Whether you’re a first time home buyer or just in the market for a different home, here’s a list of suggestions for you to think about.
DO make a list of the “must haves” and “don’t wants” for your ideal new house. DO think about the styles of homes that you’d consider (colonial, ranch, bi-level, etc.). DO think about the amount and type of property that you’d like (large or small, with or without privacy, etc.). DO investigate the quality of the town’s school system if you have school age children (the NJ Department of Education rates schools by District Factor Groups, with “A” the lowest and “J” the highest ranking; see http://www.state.nj.us/education/finance/sf/dfg90.shtml). DO some preliminary searching online at a web site like homes.com, Trulia.com or Zillow.com. DO think of your home as an investment, and look ahead to when you might want to sell it; will your house’s location/features appeal to a wide market or are they attractive to only a very limited market?
DON’T call the listing agent or the name on the For Sale sign in front of a house; the listing agent is working for the SELLER. You want to deal with an agent who works ONLY for YOU; I recommend going with an agent from a different broker than the seller’s broker. DON’T forget to include the total costs of owning a house, including utilities, maintenance, and unexpected repairs. DON’T underestimate the time, abilities and disruptions involved in putting a lot of “sweat equity” into an older home. DON’T forget to look at the size of the electric panel and the age of the heating and cooling systems. DON’T feel bad about asking for a year’s worth of heating and air conditioning bills, especially if you’re considering an older, poorly-insulated house.
DO know what your credit score is, and do everything you can to raise it; the interest rate for your mortgage will be affected by your credit rating. DON’T go to just one mortgage lender; shop around for the best rates. DO get a letter of pre-approval (not “pre-qualification”) from a mortgage lender to show the current owner that you’re serious and you can afford to buy a house at that price point. DON’T just look at 30 year mortgages; although the monthly payment will be higher with a 15 year mortgage, you’ll have a lower interest rate and you’ll save thousands of dollars in interest charges over the life of your mortgage. DO think about living “below your means”; remember you’re going to want to save money for college, retirement, vacations, etc. DON’T make any large purchases before you close on the house; many lenders will recheck your accounts just before the closing date.
Finally, DO work with a Realtor who listens more than he/she talks; he/she may be the local expert, but YOU are the one who knows exactly what you want/don’t want for your new home.