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Are You a First-Time Homebuyer or Investment Buyer? Read This Before You Dive Into a Home Purchase
Buying a home is one of the most exciting steps you can take in life. While it comes with significant financial investment and various responsibilities, it’s also thoroughly rewarding to own a home. Whether you’re a first-time homebuyer or are purchasing an investment property, however, it’s essential that you go through the process the right way. Keep the following tips in mind as you navigate the process of purchasing a home.
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Hire an Agent
The first thing you need to do is hire a good real estate agent. From house-hunting to negotiating with sellers to handling the closing, Century 21 MK Realty can walk with you through the entire process. Before hiring a real estate agent, however, schedule a meeting so the two of you can get to know one another and they can discover what, exactly, you’re looking for.
Estimate the Value
Whether you’re purchasing your first primary residence or taking the jump with an investment property, you should get a feel for the expense you’re considering. Start by using an appraisal calculator for a ballpark figure. Or, you can start using websites to learn more about the local market; in Brooklyn, for example, home sales averaged $999,000 over the past 30 days. However, bear in mind that in order to find the actual value of a property, you will need to get a true appraisal performed.
Consider a Short Sale
During your house-hunting, keep an eye out for short sales, which basically means that a home’s outstanding mortgage balance is higher than its current market value. Landing a short sale can help you stretch your budget significantly, and it generally involves less risk than purchasing a foreclosure. But keep in mind that short sales can take months to close, and you might have to get some major repairs done.
If you are buying a primary residence, HGTV points out that you will want to make sure the neighborhood is a good fit and that you are comfortable with the home’s proximity to work, schools, and essential business establishments. If you are purchasing an investment property, particularly if it’s a vacation home, make sure there are plenty of nearby attractions (e.g., entertainment, shopping, dining) for tenants/guests to enjoy.
Save for a Down Payment and Closing Costs
It’s good to plan to pay at least a 20% down payment on your first home or investment property. With a primary residence, this will help you to avoid private mortgage insurance (PMI), which can add significantly to your monthly payment. With an investment property, even if you qualify for a lower down payment such as 15%, that’s more money and interest that you have to pay later.
Factor in the Recession
If you’re buying during a recession, you might realize that there are some great deals out there. It’s true that recessions usually lead to lower home prices, but it’s important to be cautious. For example, make sure you are comfortable with your job security over the next few years before purchasing a home. And if you come across a foreclosure that is priced super low, make sure it’s not going to take too much work to get it in shape.
Purchasing a primary residence for the first time or buying an investment property is a big step to take. To make the best decisions, be sure to hire a good agent, explore your options, and make sure any home you’re considering is in a good location. Lastly, set aside money for a decent down payment and closing costs, and take any extra precautions when buying during a recession. Ensuring your experience is a positive one protects your finances and puts you in the best position for success.
Authored by Suzie Wilson, Happierhome.net