Planning on Buying a Home in Northwest Arkansas?
Are you planning on buying a home in Northwest Arkansas? We have compiled a list of 10 best tips for buying a home in this area. These tips will help you get the most out of your money. Here they are:
Tip # 10: Get Pre-Approved for the Home Loan
There is a huge difference between buyers getting pre-qualified and buyers who have a pre-approved mortgage. Almost everybody can get pre-qualified for loan. What getting pre-approved means is that after looking at the financial information of yours, the lender has told you how much you will be able to afford and how much the lender is willing to lend you. You will save a lot of energy and time by getting pre-approved so that you aren’t running around and looking at the houses that you cannot afford. It will also give you opportunity to look around for best deals and best interest rate. You should do some research and learn about points or processing fees, junk fees etc. and ensure that there are no hidden costs in your loan.
Tip # 9: Keep Your Money Where It Is
Moving around money or making huge purchases about 3 to 6 months before buying a home is not wise. Avoid taking big chances with the credit profile. The lenders need to look at you as a reliable person and they will want complete paper trail in order to get you the best loan possible. If you are opening new credit cards, buying many big-ticket items or accumulating a lot of debt, you will have hard time getting the loan.
Tip # 8: Don’t Try to Time the Market
Do not get obsessed with trying to time the market and trying to figure out the ideal time of buying the home. It is impossible to anticipate the housing market. The ideal time to buy is when you find the perfect house and when you are able to afford it. The real estate market is cyclical. You will see it go up and you will see it go down and then back up again. Therefore, in case you are waiting for perfect time, you will probably miss out.
Tip # 7: Bigger Isn’t Always Better
Everyone is attracted to most the beautiful and the biggest house in the area. But when you are buying a house remember that, with houses, bigger isn’t usually better. There is an old proverb in real estate that says don’t buy the biggest, best house on the block. Larger houses usually only appeal to very few people and you don’t want to limit the potential buyers when you want to resell. The value of your house will go up almost the same as that of other houses in the neighborhood. Suppose you pay $550,000 for a house and your neighbor pays $300,000 to $350,000, you will have a limited appreciation in the price of your house. Sometimes even buying worst house in the neighborhood is the best investment decision, because the per sq. foot price of the worst home will be better than that of biggest home.
Tip # 6: Avoid Border Disputes
Usually it is necessary to get a survey done on a house before you buy it so that you are aware of exactly what you are buying. Having the precise knowledge of the property lines will save you from potential disputes with the neighbors. The property tax that you will pay is also likely to be based on the area, so it’s best to have accurate map of the property.
Tip # 5: Remember That You Are Buying a House – Not Dating It
If you buy a home based on your emotions, it will probably break your heart. Falling in love with a house can result in you making a bad financial decision. There is a huge difference between instincts and emotions. Going with the instincts means; you realize that you are getting a really good house for great value. And going with the emotions means; you are obsessed with things like the backyard or paint color. Remember that you should be wise when buying a house as you are making a big investment that will help determine your future.
Tip # 4: Avoid the Sleeper Costs
Sleeper Costs is the difference between home ownership and renting. Many people simply focus on the mortgage payments. They should also be aware of other expenses like utilities, property taxes and dues of homeowner-association. The new homeowners should also be ready to pay for maintenance, repairs and potential increases in property tax. Make sure that you are prepared for the sleeper costs so that you are covered and you don’t risk losing the house.
Tip # 3: The Secret Science of Bidding
There are two things that you need to consider when making an opening bid. The first thing is; what you can afford? And the second thing is; what you really think the worth of the property is? Make a reasonable and fair opening bid. Many people think that they should make a very low first bid. You should make sure that your opening bid is not so low that it offends the seller. The situation of the market matters a lot. You should look at the prices of other homes that have been recently sold in the neighborhood. Get average square foot price of those homes. Sizing up houses on the basis of square foot price is an excellent equalizer. You should also look for things like, if neighbors have any plans of putting new additions like tennis court or basketball court, something which may detract the value of your property in future.
Today many sellers fall behind in the property taxes. Having the valuable information provides you with an excellent card for negotiating a great deal. You can go to the office of the county clerk in order to get the information.
The sellers like to get bids that are oddball numbers and they take such bids more seriously. Nice round numbers sound like all other bids out there. If you are more specific it will give the impression that you have carefully thought and then made the offer.
Tip # 2: Stalk the Neighborhood
Before buying, get a feel of the area at different times. Visit the area at morning and night. It has happened to many homeowners that they thought they’ve found their perfect home, but later they found out that neighborhood was not for them. It is a good idea to drive by property at different hours of day in order to see what is happening in area. Do the regular commute from your potential new house to ensure that it’s something that you will be able to deal with on daily basis. Check the distance of different services like grocery store, health facilities etc. from the house. Even in case you do not have kids, you should research schools in the area as it has a huge effect on value of the property. There can be a difference of 20% in the value of the property located in good school districts vs. the value of property located in bad school districts.
Tip # 1: Hire a Home Inspector for Thorough Inspection
When you buy any car, you check it thoroughly from the inside and the outside and you even get experts to check the actual condition of the car. Same should be the case with houses. You should hire home inspector. It will cost you about $250 but it can potentially save you thousands of dollars. The sole responsibility of a home inspector is to give you information about the house so that based on that information you are able to decide if you want to buy or not. It is really the only way of getting unbiased opinion from a third party. In case the inspector finds some issues with house, you may use the inspectors findings as bargaining tools for lowering price of house.