A recent CNN Money article summarized movement in the housing market so far in 2015. They stated that:
“On a national level, 40% of homes moved off the market in the two-month period, a slight increase from 38% during the same time period in 2014, the report showed. On average, lower-priced homes in the fast-moving markets sold the quickest, with half still on the market after two months. This means buyers, especially first-timers, need to go into their house hunt prepared”, advised Ralph McLaughlin, housing economist at Trulia.
LearnVest’s Christine Ryan Jyoti takes a similar stance in an article published on the Fox Business website:
“This will be a competitive home-buying season—so if you snooze, you may lose out on that four-bedroom colonial you’ve been eyeing.”
So, what does “being prepared” for house hunting mean?
In general, the home buying process can be much more efficient if you do a little bit of homework in advance. For most of us, crunching numbers isn’t as much fun as looking at houses, but it can save a lot of time and heartache down the road.
Especially as we go into the summer home buying season, we recommend four key steps that will focus your house hunt and prepare you to act quickly when you find the house you want.
- Know how much house you can afford.
A rough guideline is that most families can afford a mortgage of between 2 – 2.5 times their gross income – but exactly what you can afford will depend not only on your income, but your other monthly expenses. Simple tools like our online calculator can help you estimate your monthly payments and give you a rough idea of what a mortgage will cost you.
Getting pre-qualified for a mortgage is simpler than getting pre-approved, and it’s usually free. You give a lender basic information on your debit, income and assets, and your lender estimates the amount of the mortgage for which you can qualify. This gives the seller and realtor (and you!) the reassurance that you are not shopping outside of your price range. You can pre-qualify online here.
Be clear about what you want.
Decide with your family in advance which features are “must haves” and “nice to haves”. That way, you can more quickly agree when you find the right house.
Find the right team.
Select a realtor who specializes in the type of home you plan to buy and/or helping clients with backgrounds like yours (especially true for veterans, first-time home-buyers, and down-sizing retirees). If you aren’t sure how to find the right type of realtor, a realtor referral service can help a lot.
With these steps behind you, you will be well-prepared for your house hunt. With just a little work ahead of time, you can save a lot of time and avoid the heartache of losing your dream home to another buyer.