Scottsdale Home Buying Tips

 

Home ownership is a goal for most Americans. But it is also at an all-time low. Millennials are waiting longer to accomplish traditional milestones of American life such as marriage, parenthood, and home buying. As surveys still show strong interest in eventual home ownership, it is likely that the next decade will see an increase in the percentage of home buyers who are looking to purchase a home for the first time. So, here are 3 things to keep in mind and accomplish before you go and try to buy your first home.
First, figure out what you can afford. With the great recession still fresh in public memory, I’m sure you all understand the importance of ensuring that you purchase a home that will be within your financial means. While it can certainly be tempting to go and purchase an expensive and large home, this could leave you very vulnerable to any unexpected financial costs. Even if you do manage to get approved for a loan, if you are spending the bulk of your monthly paychecks on your mortgage, your budget will feel very tight.
Second, figure out what you want. This can be more complicated than you might initially think. Homes are much more than simply their interior and exterior. Sure, it is important to have good ideas about things like size, design, and layout, but you will also want to examine the neighborhood and location. Finding a good home in a neighborhood where you are comfortable can lead to a much better living experience than a great one in a neighborhood that doesn’t match up with your goals. For example, if you are looking to have children, nearness to parks and public areas might be a consideration. Additionally, you should look at schools in the area around your prospective future homes. A bad school can certainly be a deal breaker.
Third, and finally, get your finances in order. This means more than just having a job with steady income. Pay down your loans, and try to make sure that your credit cards are mostly paid off. Avoid purchases that will require a credit check, as this can sometimes hurt your score. Also, collect pay stubs. You will want to not only be able to show that you are making money, but that you have a history of making money. Showing this dependable income can be a huge factor in getting a loan. Finally, save a down payment, to show lenders that you are serious about this purchase.

Scottsdale home buying strategies can be vital as you enter the market this spring in search of a new home. While a home search is always an exciting and challenging one, in what is currently a sellers’ market, it can be especially daunting. Chances are pretty good that a seller will have his choice of buyers and offers from which to choose. That makes it a little more difficult in the event you find “the” home that’s right for you and your family. If you’ve bought a home before, you know the feeling. You’ve searched high and low and visited numerous open houses and finally found that “just right” home that meets all your needs – and is perfect for your budget, too. But, what happens if the seller isn’t as excited about you or your offer as you’d like for him to be? Then what? Let’s look at five Scottsdale home buying strategies that may help you deal with a seller who doesn't necessarily like you or your offer for his home.

Here are some of our recommended Scottsdale home buying strategies

First, remember a seller can refuse a prospective buyer for any reason. While it’s unusual for people selling their homes to be finicky or fickle, it’s not unheard of. Plus, as mentioned above, in a sellers’ market they may be able to afford to be a little more stubborn when it comes to the sales price, the terms, any contingencies, or the closing and move-out date.

Consider these tips in working with a seller in that position:

Hit Them With Your Best Shot.  No, not literally, even though it may be tempting, we’re not advocating violence! What we’re suggesting is that if you submit an offer and suffer through the back-and-forth of counter offers, it could be time to stop playing games and wasting time. Cat and mouse can be fun and challenging, but we're talking about a home here. If you like the home and want it, make your very best offer. At that point – win or lose – you’ve done all you can do – and now the proverbial ball is in the seller’s court to accept or reject your best deal. While they may reject your offer and hold out for a better one from another potential purchaser, sometimes they may rethink your offer a few weeks later.

Keep on Keeping on.  Another of our recommended Scottsdale home buying strategies is to “cut your losses and move on.” While doing so is difficult and often heart-wrenching, sometimes it’s necessary. If the seller isn't open to working with you or negotiating, it could be time to throw in the towel and move on to the next listing. Wasting time, talent, energy and desire on wanting the seller to see the deal the same way you do may mean you’ll lose out on the next “perfect’ home out there – and trust us, there’s always another one waiting.

Live and Learn.  The best coaches in the country – no matter the sport or the level of competition – will say, "…other than preparation and execution, learning from mistakes in competition is very important for the next game." So, when things don’t go exactly as you planned, take a little time to try to figure out what went wrong – and learn from it for the next negotiation on the next house. The more you understand about what worked and didn’t work, the more likely your next transaction will be more successful. Just like most things in life, it’s critical to live and learn.

Don’t Overthink This.  While you’re performing your analysis on the experience you’ve had in negotiating with or trying to work with a seller in buying their home, be careful not to overthink the seller. As is the case with most people – even close friends and family – nobody really knows what goes on inside a seller’s head. Maybe they’re not really ready to let go of their home. Maybe they’re holding out for every single dollar they can squeeze out of the deal. Perhaps they aren't prepared to move and are dragging their feet in an effort to buy time. Whatever the reason, don’t waste precious time trying to figure out the seller and his motivations or desires. Move on to the next property and concentrate on it.

Self-Analysis Can be Healthy.  Scottsdale home buying strategies can be useful – but only if you use them to your advantage and to accomplish your necessary goals. So, remember this: If you keep trying to work with sellers that refuse to cooperate, maybe you’re the problem, not them. Identify a seller who is both motivated and serious about selling his home. Work with them and make the best deal you can. Don’t waste time pining over the “one that got away,” as there are other fish in the sea. Keeping a positive attitude and a feeling of optimism in the face of rejection or disappointment may mean the difference between finding the right home and becoming frustrated. Stay positive and get what you want.

Read more about home buying advice in the section of articles on Scottsdale Home Buying Tips just below our Scottsdale Real Estate Categories in the column to your right.

Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

We’ve assembled a Scottsdale home buying checklist for people thinking of entering the real estate market, looking to buy a house. Let’s take a look at these seven important tips.

1 – Home buying should be for the long haul. Not too long ago, buying houses and turning around and selling them (or “flipping” them) was a popular way to make money. Today, we recommend considering planning to live in the home you buy for at least 7-10 years. Of course, there’s no hard and fast rule. People move where their jobs take them – whether it’s across town or across the country – but give consideration to whether you’ll likely move within the next few years before you decide to buy. For some people, it may be better to rent for a few years.

2 – Do some soul-searching before you decide to buy. Your Scottsdale home buying checklist should include asking yourself a series of tough questions to make sure your heart is in what you’re about to undertake. Buying a home is the single largest purchase most people will make in their lifetime – make sure you recognize that, and treat it importantly.

Scottsdale home buying checklist for prospective purchasers thinking about buying a house.

3 – Ask yourself these questions: Will you choose to start a family soon? Do your needs require a home with a large yard for a growing family or your pet(s)? How do you feel about yard work? Do you like the city better than the suburbs?

4 – Take your time before you buy. Most people tend to jump right into to the home buying pool without testing the water first. Take your time. There’s no hurry. While interest rates are fairly low, the temptation may be to act quickly, but experts say the rates are expected to remain fairly affordable throughout 2017. Use the extra time you allot to make sure your credit score is in the best shape possible and that the other items you’ll need for loan qualification are in order (tax returns if you’re self-employed, source and verification of your down payment, etc.)

5 – Buy within your budget. One of the most important items on your Scottsdale home buying checklist should be to focus on what you can comfortably afford. Remember, mortgage lenders will use your debt-to-income ratio (DTI) to determine whether you qualify for home loan financing. Before you start the home shopping journey, take a look at your DTI. Take the total of all your recurring debt including your proposed monthly mortgage payment (PITI) along with other monthly debt like credit cards and car payments. Divide that total by your gross monthly income. Most mortgage lending experts say your DTI should be 36% or lower. The most important thing to remember is this: Take out the loan and the monthly payment you can comfortably afford, not necessarily the one you qualify for. Making a higher monthly mortgage payment is no fun if you can’t afford to buy steaks for the new backyard grill occasionally. Some experts recommend buying a home you can afford based on one income. That way, should you or your spouse lose their job or get laid off – or elects to become a full-time parent – you can still comfortably pay for your home.

6 – Consider the tax advantages. The tax benefits are a big part of any Scottsdale home buying checklist. Currently, the mortgage interest you pay on a primary residence is tax deductible. So, the tax savings are of huge consequence since you can deduct your home loan interest and your real estate taxes from your gross income. For example, if you earned $75,000 in gross income in 2016 and you paid $10,000 in mortgage interest and your property taxes were $2,000, you could lower your taxable income to $63,000 – saving you a bundle on income tax.

7 – Create a moving account. Another important item on your Scottsdale home buying checklist is to start a move-in fund. Of course, you’ll have to have a down payment, but don’t forget other things like closing costs, moving expenses and other necessities for your new home. If you’ve been renting, for example, you may need to purchase a lawnmower and other lawn care equipment – along with that backyard grill!

8 – You may choose to rent, if you’re not ready to buy. Let’s face it…sometimes it’s not a good idea to buy. Maybe after you review your Scottsdale home buying checklist you’ll realize it’s not the right time. If you’re not ready, don't force it. Rent instead. You’ll be happier, healthier and financially wiser to put it off a year or two until you feel more comfortable. Save your money. Find a better job. Get your finances in order. Do your homework. Then when you’re ready to buy you’ll be that much more prepared.

Read more about home buying advice in the section of articles on Scottsdale Home Buying Tips just below our Scottsdale Real Estate Categories in the column to your right.

Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

Scottsdale home buying advice is usually limited to ideas and tips to help you begin the house hunting process and what to do during each step of that process. Let’s take a look at several things to consider after you’ve found a home and are preparing to close the deal.

So, you signed the contract to buy your home and all that’s left to do now is sit back and wait for the closing day to get here. Right? Well, not exactly. There are a few important considerations to remember on the road to becoming a homeowner – regardless of whether it’s the first time or the fifth!

Don’t let your rate expire

Until your loan is closed and the papers are signed, the interest rate your lender quoted you won’t last forever. Mortgage interest rates can and do change daily. Normally, a bank or lender will lock-in your interest rate for a reasonable period of time in which to close your loan – usually between 45 and 60 days. If the lock expires, you may have to renegotiate and pay a higher rate. Keep a watchful eye out for hindrances along the way that may prevent your loan from closing during the rate-lock period. Keep in touch with your attorney during the preparation of the closing paperwork and let him or her know to alert you if there are any title issues as soon as possible.

Another piece of Scottsdale home buying advice: - it's not your house, yet.

It’s not your house just yet

In some markets, a walk-through of the home before final closing is more prevalent than others. Most real estate sales contracts allow for a walk-through up to 24 hours prior to the closing of the sale. Another piece of Scottsdale home buying advice: take advantage of the walk-through. For your own peace of mind, visit the home with your real estate agent – just to make sure everything’s as expected.

It ain’t over ’til it’s over

The often tedious and time-consuming mortgage process isn't over until the loan is officially closed. Even though you’ve received mortgage loan approval from your lender, in today’s more cautious credit lending environment some mortgage lenders choose to re-verify income, credit or other qualifications just prior to the loan closing. Our Scottsdale home buying advice, therefore, is to not make substantial changes to your financial situation until the closing is over. For example, don’t immediately go out and buy a brand new car for your brand new garage. And, don’t apply for new credit cards or other credit accounts or take a new job – without talking to your mortgage loan professional first. Sometimes even the slightest change to your financial status can alter your creditworthiness or disqualify you from being approved for a mortgage.

Do your homework

When you close the sale of your home, it’s all yours – for better or worse. In most states across the U.S., the law tends to favor the home buyer and requires the seller of the home to disclose any issues with the home and to confirm they have been resolved. In other states, “caveat emptor” – or let the buyer beware – prevails. As such, it’s the buyer’s responsibility to make sure the seller has taken care of any loose ends like closing out building permits, released any liens from the real estate title report and, resolving any other issues that may affect clear title and conveyance of the home to a new purchaser. Our Scottsdale home buying advice… do your homework and know what’s expected in your state.

The anticlimactic closing of the sale

The actual closing of the sale can occur in one of two ways. Most of the time, the two parties – the sellers and the purchasers – may not need to be in the same room to close the deal. The purchasers sign all the loan documents in an attorney’s office or lending institution, and the sellers sign the deed at the title company or attorney’s office.

Some closings, however, occur at a table designed to accommodate the buyers, the sellers, the real estate agents, the attorneys and maybe others who pass the papers around to be signed and witnessed. This process is thought by many to be outdated and old-fashioned in today’s fast-paced, electronic world.

Whichever closing method you experience, just remember with all the hype and build-up that has preceded the day of the closing, the actual closing itself is relatively uneventful, mundane and can be anticlimactic.

Make the process smooth and seamless

So, you've read the Scottsdale home buying advice we’ve provided so far. What else is there to know, to do, or be prepared for? To ensure the smoothest, most seamless and least stressful closing of the sale, do some research and keep an eye peeled for those pesky red flags. With the professional assistance of trusted team members working with you, you can avoid a number of pitfalls that could delay or halt the closing of the sale. Having a qualified real estate agent is a great start. Your agent can refer and recommend you to the mortgage lenders, attorneys, title insurance companies, home inspectors and others. That's the power of using professionals in the real estate industry. They have a network of people and companies they’ve worked with over time in which they have confidence and trust. Tapping into that network will not only save time and money, it will give you the importance of peace of mind and the feeling of accomplishment that should accompany buying a home.

Scottsdale home buying advice is valuable and should be listened to carefully – especially if it comes from experienced, knowledgeable real estate professionals who have your shared interests in mind – to make your home purchase as enjoyable and as successful an endeavor as it can be.

After all, should it really be any other way?

Read more about home buying advice in the section of articles on Scottsdale Home Buying Tips just below our Scottsdale Real Estate Categories in the column to your right. Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.

There are a number of Scottsdale homebuying mistakes that need to be avoided. Let's look at three very important tips that will help you avoid common pitfalls associated with buying your first home. Anticipating your needs will go a long way in assisting you in the process you're about to undertake. In addition, it will help make the experience a potentially fun and rewarding one.

We're reminded of a true story about one first-time homebuyer who had scrimped and saved diligently for several years to accumulate a down payment. However, because he was self-employed he worried whether he would have enough for a sufficient down payment and if he would be able to qualify for a mortgage since he didn't earn a "traditional" salary like most young borrowers who work for somebody else.

Unfortunately, stories and concerns like these occur all too often and can fall into the category of Scottsdale homebuying mistakes to avoid – especially among prospective first-time buyers. The Economic and Strategic Research Group of Fannie Mae recently conducted a survey to better understand what consumers know about mortgage qualification criteria. The findings revealed that roughly 40% of potential borrowers did not know when asked about minimum down payment requirements. In addition, 54% and 59%, respectively, were not aware of minimum credit scores and maximum debt-to-income ratios to qualify for a mortgage loan. The lack of knowledge in these basic areas of mortgage qualification is both surprising and disconcerting. Furthermore, it can contribute to common mistakes first-time homebuyers may make as they try to avoid Scottsdale homebuying mistakes. Now, about those tips:

Scottsdale homebuying mistakes you need to avoid at all costs.

Seek professional advice
The above story about the first-time buyer, we're glad to report, did have a happy ending. The prospective homeowner sought help from a local HUD-approved housing counseling agency who reviewed his credit score, advised him on making some minor changes, and provided him assurance he could qualify for a HomeReady mortgage through Fannie Mae. The HomeReady program allows borrowers to pay as little as 3% for the down payment. In addition, it requires completion of an online education course. With the help of a professional, our first-time buyer was able to qualify for a low down payment mortgage – with his self-employed income – and purchase the home he wanted.

Understand the loan process
Lack of knowledge can be the single most detrimental problem to overcome for any first-time homebuyer. Fear of the unknown is likely the cause of many young buyers remaining on the sidelines when it comes to participating in the homebuying market and avoiding Scottsdale homebuying mistakes. The irony, however, is that in today's informational age there is a wealth of knowledge available to prospective homeowners with just a click of the mouse. Virtually every reputable real estate company and hundreds of publications – both in print and online – provide easy to follow guidelines concerning how to go about searching for a home to buy and financing the home you choose.

Armed with a basic understanding of what is involved in shopping for a home, how to obtain information on homes for sale, and the various financing options available a first-time home buyer can and will have an advantage that comes with knowing what to expect. The old adage, "Knowledge is power" certainly rings true when it comes to avoiding Scottsdale homebuying mistakes.

Avoid these typical pitfalls
There are three major issues that can thwart first-time homebuyers during the process of buying and/or financing their home purchase:

• Going rogue
While it's both enlightening and educational to do some preliminary online home shopping, it's probably not a good idea to strike out on your own and visit homes you like. As we've mentioned above, talk with a housing counseling agency, a real estate professional, or a mortgage lender to help you better understand if you're fiscally ready to buy a home or continue renting. Statistics provided by the Zillow Group Consumer Housing Trends Report show that just 46% of buyers were able to buy the first home on which they issued an offer. This confirms that in a fast-paced real estate market, competition and disappointment go hand-in-hand. It's probably a good idea – and good business – to enlist the aid of a professional to better enhance the outcome.

• Shopping for homes outside your price range
Many real estate professionals recommend first-time buyers get pre-approved before they begin the home buying process. Pre-approval can include the completion of a mortgage loan application and the submission of pertinent supporting documentation such as tax returns, W-2s, or pay stubs to verify income. In addition, a preliminary credit report can be ordered for those prospective applicants concerned about their credit scores preventing them from qualifying for a home mortgage. In addition, real estate agents and mortgage lenders advise first-time home shoppers that just because you're approved for a certain price range doesn't mean you should necessarily spend the entire amount. We suggest using your pre-qualification amount as a guideline to demonstrate what you may be able to afford and compare that to what you can comfortably afford to pay each month – taking into consideration your other monthly expenses. The bottom line here is, look at only those homes that are in your price range and that you can comfortably afford. This is a better plan for avoiding Scottsdale homebuying mistakes financially.

• Not comparing mortgage quotes and notes
Recent research cited by Fannie Mae shows just two-thirds of prospective borrowers actively received more than one mortgage interest rate quote. Comparison shopping for the best interest rates, terms and conditions will give you a better selection from which to choose, and will ultimately give you peace of mind knowing you considered other mortgage options. In addition, if you don't take the time to shop around, you could be spending thousands of dollars more than you need to over the life of your mortgage.

Read more about home buying tips in the section of articles on Scottsdale Home Buying Tips just below our Scottsdale Real Estate Categories in the column to your right. Remember, we also post tips daily on Facebook and Twitter. Check us out there, too.