Shopping for Your New Home
Shopping for a new home can be stressful, but it can also be great fun. The following sections can help you understand some of the ins and outs of shopping for your new home. And don't forget to visit the government's Ginnie Mae website. There you'll find a Home Ownership Information Center that can give you plenty of detail about home ownership.
Getting Pre-Approved
Pre-approval means that you're definitely going to qualify for a mortgage if you buy a house in a particular price range. Sellers like pre-approved buyers because the sellers have the assurance that if they accept a pre-approved buyer's bid, the deal will very likely go through. Accepting a bid from a buyer who isn't pre-approved doesn't carry this same guarantee.
Note that pre-approval is different from pre-qualification. Pre-qualification isn't worth the paper it's printed on — it just means that the lender is eager to find out more about you and decide whether you're a worthy credit risk.
The house you buy should be relatively soundproof; have a friend walk upstairs while you're downstairs and talk out loud from an adjoining room with the doors shut. Also look for heavy doors, insulated windows, and quality flooring. Finally, look for a house that, in the last five years, has received a new roof, furnace, and windows.
Working Alone or with a Realtor
If you're a first-time home buyer, you probably want to use a realtor, who will show you a variety of homes in your price range. Working with a realtor isn't mandatory, of course, and some seasoned home buyers often don't use them unless they're trying to buy a house in a different city or in a very short time frame.
Keep an eye on interest rates before deciding to move. The Internet can help you track interest rates over the last few months, and that information can help you decide what a good rate is and whether to lock in now or wait.
Making an Offer
When you find the home of your dreams, you need to make an offer on the house.
In some areas where housing is in great demand and prices are exorbitantly high, sellers won't even consider an offer that isn't at or above the asking price (that's the price advertised). But in many areas, offering 5 to 10 percent less than the asking price is standard practice. An experienced realtor can shed some light on which type of offer you should make.
Whatever you do, don't buy a poorly built house in a bad location to save money. If you choose a bad location, you're likely to have a hard time reselling the house in the future. If you buy a house that's in need of substantial repair or was made with cheap components, you'll end up being overloaded with repairs and maintenance.
Even if you submit an offer at or above the asking price, it's still not guaranteed to be accepted. Sellers can pretty much do whatever they want with offers — except discriminate against you on the basis of ethnicity, gender, or religion.
When you write up an offer, be sure to make the sale of the house contingent on the following:
Selling your existing house (so you're not stuck with two houses)
A clean inspection (or that defects found during an inspection will be repaired by the seller)
A clear title (that no one else actually owns the house)
Obtaining financing (so that you're not legally obligated to buy the house by paying cash for it)
Including everything you list in the offer (Do you expect the sellers to leave the appliances, curtains, and wooden flower pots on the porch?)
