4 Questions to Ask Before Buying
Whether you’re a first-time homebuyer or a seasoned real estate investor, buying a home is an exciting process. However, there’s also a lot to consider when you decide to buy. So before you begin your search for the perfect property, here are four questions you should ask yourself.
What do I want?
Take the time to figure out what type of property you want to buy. From single-family homes in Milton to condos in Atlanta, there are many different options on the market and it’s important to choose the type that best fits your needs. Figuring out the town or neighborhood you want to live in is equally important. While a property might have all of the amenities you’re looking for, factors like crime rate and proximity to highways can impact the overall home-owning experience. A good idea is to list out and prioritize your needs (e.g. large backyard, great school system) before you begin your search in Georgia.
What can I afford?
The rule of thumb is that you should never spend more than 30% of your monthly income on a mortgage payment. An alternate rule states that you can afford to buy a property that runs about two-and-a-half times your annual salary. For a more tailored look at what you can afford, use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.
Am I financially prepared?
A few months before you start searching for a home, review your credit history and make sure it is in good standing. Get copies of your credit report, ensure that it’s accurate, and fix any issues you discover. It’s likely that you’ll also want to get pre-approved for a home loan, which will put you in a better position to make a serious offer once you find the right property. Pre-approval from a lender is based on your credit history, debt, and income.
How do I make the best bid possible?
Do your research! Your opening bid should be based on the sales trends of similar homes in the area. So before making your opening bid, ask your agent to provide you with selling prices of comparable properties. A Comparative Market Analysis, CMA, will provide you with the details of homes sold during the last 6 months, or whatever time period is specified, including days on market, seller paid closing costs, sales price and date of sale. Other important factors to consider are any upgrades made to the comparable homes, age of roof, etc. Your agent can provide you with these important details so you can make an informed offer.
What do I want?
Take the time to figure out what type of property you want to buy. From single-family homes in Milton to condos in Atlanta, there are many different options on the market and it’s important to choose the type that best fits your needs. Figuring out the town or neighborhood you want to live in is equally important. While a property might have all of the amenities you’re looking for, factors like crime rate and proximity to highways can impact the overall home-owning experience. A good idea is to list out and prioritize your needs (e.g. large backyard, great school system) before you begin your search in Georgia.
What can I afford?
The rule of thumb is that you should never spend more than 30% of your monthly income on a mortgage payment. An alternate rule states that you can afford to buy a property that runs about two-and-a-half times your annual salary. For a more tailored look at what you can afford, use an online mortgage calculator to see what your monthly mortgage payments would be if you bought a home today.
Am I financially prepared?
A few months before you start searching for a home, review your credit history and make sure it is in good standing. Get copies of your credit report, ensure that it’s accurate, and fix any issues you discover. It’s likely that you’ll also want to get pre-approved for a home loan, which will put you in a better position to make a serious offer once you find the right property. Pre-approval from a lender is based on your credit history, debt, and income.
How do I make the best bid possible?
Do your research! Your opening bid should be based on the sales trends of similar homes in the area. So before making your opening bid, ask your agent to provide you with selling prices of comparable properties. A Comparative Market Analysis, CMA, will provide you with the details of homes sold during the last 6 months, or whatever time period is specified, including days on market, seller paid closing costs, sales price and date of sale. Other important factors to consider are any upgrades made to the comparable homes, age of roof, etc. Your agent can provide you with these important details so you can make an informed offer.