BUYING PROCESS

Hiring a REALTOR

Hiring a REALTOR is a big deal. This is someone who will help you through one of the biggest transactions of your life. Here’s how to find the right fit.

A REALTOR’s job is to advocate for you and save you money during the complicated process of buying a home.

In most cases, the seller covers the buyer agent’s commission.  So there is no good reason not to hire a REALTOR.

Do your research

That said, there is a world of difference between a top agent who consistently closes deals quickly and saves their buyers money, and one who’s in the real estate game part-time to make a couple bucks here and there.

Use a full-time agent who is at the top of their game.

Here are a few things to look for.

You want someone who is a full-time agent, preferably someone who is been in the business a long time.

Check how many deals they’ve done in your area over the last year.

They should be able to demonstrate through their results how they have saved other buyers money and helped them close quickly.

Your agent should also have specific knowledge that will meet your unique needs. First time purchasing a home? Your agent should be a first-time buyer whisperer.

A great agent also has relationships across the industry. Does your would-be agent have seemingly endless contacts of all the best lenders, contractors, and inspectors. 

List of questions to ask your real estate agent before you hire them.

Ask for references

When hiring an agent ask for multiple references, testimonials, and/or recommendations.  These can often be found on REALTOR.COM, google reviews, Zillow reviews, or the agent’s website.

Set your expectations

For the next couple of months, you’ll have a close working relationship with your agent, so set expectations and boundaries. 

Talk with your agent about how best to efficiently communicate & work together. Do you prefer text, email, or a quick phone call? How often would you like to check in with them? Will you be working with a team, or will one agent be your main point of contact? 

The more you communicate your availability and preferences, the better your working relationship will be.

Personality compatibility is important

You will be spending a lot of time with your agent over the next few months. Make sure they’re a good personality fit.  Liking your agent will make the homebuying process a lot more enjoyable.

Whatever your needs, make sure you find the right agent with the personality and work style to meet them.

Home financing

Getting a mortgage can be a stressful and frustrating process. Here are a few tips to get ahead of the mortgage game.

Use a calculator to set your home budget

You should set a rough home budget.  Before you go to any lender to apply for a mortgage

Consider you mortgage payment, property taxes, home insurance, utilities, HOA fees, maintenance, and more.  Use a simple home affordability calculator to set a safe home budget and learn more about the expenses you can expect with your new home.

A home budget may not be exactly what you’ll qualify for when you get a mortgage, but it can give you an idea of what to expect.

Preapproval cap, you might not qualify for as much home as you think.

It is all about how lenders calculate income. For example, lenders can not always count your 1099 income toward qualifying you for a home. They tend to look for guaranteed income over variable income.

Please, understand that unless you’ve been earning 1099 income for more than two years, it may not help you qualify for a home loan.

Please budget for closing costs

Closing costs are one-time costs that go along with your home purchase, and you pay them on — you guessed it closing day. And they can really add up, too.

Closing costs typically add up to around 2% to 5% of the total loan amount, and they are paid in cash (a wire transfer or cashier’s check is typically acceptable). They include things like lender and broker fees, plus third-party fees like transfer taxes, escrow fees, the appraisal, homeowner’s insurance, and more.

These expenses come with every home purchase, around half of buyers are totally surprised by their closing costs when it comes time to seal the deal.

To learn more about what to expect from closing costs and calculate what you might have to pay for them, check out our quick and simple closing costs calculator.

Did you know that, in regards to closing costs, you can ask the seller to pay them

Is the idea of paying $15,000 in closing costs making you feel uneasy. In some cases, you can negotiate to have the seller cover your closing costs.

Whether this will work depends on your market and how competitive it is. In very competitive markets, it is unlikely for sellers to agree to cover closing costs, as they tend to get multiple offers from buyers willing to pay their own closing costs.

Conversely, in less competitive markets, or when a home has been on the market for a while without selling, you will have more leverage to negotiate closing costs.

Talk to your agent about the possibility of getting closing costs covered. They will know what is possible and realistic in your market, at your budget.

Some closing costs are even negotiable

Shop around for the home inspection, title and settlement services, and home insurance. This can save you some money on your closing costs versus going with whoever the lender works with as a default.

Lender fees, which can add up to 3% onto the loan amount might be entirely at the lender’s discretion, so ask the lender.

When shopping around for lenders, ask them how much they charge for lender fees, or compare notes when you get a Loan Estimate for your best loan options.

Shop around for a mortgage, it could save you a lot of money

Only around half of homebuyers shop around for a mortgage, so if you do this one thing, you’re way ahead of the game.

Repair your credit, to help save on your mortgage.

Your credit score is one of the biggest determinants of your mortgage rate. Your rate represents the interest you will pay the lender over the life of the loan, and it is by far the largest cost associated with your mortgage.

The best rates that are advertised are only available to certain borrowers who meet strict credit, income, and down payment criteria.

If your credit is lower, you’ll likely pay a higher mortgage rate, and you might even have fewer loan options. If you have excellent credit, you will get a much better deal on your mortgage, saving you thousands over the life of your loan term.

You can check your credit for free

American has the right to pull their credit for free once a year. This will give you a good idea of where you stand, credit-wise, and also help you remove any negative items on your credit report before applying for a mortgage.

Of course, you can always use free credit score aggregator sites like Credit Karma, but understand that these scores can be inaccurate, and you may not be able to get specific information about what, exactly, is going on with your credit — or how to best improve it. Your official credit report is a much better indicator of how lenders will evaluate y