Buying Your First Home? 3 Things You Should Discuss With Your Real Estate Agent
When you start looking for your first home, it can be easy to become sidetracked with tree-lined streets and wraparound porches. However, investing in real estate is a big deal, and you need to make sure that you and your real estate agent are on the same page. Here are three things you should discuss with your real estate agent, and why it might matter later:
1: Your Preapproval Letter
Wouldn't you be frustrated if you spent weeks and weeks trying to help someone find a house, only to find out that they don't have the money to buy it? To fend off these types of time-wasting scenarios, some real estate agents require their clients to seek a pre-approval letter from their lender.
To become pre-approved, you will need to meet with a mortgage broker to discuss your finances. Brokers typically ask for copies of recent paystubs, tax information, and bank statements. Your lender might also pull your credit to look at outstanding debts and to inspect your payment history.
After your accounts have been analyzed, your broker will issue a pre-approval letter that states the total home loan that you would qualify for. Getting pre-approved can help you to evaluate your own personal financial situation, in addition to showing your real estate agent that you are serious about shopping. After your real estate agent knows what you can afford to pay, he or she can start looking for homes that meet your financial criteria.
2: Your Prioritized Wish-List
After you have a good idea of your price range, you need to talk with your agent about your wish list. Instead of simply jotting all of your must-have items down on a piece of scratch paper, think about prioritizing them, so that your agent knows which things matter most to you. Here are a few other reasons that creating a prioritized wish list is a good idea:
- Narrows Down the Search: Prioritizing your wants can help your agent to significantly narrow down the search, which can speed things up. For example, if you list location as your number one requirement and you know where you want to buy, your agent won't have to waste time showing you houses on the other side of town.
- Helps Spouses to Agree: If you are purchasing a home with someone else, it is important to find a place that both parties love. Making a wish list will help you and your spouse to sort out your disagreements, long before you start driving around to different properties.
- Your List Compared with Reality: Talking about your wish list with a real estate agent might also help you to determine if your list of must-haves is realistic. An experienced agent would be able to tell you if you can get what you want, or how much more you would have to have to buy the home of your dreams.
As you form your wish list, remember that you might have to make a few compromises unless you have an unlimited budget.
3: Your Timeline
You also need to discuss your personal home purchase timeline with your real estate agent, so that he or she can move things along. Here are a few ways that your Realtor might be able to help:
- Deadlines: Do you need to be out of your existing home or apartment by a certain date? If you are under the gun, your agent might be able to help you to streamline the process so that you can be on your way.
- Negotiations: When you find a place that you love, your real estate agent can put time limits for offers and counteroffers, so that you don't have to wait as long for answers.
- Mortgage Dates: Your agent can also request short inspection periods and close closing dates, so that you can stay within your timeframe.
Taking the time to go through the details carefully with your real estate agent might help you to find a home that you will love, without a lot of extra hassle.
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