- GET PRE-APPROVED
To start, how will you know how much you can afford without speaking with first? What is your debt to income ratio? Do you have good credit? These are all factors in your lender’s decision-making when they look into your financial situation. Your mortgage lender will also be able to help you understand the different programs that are available to you or that you may qualify for. Some loans require as little as a 3.5% down payment. Consult with a mortgage advisor at the Community Credit Union!
- PROPERTY TYPE AND WHY
What are you looking to buy? Condo? Townhome? Single Family? Multifamily? It’s important to identify what you are looking for before you hit the market. Otherwise, you will end up all over the place and feeling torn or overwhelmed. Take the time to sit down and write out the Pros and Cons of the properties you think you want. And if you aren’t sure, take a weekend or two to pop into some open houses. Make sure they are different types of properties!
Where would you like to buy? Often times people have plans to buy the home of their dreams, but then end up going through the pre-approval process only to find that their budget is not on par. Once you know your ceiling, you can then really start to picture yourself in specific neighborhoods like Davis Square, Union Square, Teele Square, etc. Some neighborhoods will be outside of your range while others will be well within your range. The best way to get to know a neighborhood is by visiting them in person. I suggest exploring the neighborhood after you’ve seen an open house. Grab a coffee, chat with the neighbors, find out what they love or don’t love about the area.
- FIND YOUR “PERSON” | THE HOUSE HUNT
Find yourself a skilled and reliable agent who has experience with buyer representation. If you have all of your ducks in a row prior to your first meeting, this tells your agent that you are serious about buying and so much so that you went through the “hoops” of getting pre-approved. Pre-approval letters are usually good for 60-90 days. This signals to your agent that you have a window period where you’d like to make an offer. An agent will want to make sure that the time they invest in you will actually lead to a result. Let’s face it, nobody likes to work for free! It’s important to make sure you feel comfortable with your agent. You will have to trust them to represent your best interests and engage with them often throughout the process. Be open and honest with them. If your personalities don’t blend well, I’d suggest moving on to another agent that you do feel comfortable with. If you call me, I’ll meet you for a coffee first!
After you’ve found your real estate professional, the hunt begins! Remember, you will see many properties in any given weekend or go to private showings with your agent during the week. I highly suggest writing up a Pros and Cons sheet after every property to remind yourself why you liked it or hated it. Take pics if there was something that really stood out to you (good or bad)! Reflecting on these later will help you narrow down your criteria even more. It will also jog your memory of each property. It’s nearly impossible to remember all the details of an open house that you attended in the morning by the time it’s the evening. Your head may be spinning sometimes! Even if you don’t use a pen and pad for note taking, be sure to type up a few notes in your cell phone to revisit later.
- INSPECTION CONTINGENCIES
If you can hire an inspector to preview these properties with you, you can make your offer look more compelling to a seller. Or if you don’t want to shell out the cash for an inspector to walk every open house with you, chances are the property you are looking at will hold two open houses. If you attend the first one on your own and find that it’s the property of your dreams, go back to the second open house WITH an inspector. After, you can discuss plans with your agent to make your offer stand out by WAIVING the inspection contingency. Sellers are looking for a headache free and smooth transaction. The fewer contingencies you have, the better your offer looks.
If you end up having to have an inspection, you can decide with your agent on a dollar amount that you are comfortable with WAIVING should the inspector turn back with issues on the property. This will still make your offer appear well rounded. For example, you can decide to waive up to $10,000 in repairs.
- MONEY DOWN
The average buyer usually puts down a 20% down payment. This means they have to obtain a mortgage for 80% of the sale price. In a happening market like Somerville, bids often will go up higher than the asking price. Be careful about aggressive “over asking” offers because the bank will order an appraisal which will assess the property’s value based on recently sold comparable properties. If those comps cannot support your offer amount, you will have to consider whether or not you want to or can pay the difference.
If you can, you can differentiate your offer by putting more money down. Instead of 20%, try for 25% or 30%.
- TO LOVE OR NOT TO LOVE
Lastly, another way to make your offer stand out is to write a personal letter to the seller. Perhaps their kitchen made you envision a large Thanksgiving dinner with your friends and family. Maybe the hydrangea bushes they planted in the backyard remind you of your family home growing up and gave you a sense of feeling “at home” when you walked back there.
If the property speaks out to you, tell them and tell them why. If you can tell the current homeowners something about yourself, it helps them imagine the type of people who will be buying their home. It also makes a more personal connection with the homeowner and gives them something to remember you by instead of just numbers inked on paper!
You may also consider attending the next Community Credit Union First Time Home-buyers’ Seminar. Inquire at the Davis Square branch, next to the Rosebud Diner (617-539-8570 or firstname.lastname@example.org).
If you have any real estate questions at all, please don’t hesitate to connect with me. I can always be reached at email@example.com or by phone 617-953-2750.
Best of luck out there!
Ailen Li | Real Estate Sales | Branch Out Realty | 391 Medford Street, Somerville, MA 02145
Ailen is a real estate agent in Somerville and the surrounding towns. She grew up in Brookline, Massachusetts and knows the greater Boston area all too well. Some may even call her a local expert! Today, she lives in Dorchester with her significant other, two large dogs and their pet bunny. Connect with her if you are interested in learning more about her, what it’s like to have a house trained rabbit or if you’re looking to sell or buy real estate! If you’re curious to know what your current property’s value is in today’s market, you can request a complimentary report through one of her websites here: www.assessmyproperty.com.