How to buy a house in 2022: 6 tips from a real estate agent

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As a real estate agent, I regularly deal with many first-time home buyers who share the same misconceptions. Buying a home is hard work — there’s no doubt about that — but I’ve come across a few affirmations that needlessly thwart the plans of home shoppers. From getting representation to financing to the inspection process, a little background knowledge can help prevent costly mistakes.

As a tired and frustrated first time home buyer myself, I soon realized how overwhelming the entire process can be. The tips below will help you navigate your first experience and make it as painless as possible. It’s especially important to keep these issues in mind as the home buying process progresses. Mortgage interest rates Combined costs. Here’s my hard-earned advice on how to buy a home in 2022.

1. Interview agents and lenders before committing

The real estate agent and lender you choose are extremely important to maximizing your home buying experience. You rely on them to complete your purchase, and your choice of agent can have a huge impact on your budget and stress levels.

A real estate agent should demonstrate their expertise before you sign anything. There should be an initial meeting where your needs and goals are discussed. You will be guided through the home buying process and review some possible home options so the agent can gauge your preferences. Remember that you are not obligated to work with them until you sign an agreement. Even if your relationship with your lender isn’t as personal, you’ll want to have a conversation and vet them before you formally agree to work together.

Interview different real estate agents and lenders to gauge their experience and make sure you’re a good fit. Your agent should explain things well, be familiar with the area you’re looking for, and respond quickly and professionally. Above all, you have to trust them. Once you enter into a contract — that is, sign the papers to buy a home — you are legally bound to your agent and lender, and it can be difficult, time-consuming and expensive to change.

How to find a good agent – and what can happen if you don’t.

As Stuart Jones discovered on his way to buying his first home in Philadelphia (Jones asked that CNET not use his real name), moving too fast can have disastrous consequences. Jones in 2010 It overlooked a three-bedroom air-conditioned house built in 1930 – with a facade made of local stone. Eager to sign, Jones got a loaner recommendation from someone he knew and signed a contract with no questions asked.

Looking back, Jones says red flags started popping up immediately: “My first mistake was that my lender said he wouldn’t work with me on a loan if I didn’t use his realtor.”

That real estate agent didn’t provide Jones with the paperwork he needed to make an informed decision. He never signed a seller’s disclosure — a legally required step — that would certainly affect his offer.

Jones also claims that the agent did not make the seller’s special request, which is a breach of his fiduciary duty to Jones. Eventually the agent stopped responding to him.

Jones eventually disclosed his predicament to another real estate agent, who was outraged by the story. “When I see the difference between what a good agent can do and what my agent does – it’s time to look and see what’s out there,” he said.

To find the right realtor, ask local homeowners for real estate agent recommendations and contact a local broker to request interviews with potential agents. The right agent should provide you with a buyer’s agency agreement, which will ensure that both you and your agent have your financial interests protected.

When it comes to choosing a lender, Community Lenders Vice President Jesus Cruz b LoanDepot, says that honesty is the most important quality. “You have to find someone who is willing to take the time — and walk you through every step of the process … and most importantly, the loan officer has to follow through and do what you want,” Cruz said. .

It took Stewart weeks to legally terminate his contract with his agent, and much damage was done. Jones was already locked out, giving up his right to home control and no room to negotiate.

2. Be flexible in your home search

Find a good agent with a proven, open mind—it’s easier said than done to adjust your expectations later. I’ve seen first time home buyers get caught up in their dream home idea and paint themselves into a corner.

Most first-time home buyers are less likely to find their top choice. The more flexible you are, the higher your chances of success. Before you start your search, it can be helpful to rank the features you’re most interested in—this will help you evaluate your options once you start visiting potential homes.

If you are Price from one market, you may need to consider an alternative location. This is where you can get more proactive and get an edge over other buyers by researching new construction on the edge of a hot market or learning about local infrastructure projects on public transit.

Open and closed permits for residential work give you insight into where commercial development is taking place. If you’re willing to hold onto the plans for a few years, you may be able to get a home discount. This approach helps to increase equity in the short term. This information is typically available through your city or county website. Your agent should also help you find this information.

3. Critical: Understand your real estate contract

Real estate contracts are dry and long, but they aren’t set in stone until you sign them. You can negotiate any size when submitting an offer. If something doesn’t make sense, ask for clarification. Remember, if any part doesn’t suit your needs, you can request revisions before submitting the contract to the seller. When in doubt — or to confirm the facts — you should consider the advice of your knowledgeable and experienced agent.

Know your “emergency preferences”. These will determine what inspections and negotiations can be done and in what timeframes, such as routine home inspections, pest inspections, mortgage eligibility, and more.

Jones’ agent failed to fully explain the emergency option, which prevented Jones from entering negotiations. It’s important to familiarize yourself with the contingencies in the contract before you sign, because even if something goes wrong like the Jones case, you’ll still be on the hook. Subject to its terms.

4. A home inspection doesn’t reveal everything

After the contract is signed by both parties, the home buyer usually has a period of 10 to 14 days. Home inspection. Based on the results of the investigation, your real estate agent (or the state’s attorney) may ask for financial discounts or repairs to the contract to alleviate any concerns or potential problems.

A complete inspection report can be overwhelming, especially if it’s an older home. No home is perfect and most problems are fixable. But if you come across something you don’t want to deal with, you can always negotiate or walk away – as long as you’re in an emergency.

On the other hand, regulators are not stupid. You can’t go behind walls or move to inspect the current occupants’ belongings. They are not responsible for any errors or omissions in their reviews.

If you’re looking in a hot market — where homes are selling fast and competition is fierce — you may feel pressured to skip an inspection. If you’re considering that, hire some help: bring someone with knowledge of buildings and systems to the scene. It gives you more insight into the home’s condition and highlights major red flags.

5. You don’t have to put down 20% to buy a house

The traditional 20% Advance payment It has its advantages — such as a lower monthly mortgage payment and exemption from private mortgage insurance costs — and its disadvantages. “There’s definitely a misconception, especially for first-time home buyers, that you need 20% down to buy a home. I hear this all the time from new clients,” Cruz said. But it’s a big hurdle for some home buyers.

And Private mortgage insurance It’s not always a big expense. Generally, PMI charges between 0.5% and 1.5% of the mortgage balance per year, so on a $300,000 mortgage, as little as $125 per month. And that amount depends in part on your credit score, so if you have good credit, it could be reduced to a smaller amount. “Once your equity reaches 20%, you have the opportunity to stop PMI down the road,” Cruz said.

In my own time as a real estate agent, clients were constantly amazed by PMI’s accurate pricing and reviews. Many people thought their fees would be higher than quoted.

Waiting to save for a big down payment is also risky. if so Home prices will increase Exceed your savings rate — not to mention inflation in other areas of life — and you may be hurting yourself by waiting. Although home prices remain stagnant, mortgage interest rates are rising. with It could raise interest rates. To respond until 2022 High inflationThis trend is expected to continue.

A small down payment allows you to have a healthy pile of savings for unexpected repairs on your new home.

6. Finance is not one-size-fits-all

There are also Various loan products Designed for a variety of mortgage applicants tailored to specific financial situations. for instance, FHA loans Allow lower down payments and allow people with lower credit scores to qualify for mortgages. Physician loans allow medical doctors and pharmacists to qualify for 0% down home mortgages with no savings, large school loan balances, and high earning power. VA loansMeanwhile, service members and veterans will have a home without down payment and other benefits. Even conventional loans allow you to put down as little as 3%.

But you should never buy something you can’t afford. For both, remember what you feel comfortable with In advance and every month, because it’s a more important metric than any purchase price you might be pre-approved for. check out “How much house can I afford?“To evaluate your budget.

The path to a new home should be a little clearer now. Start to find out How to budget for your home Don’t get bogged down by the logistics of finding the right home ahead of time. And remember, Home ownership is not for everyone — There are pros and cons to both owning and renting. Before making this commitment, make sure you want to own a home.

The editorial content on this page is based solely on objective, independent reviews by our writers and is not influenced by advertising or affiliation. It is not provided or supplied by a third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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