4 Home Buying Ducks to Get in a Row for 2014

Now, when it comes to putting your own ducks in a row in advance of buying a home, a few things are key. First, start early. Whenever you think you should get started doing the actual prep steps, work backwards about 3 or 6 months before that on the calendar and start then.   Secondly, be bold. I find that many buyers-to-be hesitate to get into the not-so-adorable territory of credit and savings, out of a fear that they’ll learn something that will kill their dreams. The bolder you are about going into scary territory, the faster you’ll learn the truth of what work lies ahead of you – and the more time you’ll have to do what it’ll take to overcome any challenges. Also, just the knowing will make anything scary less so. Here are four ducks you’ll want to start getting lined up and comfortable with now if you hope to buy a home in 2014.  

1. Get a vision. The real estate market is a complex system of constantly evolving dynamics, information and realities. Going in with a clear vision for the outcome you want to create is essential to helping you stay moving in the right direction, especially given that you’ll need to be flexible and make some compromises throughout the process. I encourage you to take a time-out from the busyness of your day-to-day life and devote an hour or an evening to putting, in writing, all the elements of your vision for the life you’ll have – and your family will have – once you move into your next home.

At this stage, don’t be too narrowly focused on what the house itself will look like. Instead, deal with everything you can think of in terms of how you want to experience your daily life, including things like where you work, how you get there, and how much you work – and how you would like this to change over time, and what you want to do with your spare time and money. Getting a vision for this will help you drill down into the more granular details of the specifications for a home that will successfully, sustainably serve as the backdrop for the life you’re trying to create, while allowing you to flex and flow with the realities of the real estate market.

2. Put your team in place. I believe that the agent and mortgage broker you select are two of the most important decisions you’ll make in the course of buying a home. The right agent can create a transcendent experience in which you not only buy a home, but are exposed to possibilities for your life you would otherwise never have even considered. A great agent can coach you, advise you, mediate disputes for you and execute on your action plan with you. A great mortgage broker, similarly, can surface options and issues you would otherwise not have appreciated.

And the opposite is true: being represented by professionals who don’t get you or don’t have the expertise you need can really sour your experience of buying a home.

So, work now – way in advance – to get your team in place. Ask your friends and family members if they have an agent or broker they just loved, and when someone says “yes!” ask for an intro. Check out your list of agent suggestions online: check their Trulia reviews and profiles, review any answers or blog posts they’ve put up on Trulia or elsewhere, follow them on Facebook to get a sense for their approach and personality flavor, and reach out to them via whatever communication medium you prefer (e.g., phone or email). Then book a few meetings and, while you have the luxury of time, get to know them each a bit better, essentially interviewing them for the position of your personal real estate or mortgage advisor. While you’re talking, look for a fit in terms of: the types of buyers they have served in the past, the types of recent successes they have had in representing buyers like you, the areas and property categories in which they have experience, and whether their approach to giving advice and education works well for you. It’s not overkill to check references, either, so ask your interviewees for a few recent references of buyers they have worked with.

3. Credit check yourself before you wreck yourself. I know, I know, you’ve heard it a million times – go to AnnualCreditReport.com (the government-mandated free credit report site) and pull your credit at least a year before you buy. This gives you a chance to review all 3 reports, flag any inaccuracies, dispute them and get them corrected way before your home loan weighs in the balance. It also gives you the opportunity to have your mortgage broker flag any issues that might make it difficult for you to get a loan, so you can work on them with ample time to correct the situation. That might mean paying down some bills, resolving any outstanding collections, making sure you don’t create any new bills and even, in some cases, establishing credit lines.

The challenge here is that we’ve all heard it so much, it’s quite easy to simply ignore this advice. Let me urge you not to do this. I’m not even in the market for a home, but I just ordered my own credit reports just to review them and follow my own advice. I was stunned – stunned! – to see about 7 – SEVEN – glaring inaccuracies. Multiple accounts that had long been paid off were still being reported as open and having balances due, and there was even one account I had never even heard of before! A woman in my office just did the same and realized that someone has been committing identity fraud in her name, opening accounts of which she was totally unaware.

These sorts of findings are concerning no matter when you find them. But if you don’t find out about them until you’re already in love with a home, the 30 days it can take to resolve them can seem like an eternity – and can even be the deal-killer on allowing you to actually close on your dream home. The reality is that sometimes it can take much longer than that to resolve inaccuracies – and it will almost certainly take much longer than that to pay bills down and to execute on other line items on your mortgage pro’s action plan for you.

So, don’t wait until the last minute. Actually, do the reverse: pull your reports asap and spend your downtime over the holidays working through them, disputing anything you need to and calendaring a call with your mortgage pro to get a briefing on what you need to do to present yourself in the best light to lenders.

Side note: For small issues, some lenders can facilitate what is called a rapid rescore, which allows you to dispute and correct inaccuracies within a shorter time frame, for a fee – but you should not count on it eliminating every inaccurate report in a couple of days. Sometimes it takes a couple of rounds of disputes.

4. Cash to Close. Coming up with all the cash you need to close a home purchase simply takes time. And sometimes, it’s hard to know whether you’re truly ready to start your house hunt in earnest without knowing with some precision how much you’ll really need. You might be trying to save up 10% of your target purchase price, which is great, but that strategy overlooks the fact that you might also need to be stockpiling funds for additional fees and costs of closing the deal, like: inspections, appraisals, title insurance, escrow fees, mortgage closing costs and property transfer taxes, to name a few. When you pick your mortgage broker, work with them to get a better understanding of what your savings target should be for cash to close, given what sort of property you’re aiming to purchase and what you can afford to spend on it, from a purchase price perspective.

 

BUYERS:

The home buying process can be bewildering and stressful. We get it. And we’re here for you every step of the way. Our homebuyer’s checklist breaks down the process and points you the tips and tools you need to find your next place:

1.    Figure out your finances.

  • o   Check your credit report.  You don’t want your credit score to hold you back once you’ve found your dream home, so make sure it’s in good standing ahead of time.

Read more: 5 Ways to Clean Up Your Credit

  • o   Figure out how much you would like to spend.  Think through your family’s priorities, your investment strategy, and your monthly finances to settle on a price range.  Check out Trulia’s affordability calculator for help crunching the numbers.

Read more: 4 Mind-Over-Money Strategies to Manage ‘Price Range Creep’  7 More Hidden Costs of Home Ownership

  • o   Find a mortgage lender and get pre-approved for a loan.  Most buyer’s agents and sellers will take you more seriously if you have a pre-approval letter in hand.  For instant, real-time mortgage quotes, try Trulia’s mortgage center

Read more: 5 Unexpected Mortgage Decisions Every Buyer Will Have to Face (and How to Make Them)  5 Questions to Ask Your Mortgage Professional What is pre-approval and why do you need it?

2.    Make a wish list.

  • o   Identify your target neighborhood(s).  You don’t just marry the house, you marry the whole neighborhood, so make sure it’s a good fit for your family’s lifestyle.  For local insights about schools, crime, commute, and more, check out Trulia Local.

Read more: 4 Questions to Surface the Best Neighborhood for You

  • o   Nail down your must-haves and nice-to-haves.  Browse Trulia to get a feel for what’s available in your area in your price range.  Make sure you know what you’re willing to compromise on, what you’re not, and where you and your spouse might disagree. 

Read more:  5 To-do’s When You and Your Mate Want Different Things in a Home 5 Intangibles Every Dream Home Has How much house can you handle?: 3 Steps to a Smart Decision

3.    Find a buyer’s agent.  Now that you know what you want, and how much you’d like to spend, you’re ready to find an agent.  Trulia’s Find an Agent directory allows you to search for someone nearby, check out their areas of expertise, and read reviews from other clients.

Read more: 3 Questions for Finding Your Buyer’s Agent Soul Mate

4.    Go house hunting.  Start pounding the pavement (and the web) to find the house that will be your next home.  Use Trulia to search for new properties and open houses. Create an alert to get new homes sent to you as soon as they hit the market, and “save” homes you’d like to track.

Read more: 5 Insider Secret Stats Every House Hunter Should Know

5.    Make an offer.  Work with your agent to research the selling prices for homes comparable to the one you’d like to buy.  Once you’ve determined a price you’re comfortable with, your agent will deliver the offer to the seller’s agent. After that, sit tight while the seller decides to accept, reject, or counter your offer.

Read more: How to make an offer on a home

6.    Get an inspection.  If your offer gets accepted, you’ll want to make sure you know what you’re buying: an inspection will help you understand the overall condition of the home and reveal any significant repair work needed. After your inspection, you’ll have a chance to go back to the seller and make any adjustments or credits necessary for deal-breaking work.

Read more: 5 Questions to Ask Your Home Inspector All about home inspections

7.    Move in.  Congratulations!  You did it.  Here are a few more tips to help you make a smooth move.

 

SELLERS:

If you’re planning on selling your home next year, now’s the time to start preparing. Selling your home can be a stressful process, but with a little foresight, some smart organizational moves, and the right resources, you’ll be well on your way to a successful home sale. Use this simple checklist to stay on track and get the best deal possible!

Do Your Research

Timing is everything when it comes to buying or selling a home. The national housing market has been steadily recovering, but can vary vastly from city to city. Talk to a real estate professional you trust early on to get their advice and expertise to find the ideal time to start the selling process. They’ll be able to lend insight into where the market is headed and how it may impact your home sale.

Organize & Declutter

When it comes to selling your home, sometimes it’s not about what you don’t have—it’s about having too much! Clearing out closets, paring down on piles, and tossing trash are some of the most cost effective ways to get top dollar for your home. Start these tasks early and take them on little by little to keep from feeling overwhelmed. The goal is to create a home that is open and bright. Consider a storage unit to help get larger items that you’re not ready to part with out of the way.

Make Minor Repairs & Upgrades

 The smallest repairs can sometimes make the biggest impact on your home sale. Visit a local open house or two in your local area. Take note of the little eyesores that you notice, then turn the critical eye on your own home. Does your house need a new coat of paint? Are your bathroom fixtures outdated? These small, budget-friendly fixes can make a big difference when it comes to getting a great offer.

Hire an Agent

The right real estate professional can ease the stress of a home sale. Look for an agent who demonstrates expertise in your neighborhood and has had success selling comparable homes in the area. An experienced real estate agent can help you through the details of the home sale process and can help set realistic expectations for how much your home is worth.

Consider a Pre-Listing Inspection

A pre-listing inspection will cost you a couple hundred dollars up front, but can save you money in the long run. The inspection will alert you to any issues ahead of time—which can be particularly valuable if you have an older home. You’ll be able to fix any minor issues ahead of time or allow a credit for the issue in the home price.

Set a Price

Many sellers have an emotional attachment to their home—as they should—but at times this can lead to unrealistic expectations for the market value of the home. Your agent is your team leader in the pricing game. They’ll be able to walk you through what comparable properties in your neighborhood sell for and can help you settle on a realistic asking price. You should also be open to course-correcting your asking price if the market necessitates it.

Work to Create a Sell Sheet

Your real estate professional will help you create a strong sell sheet, but sometimes you know the best features about your home and neighborhood. Help your agent out by sending them a quick note highlighting your favorite things about your neighborhood and community. The little details may be just the thing needed to get a buyer to pounce.

Get Open House Ready

Your real estate professional will help you create a strong sell sheet, but sometimes you know the best features about your home and neighborhood. Help your agent out by sending them a quick note highlighting your favorite things about your neighborhood and community. The little details may be just the thing needed to get a buyer to pounce.

Prepare Yourself for Success

During the period where you are actively showing your home, you will want to be open house ready at all times. You never know when the best buyers will want to see your home. Even on non-open house dates, it’s smart to keep your home clean, the lawn and garden maintained, and any pocketable valuables out of sight.

Close the Deal

Once you get an offer, finalize negotiations, and get into contract, the hard work is almost over. However, deals can sometimes go south at the final moments. Cooperate with your home’s buyer, appraiser, inspectors, contractors, escrow providers and your local authorities to get your home sale transaction closed smoothly.