Buying a home is a significant financial decision and a time investment. Whether you’re a first-time buyer or a seasoned investor, having some inside knowledge can help you secure the best deal, avoid preventable mistakes, and make the overall process go smoothly. Here are some expert homebuying tips that will give you an edge in today’s competitive market.
Get pre-approved before you shop
A pre-approval letter from a lender shows sellers you’re a serious buyer, giving you an advantage in a competitive market. If you plan on buying a house with all cash, you must have your bank’s proof of funds (POF) letter. This letter proves you have the necessary funds to cover the purchase and closing costs. Some sellers won’t let buyers tour a property unless they have an approval letter or proof of funds. Pre-approval also helps you understand how much home you can afford, so you don’t waste time looking at properties outside your budget.
Buying tip: Work with multiple lenders to compare rates and terms. Even a slight difference in interest rates can save you thousands over the life of your loan.
Work with a local real estate expert
A real estate agent with hyper-local knowledge can provide invaluable insights. They can give you insight into off-market listings, help you negotiate effectively, and guide you through complexities during the buying process.
Buying tip: Choose an agent who specializes in the neighborhood you’re interested in. Ask for their track record, recent sales, and client testimonials.
Look beyond online listings
Offers have often been made once listings appear on common home-searching apps. However, some of the best listings never make it to the apps in the first place, as sellers’ agents may be sharing their listings within their private networks.
Buying tip: Let your agent know you’re interested in pocket listings (homes for sale but not publicly advertised) or homes that haven’t been listed yet.
Know the seller’s motivation
Understanding why a seller is moving can give you leverage in negotiations. A seller in a hurry to relocate may accept a lower offer for a faster closing, while a homeowner who has received multiple offers may only entertain the highest bid.
Buying tip: Ask your agent what’s driving the sale and tailor your offer accordingly. A flexible closing date or waiving certain contingencies could sweeten your offer.
Factor in all costs
In addition to the purchase price, homeownership comes with additional expenses. Factor in the homeownership expenses that go beyond the cost of the home, such as property taxes, homeowners insurance, maintenance, and HOA fees (if applicable).
Buying tip: Before you make an offer, create a detailed budget that considers all potential costs so you avoid any financial surprises.
Be ready to walk away
It’s easy to get emotionally attached to a home, but making an impulsive decision can lead to buyer’s remorse. If a deal doesn’t feel right or stretches your budget too thin, be willing to walk away.
Buying tip: Set non-negotiables before you begin your home search. If a home doesn’t meet your must-have criteria, keep looking.
Consider the timing
Spring and summer are peak homebuying seasons, meaning more competition and higher prices. Try to buy in the fall or winter when there’s less demand, and sellers may be more willing to negotiate.
Buying tip: If you must buy in a hot market, be prepared to act quickly. Have your finances in order and be ready to make an attractive offer.
