So You Think You Want To Buy A Home?
So you think you may be in the market for a home, but you are overwhelmed. Questions are racing through your head: What do I do first? Where should I start? Is it even the right time? Breathe. Relax. And start to plan...
The first step is to take an honest look at your financials and set a reasonable monthly budget. How much per month can you comfortably commit to your housing payment? Keep in mind that your monthly mortgage will be one payment that includes your principle, interest, and prorated taxes and homeowners' insurance. We'll touch more on this later.
Next, it is time to speak with a reputable lender. Ask them to provide you with an approval letter. They may approve you for more than you are comfortable borrowing. That is ok. Ask them to break down your approval amount into an estimated monthly payment. Based on the amount they can guestimate figures to plug in for your monthly insurance and property taxes.
Now that you know where you stand and what you can afford, start shopping! Begin with hiring a reputable real estate agent that is geographically competent in the areas that you want to search. If you do not know a real estate agent ask your friends, family, and co-workers for references. Interview 2-3 agents to make sure they are a good fit for your personality. You'll also want to make sure that they can work with your schedule and will be available when you are. Ask specific questions such as:
- Do you sell real estate full time?
- How long have you been licensed?
- What markets are you an expert in?
- What, if any fees, will you charge me to purchase a home?
- What is your experience with foreclosures? Short sales? FHA regulations?
- Do you have a list of references that we may speak with?
Doing your homework in advance and securing a professional agent that you can trust will help the process go smoother with less bumps in the road.
Next your agent will help you set some search parameters to find your ideal home. How many bedrooms and baths do you need? What style do you prefer? Basement? Central Air? Specific neighborhood features or location? You can research specific neighborhood trends at www.HomeValuesInLakewood.Info. Once you fine-tune the search it is time to start looking at the properties.
Once you start looking at homes be prepared to make a decision immediately. The local market has begun to turn dramatically from a buyer's market to favor sellers. The house you "sleep on" today may be gone before tomorrow ever arrives! Currently there are only 106 single family homes for sale in Lakewood. And although the average time on market is 115 days, the trend has been for quality homes that are priced fairly to sell quickly. In fact, there are currently 93 homes under contract in Lakewood. The average time on market is only 75 days!
So, is this the right time to buy? If your finances are in order, and you are approved by your lender for a mortgage, then the answer is YES! Since January there have been 157 single family homes sold in Lakewood. The same period last year saw 156 homes sold. The difference is that homes sold this year are getting about 2% more in Sales Price vs. List Price. The average sale is up nearly 4.5% compared to the same time last year! Even market time is down this year, with homes selling an average of 11 days faster than the same period in 2012.
In addition, mortgage interest rates are on the rise. The 30-year fixed rate mortgage is now over 4%, it's 5th consecutive weekly gain. It is now about 18% higher than the record low in November of last year. The increase accounts for about an additional $30 per month for each $100,000 borrowed. The prediction is for rates to continue to increase over the next year or so, meaning your purchasing power as a buyer decreases.
Now's clearly the time to do your homework and position yourself to enter the real estate market and secure your ideal home!
Chris Bergin is a licensed real estate agent with Prudential Lucien Realty in Lakewood and can be reached at Chris@ChrisBergin.com.