3 Dos and 3 Don’ts for Home Buyers
Spring has arrived in the Twin Cities Metro and the housing market is in full swing! The onset of warmer temperatures has caused buyers to shed their boots and mittens and start house hunting in earnest. Traffic at Minnesota Property Group Open Houses has been brisk. We are seeing many more first time buyers, move up buyers, and buyers who are coming back after going through foreclosure or short sale experiences, (dubbed boomerang buyers) as well.
According to data published by The Minneapolis Association of REALTORS©, March showed an increase in pending sales of 30% over last year and was the highest level for that month since 2005. Additionally new listings were up 21% over March 2014, but due to avid buyer activity the market advantage is still tipping towards sellers. So, it’s a strong market, an active market, and what I would describe as a “snooze and you lose market” with desirable properties often selling within days or even hours of being listed.
Incredibly low mortgage interest rates are holding steady at least for now, so this is really an awesome time to make your move. However be aware that competition among buyers for desirable properties can be stiff, so as a buyer, to get the edge you need to be prepared to make your move when you find that dream property. Here are my 3 best do’s and don’ts for starting the journey to home ownership in today’s competitive housing market.
1. Do Check Your Credit
Buying a home is a journey, and for most buyers, the first step on that journey starts with looking at homes on the internet and compiling a wish list. I am not saying that isn’t a good idea. Nope not at all. But before you start shopping for a house, do your homework and prepare to have a conversation with a mortgage professional. Once per year you are entitled to pull your credit report for free without effecting your credit score adversely. If you haven’t looked at your credit in the last 12 months, do it, please. Check your report for accuracy, and if you find any errors on your report, fix them. It is also a good idea to know your FICO score as well since lenders use this number to determine your credit worthiness and your interest rate. This post on Kiplinger provides some great information on obtaining your FICO score. So DO make your credit check the first step in the process and DON’T underestimate the importance of knowing your FICO score.
2. Work with an Agent
Don’t go it alone as a buyer, DO get an agent to work with you and be your advisor on this all important journey. An experience Real Estate Professional can help you every step of the way. Not only will they know the Twin Cities Metro communities, but they know the neighborhoods and can help you zero in on searching for homes in the area that meets you and your family’s needs. They can point out advantages and disadvantages of particular properties, assist and advise you in making an offer, and recommend professionals you will need along the way such as mortgage lenders and home inspectors. Purchasing a home can be a stressful but an experienced Realtor who has your best interests in mind can head off potential bumps in the road and make your journey a smooth and rewarding experience.
3. Talk to a Mortgage Professional and Get Pre-approved
There are lots of options available in the home mortgage market and interest rates can vary from bank to bank so sometimes a Mortgage Broker is a good place to start the pre-approval process. If you are already working with a Realtor, they can recommend a couple to you. Once you have chosen your lender, its time to get pre-approved. Buyers often get confused between pre-qualification and pre-approval. Being prequalified simply means a lender has told you how much house you should be able to afford based on the information you have supplied. Pre-approval means you have filled out a loan application, supplied documentation, your credit reports have been pulled and your loan request has been approved by an underwriter. At this point you will receive a written pre-approval with conditions so that both you and the seller can have confidence that you the buyer will be able to obtain the necessary financing to purchase a home. DO make this a priority and don’t wait until you find a property to start this process because if you are not pre-approved, a seller who may be looking at more than one offer may not percieve you as a serious buyer.
There are my 3 do’s and 3 don'ts. Buying a home should be an exciting and rewarding experience and with the proper advice and assistance along the way it can even be fun. As a real estate professional there is nothing more satisfying than seeing my clients happy and secure in their new home! Check out my website under the buyer tab for more useful information. Check out my blog and start your home search on what I believe is a state of the art search engine. Take some 3D tours of my feature listings and please call, email or text me with any questions. Happy House Hunting!