For most people, buying a home is the biggest purchase of their life and one of the most exciting yet scariest things they will ever do; exciting because of the ownership and having a place that is truly yours but scary but it's an investment and usually never a short-term commitment. The housing market is on the up and inventory in New Jersey is especially low. If you're planning on buying a house soon in New Jersey, you can't miss these tips.
Image Source, Pixabay User PaulBR75
1. Know how much you can afford and not just what the mortgage company tells you can afford.
You don't want to be house poor, a term that Investopedia defines as "a person who spends a large portion of his or her total income on home ownership including mortgage payments, property taxes, maintenance, and utilities." Investopedia also notes that house poor individuals are short of cash for discretionary items and tend to have trouble meeting other financial obligations like vehicle payments.
After factoring in mortgage payments, taxes, utilities, possible PMI, and other expenses associated with home ownership, you need to realistically see how much money you will have left over from your pay check on a monthly basis.
2. Narrow down exactly what you want and which towns they are in.
In this competitive housing market, it's helpful to know exactly what you are looking for in a home and where you want to live. Some say location is everything since you can always change the design of the house but can't ever change the location unless you move. Narrowing it down may take a bit of time at first and you might need to see several places before getting a feel for it but it's helpful to make a checklist as you get a taste of real estate. Here's an example of where to start with your checklist:
3. Choose a reputable local realtor.
It can be helpful to have a realtor who knows the area(s) you plan to target well. They can give you insider information on the outlook of the area, would typically be more available on shorter notice to show you homes, and would have a better understanding of the local market.
When choosing a realtor, bestnjhomes.com suggests looking at: experience, buyer representation, education, and whether or not they sell full time.
4. Do you own research and don't rely solely on what your realtor says.
Use your trusted realtor as a resource but be sure you always do your own research. You can sites like Trulia and Zillow to compare comps. Sometimes a realtor will say "don't bid too low as to not offend the seller," or "put your offer in right away!" While the market is competitive at this point, at the end of the day you have to do your research and trust your gut when it comes to bidding. Don't worry about offending the seller, however, if you do bid too low and there are multiple offers, you could be out of the running.
5. Get pre-approved.
Despite what your budget tells you can afford, a mortgage lender might not agree. Getting pre-approved is an important part of the home buying process. In addition, getting pre-approved is helpful so that when you find a house you love, having that pre-approval letter can help you get the home over a different buyer and move you through the process faster.
6. Prepare yourself mentally.
I've gone through the home buying process and in the end after we got the home we now love, it was worth it. But, while I was in the process, it was to say the least - awful. Buying a house can be time consuming and stressful. It can be hard to not get attached to a home before it's officially yours. Trust me, you'll save yourself heartache if you prepare yourself mentally for what could be a long road and don't get attached. There will always be another home!
7. Choose an inspector.
Unless you are prepared to buy a home as is (typically homes that need a lot of work or are under foreclosure status are more likely to be sold as is), it's always a good idea to choose an inspector and have an inspection done before you finalize your purchase. An inspector can find problems like mold or structure damage that are not so easy for the normal eye to detect.
For more information on buying a home in New Jersey view the State of New Jersey's Home Buying Guide. When you're ready to move in, we'd like to help you choose the best home furnishings! Let us know! Best of luck in your search.
