many other details and conditions that should be considered before investing in a property. Property inspectors do not just point out things that need to be repaired; their reports incorporate areas of the property that would require constant maintenance, comprehensive electronic reports, and other important need-to-know information. That is not all; the inspector would show you the faults in plumbing or wiring physically if you are present during the inspection. They would point to things that require repairs, state of the features and the costs associated with maintenance of the house. The home inspection reports often help in avoiding future conflicts and save the homeowner a lot of money.
With the help of above given facts and your steadfastness, we hope you will find your dream home without facing much hassle.