If you’re considering purchasing real estate, you’ll want to carefully choose the real estate professional you work with during the process.
You should commit yourself to working with one REALTOR® who can understand your personal likes and dislikes in homes to make your home buying process easier. Choose a real estate professional who specializes in Boston area residential real estate and who has specific knowledge of Boston real estate and Boston neighborhoods as well as the mortgage markets.
The REALTOR® you choose should listen to you and be interested enough in you to find out about your specific housing preferences and desires. Service first should be the motto of the REALTOR® you choose, with services going above and beyond what you would expect and need. Doing some preliminary investigations online before you begin your home search will make the entire process more manageable and less overwhelming. How should you begin?
Check your credit rating
Check your credit report once a year. It’s a credit healthy thing to do—and now it’s free. Creditors determine whether to give you credit or a loan—and how much you will pay—based on information in your credit history. The national credit bureaus (now called consumer reporting companies) collect information from your creditors about how many credit cards and loans you have and how many accounts are late, overdue, or in collection. They sell information in your file to creditors who determine if you get a loan and how much interest you’ll pay on a credit card. This information about how much credit you have and how you pay your bills can even be used to decide if you get a job, new cell phone service, an apartment lease, or car insurance.
Even if you think your credit history is good, you still should get a copy of your report. You might find anything from old accounts to errors to outright identity theft. You shouldn’t be the last to know what’s in your file. That’s especially true now that you can get free copies of your credit reports from the three major consumer reporting companies (Equifax, Experian, and TransUnion).
Pre-qualification and pre-approval on a mortgage
You can improve your purchasing power when looking for a home by making sure you are prequalified or pre-approved by a mortgage lender.
A mortgage lender will evaluate a potential homebuyer’s credit report plus earnings, savings and debt information to get an estimate of the mortgage amount the borrower would qualify for. This is based on documentation the borrower has in hand, or what the borrower tells the lender. The review can take as little as a few hours or as long as a few days.
Prequalification is usually free.
This process goes a step further than prequalifying. Pre-approval means the lender has contacted the borrower’s employer, bank and other places to verify all claims of earnings and assets. In return, the borrower receives a letter stating that he has mortgage approval for a certain amount.
Since you already qualify for financing, pre-approval can speed up and improve your chances of reaching an agreement on the purchase price with the seller.
The only cost for pre-approval may be the lender’s cost of obtaining your credit report.
Once you and the seller agree on a price, you both will sign a sale contract, which will spell out conditions each party must meet for the sale to go through. A closing of the sale generally hinges on both the buyer’s ability to obtain the mortgage loan and the seller’s completion of some home repairs.
Remember if any of your financial circumstances change before closing on the sale of the home, you must contact the lender. The loan prequalification or pre-approval may no longer be valid.
Become an educated buyer:
The internet is one of the best ways to search for homes today. With my website, you can a quick search for homes in Massachusetts, or you can receive daily emails with new and updated listings from the towns and price range of your choice.
- Search the entire Massachusetts Multiple Listing Service (MLS) for all homes, condos, land, multi family, commercial properties, and past solds at your convenience.
- View full listing sheets showing amenities, taxes, lot sizes, beds, baths, rooms, siding, fireplaces, garages, room sizes and much more.
- Get property address and see where the properties are located on MapQuest.
- Check schools and community profiles of your preferred towns.
- Save preferred listings in your own file to view anytime.
- Calculate approximate mortgage payments for specific properties.
Your lender may require you to get an appraisal of the house you want to buy, to make sure it is worth the money that you are borrowing. You may select your own appraiser, or you may ask your real estate broker to help you with this task.
Once you have made an offer on a home, you will need to schedule a home inspection, conducted by an independent authorized inspector. It is extremely important to hire a reputable Massachusetts home inspector so that you know exactly what you are buying. Do not hesitate to ask friends, family, and co-workers for advice. If you are satisfied with the results of the inspection, then you can proceed to the Purchase and Sales agreement. If the inspector finds problems with the property, you may want to negotiate with the seller to lower the price, or to pay for certain repairs.
Lenders require that you have homeowners insurance, to protect both your interests and theirs. Be sure to shop around for insurance that fits your needs.
Settlement or Closing
Finally, you are ready for the closing. Be sure to read everything before you sign! You should have both your real estate broker and an attorney present at the closing to ensure that all is in order.
Finally make sure before you buy
Ending up with the right home involves figuring out exactly what features and options you need, want and just as importantly, don’t want in a home. Before beginning your Boston home search, you should make a “wish list” to decide which features are absolutely essential, which are nice “extras” if you happen to find them, and which are completely undesirable.
The more specific you can be about what you’re looking for from the outset, the more effective your home search will be. Also keep in mind, that in the end, every home purchase is a compromise.
Create your own personalized “wish list” and when you’re finished filling it out, share it with your REALTOR®.