The spring and summer months are typically the busiest times of year for the residential real estate market. Weather is more cooperative, and many families like to move while the kids are on their summer break. In recent years spring has meant more homes on the market, but also more buyers, more competition and a jump in prices.
If you’re in the market for a house this spring, there are a number of steps you can take to try to give you the advantage over other homebuyers, including:
Choose a realtor and get started early. Ask friends and family for referrals, and look to see who the more productive realtors are in your area. Let the person you choose know exactly what you’re looking for.
Get your loan pre-approved. This will give an advantage on several fronts. First, it will be done and out of the way. Second, you’ll know how much the bank is willing to loan you so you know in which price range to look. And third, it shows sellers that you’re serious and ready to buy when you make an offer. Get a letter of pre-approval from your lender that you can submit with your offer.
Figure out how much you have for a down payment. First-time buyers typically make a down payment of six percent on a home purchase, and 24 percent of down payment funds were gifts from relatives or friends. If that’s not an option, there are many loan programs that accept down payments of five or three percent. And don’t forget closing costs, which will often run two to seven percent of the property’s purchase price.
Be ready at a moment’s notice. If you’re in an especially tight market, your realtor will be reviewing new listings as soon as they’re available. If he or she finds something that matches your criteria, you’ll want to look at the house and be ready to make an offer - quickly.
When looking at houses, look at the potential. There are major factors you won’t be able to change like the neighborhood, proximity to work and schools, the basic floor plan of the house (unless you plan on completely renovating), and size of the back yard, among other things. If you’re put off by paint or carpet color or old linoleum floors, envision what the walls will look like with your color of choice and the floors in a material you prefer.
Listen carefully to your realtor or agent about how much you should offer. They should be able to do a market analysis (similar to an appraisal) to see what the home is worth based on recent sales in your area. If there’s competition you may want to offer more than the listing price and you shouldn’t try asking for things like carpet allowances or a long closing date. If you know sellers may have several offers in front of them, you’ll want to make yours the best.
Begin thinking about homeowners’ insurance now. Again get a referral from friends and family and your realtor will have suggestions as well. Begin by making sure your credit report is accurate - credit histories are sometimes used to determine whether a company will insure you, and, if so, at what rate.
Carrie Colby is the broker/owner of Premier Properties in Raymond. They have recently moved to an officer behind their previous location on Route 302.