New Year’s Resolutions: Buying a Home in 2022
While many people set traditional New Year’s resolutions like exercising, losing weight, reading more, etc., you may be reaching for new heights by setting the lofty goal of becoming a homeowner in 2022.
If buying a home tops your resolution list, here are some tips to put you on the right path.
Consult with a local expert
A great way to start is to contact a professional REALTOR® to have a preliminary discussion, ask questions, and set expectations.
When searching for a REALTOR®, interview at least three agents before selecting the one you’ll work with. Ask friends, family, and neighbors for referrals — word-of-mouth recommendations are often the best and most reliable way to find an agent.
REALTOR® Sean Gardner with the Thornton Realty Team of Coldwell Banker Hubbell BriarWood says meeting with an agent early in the process is extremely beneficial, especially considering today’s fast-paced, competitive climate.
“The market shows no signs of slowing down, so buyers need to be educated and ready,” he said. “It’s important to discuss strategy ahead of time…the maximum amount you are willing to spend, how offers should be structured, the terms you are willing to accept, etc. Things move quickly, so you and your REALTOR® need to be on the same page.”
Get your pre-approval letter
One of the first things your REALTOR® will suggest is that you meet with a local lender to discuss finances and get pre-approved. If you don’t have a lender in mind, your agent can provide referrals.
“We have relationships with lenders we’ve worked with successfully in the past, but remember, the lender has a legal obligation to work for you, not for us,” said REALTOR® Shara Grachek with Howard Hanna Real Estate Executives. “This is the biggest purchase you’ll likely ever make, so be sure to partner with a lender who takes the time to talk through your options, answer all your questions, and most importantly, someone who keeps your budget top-of-mind and helps you stay within your financial comfort zone.”
Remember, just because you’re approved for a certain amount, doesn’t mean it’s what you should spend. Most financial advisors suggest that your mortgage payment shouldn’t be more than 25-30% of your monthly income.
Grachek adds that it’s especially important to meet with a lender early if you have any concerns that may hold you back from purchasing. A low credit score, a blemish on your credit history, a low down payment, etc…. a professional lender can help you navigate these issues.
“So many people sit on the sidelines because they don’t think they can afford to buy, but after speaking with a lender, they’re surprised to find out it’s possible,” said Grachek. “If for any reason you don’t qualify for a mortgage now, your lender can help put a plan together to get you there.”
Reconsider your “must-haves”
You probably have an idea of what you’re looking for in a home. But it’s important to examine your wants and needs and know that you may have to make some compromises in today’s market.
Start by separating things that are non-negotiable from those that would be “nice to have.” Location, a certain number of bedrooms, or a large yard may be features you aren’t willing to sacrifice. But you might be able to live without a finished basement or a fully updated kitchen.
“If you want to buy in this market, you have to be realistic with your expectations,” said Gardner. “After discussing criteria with your REALTOR®, they can set up a search on the MLS, which allows you to receive new listings as they come up. This will give you a feel for what’s out there in your price range and it may help you narrow down your ‘must-have’ list.”
Start saving
When buying a home, most people focus on the price of the house and the interest rates. While these costs are important, they aren’t the only expenses you’ll encounter on your journey toward homeownership. Down payment, closing costs, inspection fee, appraisal fee, earnest money deposit…some of these costs must be paid upfront while others may be rolled into your home loan.
Understanding what you are responsible for is critical to ensuring a successful, affordable home purchase. Your REALTOR® and lender will explain your out-of-pocket costs, but don’t wait until that discussion to start saving. Not only will you need some money available during the transaction, but as a homeowner, you’ll be responsible for things like home improvements, maintenance, and repairs. If you put together a realistic budget and start the saving process now, you’ll be much better off in the long run.
Be ready to act quickly
A well-located home in good condition will go quickly. Stay in constant communication with your REALTOR®, and if they call you about a listing, be flexible with your schedule. You may need to drop whatever you are doing to tour a home. If you wait for a more convenient time, it could be gone.
“Your REALTOR® also needs to be accessible to you, so when interviewing agents, ask how they handle showings,” said Gardner. “If your agent isn’t available, do they have a fellow team member who can fill in and show you a property?”
These are just a few ways hopeful buyers can prepare for a 2022 purchase. But to ensure you have all the information, circle back to tip number one: consult the experts.
“The knowledge and experience that local REALTORS® have gained in the past two years has been invaluable,” said Grachek. “It’s more important than ever to have a professional on your side. There are critical steps buyers need to take and necessary techniques needed to get offers accepted. To set yourself up for success, partner with a trusted REALTOR® who will be your guide throughout this journey.”
You can find a list of area professionals by visiting the Greater Lansing Association of REALTORS® website at www.lansing-realestate.com.
This article originally appeared on Lansing State Journal: New Year’s Resolutions: Buying a Home in 2022
