It's easy to go straight to my office and start viewing your top picks for your new property. One of the biggest mistakes I see is my clients find a wonderful property that meets all their standards and criteria, except they loose it because they didn't have a pre-qualification, or perhaps they have been approved for a certain loan type but the property they want will not qualify for that loan type and another buyer who is prepared gets an accepted offer from the seller. Avoid any unnecessary anguish with these easy peezy starting points from a broker with many years experience.
"If Opportunity Doesn't Knock, Build a Door."
1. First Thing's First
Credit, credit, credit! I don't mean your credit card line, but that invisible credit line we are all judged harshly on. The majors are Experian, Equifax and Transunion. There are many ways to check online, through your bank, your credit card company often has free apps or you are allowed to get straight from the reporting agencies.
2. To Be Or Not To Be?
Now we are in your financial responsibilities and worse of all mistakes! Calm down, it can feel like you are being crushed by a giant rock (like this one on the right). Most credit issues are mistakes that can be quickly fixed. There are many instruction websites dedicated to helping you with your credit and they will help fix it, usually for a fee. You can also do it on your own by making many phone calls to the numbers listed on your credit report. Credit reporting agencies report quarterly typically, which means every three months. Depending on your situation, this part can take the most time. You WANT to be in your best financial position as possible to obtain a property you will actually like.
3. Budget Or Forget It.
Once the godawful invisible credit is sorted, we move to how much to spend on our sanctuary. Remember once we decide how much we want to spend upfront, monthly and yearly, there will be extra costs. Those costs take tons of buyers by surprise. There may be repair costs, cosmetic changes, out of escrow fees (if applicable) and then there is the costs for a re-key (always recommended), home security and of course utilities! No matter how you purchased a property, it is a grand idea to have an extra cushion for any and all unforeseen circumstances. The world and its inner workings are unpredictable, we do our best to give our clients the best but we are not fortune tellers (we truly wish we were).
4. The Stress Test.
This step can be during the credit cleanup, the two are easily combined. The lender is important because they can help with your credit and have suggestions on what to do for your financial position. They will be asking the tough questions, don't lie, they need to know the truth because it comes up in their report later. They want to help, they don't get paid unless the transaction is closed, same as the real estate agents, escrow officer and title officer; The lenders want your obligation to their bank! Negotiate, just because they are a bank does not mean you just pay what they say initially. Check around for lender fees, escrow fees and title fees - all companies charge a different amount and most buyers/ sellers do not notice. Last of all, take a deep breath and remember: It's YOUR money, it's YOUR potential life, do what is best for YOU :)
5. Ready, Set, Frustrated...
We have budget, credit, a pre-qual letter at least and we know who we prefer for our escrow and title. It is finally time to set foot in a desirable property within our criteria! Depending on the market at the time, this part can be easy or it can be frustrating. The Real Estate market at the time you are ready to purchase is very important for both seller and buyer. A seller is always trying to get the most out of their property with the least amount of effort, but a buyer is looking for the best deals with the least amount of effort. This sometimes keeps an offer from being accepted, hence one frustrating part.
After the property has been chosen we will have to write an offer and start the process of signing all the paperwork, or clicking in many cases. Most clients do not read these contracts, BIG mistake. If you do not want to read all the fine print, make sure to do some research on what your obligated for and why. The lender, agent, escrow officer and title officer can explain most items at time of pre-qualification.
"We Never Realize The Value of a Moment Until it Becomes a Memory. "