Considering that we live in an era of technological growth, you would naturally think finding the perfect home is easy as “1,2,3”; sadly, it is not. While perusing one of the million apps and websites purporting to connect you to the home of your dreams, you may stumble across the perfect home for the perfect price. You go home and contact the agent listed, and they have never even heard of the place. It turns out, it was sold 5 years ago -of course, the price seemed too good to be true! This article will help the reader find the perfect home without relying on super-star deals.
The first riddle to solve, is how much you can actually afford, looking at houses outside your means can be nice for fantasy purposes, but it won’t help you get your perfect home right now.
What’s My Budget?
As a natural result of the 2008 housing crash, lenders are being kept on a tighter leash. The practical effect of this is that lenders are providing fewer and fewer mortgages. This makes financing your home the most important part of finding your perfect place to live.
Your first step is to find a mortgage broker with a good reputation, and ask for what is known as a “pre-approval letter.” In order to obtain this, the bank will have to scrutinize your finances. In order to do this, they will require a credit check, your W-2’s, pay stubs, and essentially every document that will provide them an accurate snapshot of your current financial situation.
A “pre-approval letter” is fundamentally different than a “pre-qualification”, which can be obtained on the internet within minutes. The difference between the two is that the pre-approval letter is the result of the lender’s verification of your finances, whereas the pre-qualification is based on your own answers. Sellers do not care about pre-qualifications, they do care about pre-approvals. After you have been pre-approved, you will have established your budget.
Where Should I be Looking for Houses to Purchase?
Now that you know what your budget is, the next question is obviously “where do I find houses in my budget?” Save yourself a headache, and just start with local agent’s listings; it’s a competitive market, and many agents realize that up-to-date websites are good for business.
Generally, Zillow is not a reliable source, as they generally estimate the home value. Zillow generates its revenue by selling advertising space on their website, thus their goal is to keep you on their website longer… not provide you the best information.
What Kind of Home Does My Budget Buy?
Obviously, your pre-approval dictates where you look for your homes, and what search parameters you utilize. You wouldn’t search for a private jet when you could only afford a used Honda Civic. Looking within your budget also prevents you from getting overly-ambitious and purchasing a home outside your range “just because.”
Find the neighborhoods you enjoy, the ones near everything that matters to you (e.g., friends, family, school, nightlife, your job etc.,) In Los Angeles, finding a home within 30 minutes of your home may not be realistic, but that’s a good benchmark.
You also want to avoid dumping your liquid assets into home repairs, so it is wise to limit your search to houses that were built in the last decade.
Play the Field
Sometimes the best houses go unsold because of a failure on the agent’s end. If the description of the home is up to snuff, but they neglected to post pictures… it may be a good idea to give it a quick drive by. Maybe the perfect home hasn’t sold yet because it didn’t have a great agent. These are the best ways to find a steal!
Don’t be afraid to take your time and find the perfect home.