Shopping for a home can be an exciting time. It’s fun to imagine living in this area or that, envisioning what your life might be like in each different environment. But before you get swept away in the excitement, here are some practical tips to keep in mind:
As much fun as it is to look at a variety of houses, it’s important to know what you can afford. Getting pre-approved by the bank will give you a ballpark on what you can afford.
Be Honest With Yourself
Just because you’re approved for a certain amount doesn’t mean you will actually be able to afford it comfortably. Once you have a pre-approval, take a look at your monthly income and expenses. Consider whether or not the number you were quoted is something that fits easily into your lifestyle. If not, mentally adjust the number so you’re not stuck buying a home that leaves you unable to afford anything else.
The price of heating, cooling, water and the like can be a major expense that new homebuyers don’t think to ask about. Find out exactly how much the utilities cost – it’s fair to ask for a monthly average from the seller, presented to you in writing. If it costs $400/month to heat the home, it’s important for the seller to disclose that.
Once you find a home you like, it’s perfectly fair to bid lower than the asking price. In fact, you should. Many homebuyers price their homes expecting that a buyer will offer a slightly lower bid. If you’re paying the asking price, there’s a chance you are paying too much. However, use caution: In some in-demand areas, bidding below the asking price may lose you your dream home. Use your judgment and knowledge of the area when making a bid.