are crucial to healthy housing markets because they enable existing
home owners to sell their current home and purchase another one.
That means if you're thinking about buying a home, you're important
-- someone who owns a home can't sell it without
With that in mind, here are 10 tips to help you achieve your
goal of homeownership.
No. 1: Get prequalified.
Sellers typically won't accept your offer unless it's all cash or
you have a lender's letter saying you can get the financing you
need to close the deal. Consequently, being prequalified for a loan
is crucial, says Matt Phipps, a Realtor at Phipps Real Estate in
"You don't want to lose the house of your dreams because you
weren't prequalified for the mortgage," Phipps says.
No. 2: Target your territory.
Every town has pros and cons, but casting too wide a net can make
you crazy, Phipps says. Decide where you want to live and focus on
"Do some drive-bys and make sure you like the setting of the
house before seeing the property," he suggests.
No. 3: Prioritize your preferences.
Make a list of what's important to you and your family, whether it
is location, condition, price or certain amenities, and be prepared
to make sacrifices.
Graduate from renter to buyer despite student
"You're not going to find the absolutely most perfect house,"
Phipps say. "If you get eight of 10 things you've prioritized,
you've done very well."
No. 4: Know your budget.
Rather than guessing how much you can borrow or how much your
closing costs will be, discuss specific numbers with a reputable
lender or broker.
"Meet with the lender and get an idea of exactly how much you're
preapproved for," Phipps advises. "You want to have that
conversation so you know where you stand."
No. 5: Be realistic.
Shopping for a house that's more costly than your budget is likely
to mean disappointment since most sellers receive multiple offers
equal to or higher than their asking price, says Ken Pozek, a
Realtor at Keller Williams Realty in Northville, Mich. If you're
preapproved for, say, $270,000, don't ask to see homes priced
higher than that.
No. 6: Act fast.
Homes are selling quickly in many areas due to limited inventory.
That means you should check out any newly for-sale properties that
interest you as soon as possible. If a house is listed Monday,
don't wait until Saturday to see it. Pozek says. It could be sold
No. 7: Don't play price games.
try to sweeten their offer with a higher price, then recoup the
money in seller-paid closing costs, repair credits or other
concessions. Pozek says that's not smart because if the appraisal
doesn't support that higher price, you won't be able to get your
"It's hard to say, 'We'll give them more than asking, then ask
for concessions,'" he explains.
No. 8: Pay closing costs.
Asking the seller to pay your
will weaken your offer and lessen your chances of success, says Jan
Baron, a Realtor at Realty One Group in Temecula, Calif.
"All the sellers care about is their net. If you ask for 3
percent closing, that's 3 percent out of the seller's pocket," she
No. 9: Accept defects.
The same logic applies to asking the seller to pay for repairs,
unless you're applying for an FHA or VA loan.
"If it's an FHA or VA loan, you pretty much don't have a choice
about asking for repairs if something is a safety concern, or if
there are missing appliances, they have to have those replaced,"
says Baron. "But don't ask for the moon."
No. 10: Get educated.
Being well-informed about the local housing market can give you an
advantage over experienced buyers who are out of touch with the
"First-time buyers are very savvy and sophisticated about what's
going on," Baron says, "whereas someone who has been around a long
time -- they think they know it all."
First-timers normally account for about 40 percent of home
purchases, according to the National Association of Realtors (NAR).
If you're wondering how you compare to other first-time homebuyers,
here are some statistics from the NAR's 2012 Profile of Home Buyers
- Median age: 31
- Median income: $61,800
- Typical house size: 1,600 square feet
- Typical house price: $154,000
- Median down payment: 4 percent
- Source of down payment: Savings (76 percent), gift, typically
from a parent (24 percent), retirement account (11 percent),
borrowed money from friend or relative (6 percent), sold stocks
or bonds (6 percent)
The bottom line is that purchasing a house today is
"challenging," to use Pozek's word, for first-timers. But don't be
discouraged. Follow these tips and you'll have a greater chance of
securing the home you want.