Things to Start Now if You Want to Buy or Sell a Home in 2024

Tips on What You Can Do to Set Yourself Up to Buy a Home in the New Year!

If You Want to Buy a Home

Meet With Your Realtor

Finding a REALTOR Ⓡ that you can trust and rely on is paramount. It is best to find a buyer’s agent who is experienced, in both successful home purchases, as well as strong negotiation skills. Having a buyer's consultation early on in the home-buying process is ideal, in order for you to be in the best possible position to purchase a home.  Having reasonable flexibility versus a tight deadline, allows you to take your time to find the home you really want. In most cases, you should avoid using the agent that is listing the home you would like to purchase. That agent has a fiduciary responsibility first to the seller, which can make negotiations difficult.

Meet With Your Lender

Meeting with a mortgage lender early is also a plus, and a local lender is usually better than one found over the Internet. Having a lender that is easy to reach, versus having to go through a chain of customer service reps is a definite benefit. Also, listing agents often prefer a local lender to a non-descript internet lender, when vetting a potential buyer for their listing.  This is especially important when your offer is competing against other offers on a home that you love.  Getting pre-qualified and then pre-approved for a mortgage loan is critical when it comes to shopping for a home.  You will want to be pre-approved BEFORE you go house hunting. You don’t want to fall in love with a home, only to lose out to a contract from a pre-approved buyer.

I can help put you in touch with some of my local trusted lenders to help guide you through the pre-approval process. Connect with me for a list of lenders who have a proven track record of great rates and closing on homes on time.

Build an Emergency Fund

Building an emergency fund lets you have peace of mind that if the unexpected happens, you will be prepared. The general guideline for an emergency fund is 3 months or more of expenses. This would include your future mortgage payment, insurance, utilities, and other living expenses. Murphy’s law states “Anything that can go wrong will go wrong.” Though we don’t like to think about potential emergencies, generally, it is best to prepare for the worst but hope for the best. You will be glad you did if a true emergency does arise.

Save for Your Down Payment

Your down payment is separate from your emergency fund.  You should save at least 5% to 20% or beyond of your intended purchase price for your house down payment.  The more down payment you put down from the beginning, the lower your mortgage payment will be.  Also putting 20% or more down eliminates the need for Private Mortgage Insurance or (PMI).  PMI is insurance that protects lenders against loss if a borrower defaults and is generally required if your down payment on your new home is less than 20% of the mortgage amount. Simply put, if you are paying less than 20% down payment, you will be paying PMI in addition to your mortgage payment.  PMI stays in place until you’ve reached 20% equity in your home, at which time you can request it to be removed. PMI is usually canceled automatically when you’ve reached 22% equity. Check out some of my tips on the home closing process!

Pay Off/Pay Down Debt

Qualifying for a mortgage depends on a number of factors, one being your debt-to-income ratio. This figure compares how much money you owe (your debts) to how much money you earn (your gross (before tax) income). Every mortgage lender has their own guidelines as to what is acceptable DTI, but the lower you make yours, the better. A common rule of thumb is the  28/36 guideline when it comes to reasonable debt. Your mortgage and home-related expenses (property tax, insurance, utilities) should be no more than 28% of your income. Those total expenses PLUS your credit card debt, car loans, and additional liabilities should not exceed 36% of your income.

Work on Credit Score

Another item that is important to qualify for a mortgage is a good credit score.  Again, lenders have different acceptable credit scores as to what will qualify for certain mortgages. Here, it is better to have a higher number. The higher the credit score, the easier it will be for you to be approved for a mortgage, and the more programs will be available for you. Not all credit score levels will be accepted for a mortgage, so it is much better to find out your score early before you want to purchase a home so that you can work on it until you are ready to buy. Knowing what is on your credit report is very important. Sometimes there can be errors that you will be able to correct, but that takes time. Leave yourself plenty of time to address any hiccups on your credit report that can keep you from buying a home.

Get to Know the Area You Would Like to Buy In

Unless you are relocating to an area from out of state, you may have a general idea as to where you would like to live. This area is most likely familiar to you, being close to work, the activities you do, close to family or friends, etc. Sometimes though, the price points of homes in a particular area may differ from what you can comfortably afford. If that is the case, it is a good idea to have more than one option for the area in which you would like to live. Make your list of must-haves and a list of wants, and know the areas you are willing to compromise on, just in case. Especially if you are buying a home with another person, it is good to be on the same page as to what is important. Depending on the housing market, or the time of year, you may need to compromise in one area or another. In house hunting, some common (and important) items to discuss are location, condition, price, or features. Rank these in order of importance. Ask yourself, is it more important to be in your target area, and compromise on the number of bedrooms or condition, or would you rather be in a move-in ready home outside of your target area?

If You Are Selling a Home

Meet With Your REALTOR Ⓡ

Finding a REALTOR Ⓡ that puts your best interest at heart is paramount to a successful listing. Your agent can help put a plan in place with a timeline that is comfortable for you. They can also discuss marketing your home in the best light possible, arranging for professional photography, and staging (if needed). Your listing agent should be known for savvy negotiations, proven marketing strategies, and a commitment to high ethical standards.

Declutter

Decluttering a home can be a daunting task. The longer you have lived in your home, the more daunting it can be. Go through every drawer, every closet, every room, and pare down and begin to pack up.  Closet contents should be reduced by half so that potential buyers will feel your home has plenty of storage. Closets and storage areas bursting at the seams, make homes appear lacking in storage. Depersonalizing your home will also allow potential buyers to see themselves in your home.

Complete Projects

The last thing a potential buyer wants to see when they enter your home is unfinished home improvements that they will have to finish. It is ideal if the only thing that the future buyer of your home has to do is move in, or complete projects that they want to do, not need to do. Do you need recommendations on vendors I have worked with on home projects? I can help you get in touch with professional, and reliable local vendors!

Spruce Up Your Home's Curb Appeal

Judgment is often made curbside. Use the time before listing your home to do some projects to heighten your home’s curb appeal. Does your home need touch-up paint? Would a new door color be inviting?  How is the landscaping? Give the exterior of your home a once over. If you were looking to purchase a new home, would your current home’s exterior draw your attention - in a positive way?

Decide What Your Next Steps Are

Have you thought about what your next steps are after you sell your current home? When you work with your REALTOR Ⓡ, they can help you with your timeline to move forward and guide you through your next steps. They can put a plan in place to help you locate your new home and then move, timing everything as closely as possible. When you work with me to buy or sell your home, I’ll work hand in hand with you to create a personalized plan that fits your home-buying or home-selling goals, to ensure all of your needs are met.

Curious to see how much your home is worth in today’s market? Use my free home value estimate tool to see what your home could be worth in today’s market!

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