November 24th, 2010 3:35 PM by AllenBrothers Realtors
Hello everyone! We are just getting our website started and I'm very excited about the powerful source of informationn it is going to be for people seeking to buy and sell not only in the city of Houston but around the world, thanks to the power of search engines and algorithms returning relevant content. I wrote this little article a week ago to help first time buyers get an idea about how to start their home search. Cheers!
- Josh Foster 11/24/10
Pre-qualifying for a Loan
Find the price range of homes within your budget by pre-qualifying for a mortgage loan. Lenders can assist you in pre-qualifying by reviewing your credit report and employment information. Once you know how much you can afford to pay monthly for a home, you can get an accurate figure on the asking prices of homes you can afford.
A mortgage calculator tool like the one on our website (www.allenbrothersrealtors.com) will tell you what your estimated monthly payments will be based on the price of your home and your interest rate. This calculator does not qualify you for a loan but will give you a good idea if you are eligible.
Where to start searching
Today virtually all real estate searches begin online, with the home buyer searching the vast database of the MLS, which used to be the exclusive domain of sales agents. A motivated buyer will not take a very long time to buy a house, but may require a couple of weeks, a month, or perhaps only a couple of days. Just look around at different houses in the city, get a feel for different areas if you haven’t picked one, or zero in on a particular area you already know you like. I highly recommend the online application GoogleMaps.com, which allows the user to drop a “viewer” directly into the map anywhere, on any street, enjoying a 360 degree digital view every 15-20 feet that creates the illusion of physically standing on the street. Technology has advanced to the point that many people will be shocked to realize the potential they currently have at their fingertips.
Is a house even worth looking at?
A good house is more than a few enticing photos. What really makes a good house? People are afraid they will be lured into wasting their time to go look at a house that turns out to be nothing like the photos, or worse that they will naively purchase a house that over time reveals a much lower value than previously expected. What are some simple things to look for in an MLS report that can instantly give you the facts you need to decide if a house is even worth looking at? 1) What is the price per square foot? Divide the asking price by the square footage of the house. This is a good way to objectively compare the structural value of different houses in the same area, and can also help you determine if the house is priced according to its value. 2) Check on details like flooring and wall construction before you get into the car to go visit another part of town. Are those smooth-looking walls in the photos nothing but flimsy sheetrock, or are they something solid like hardwood, brick, or adobe? Are the floors just carpeted, or is there a nice solid foundation with stone Saltillo tiles or hardwood? Solid construction is everything, and these mundane details can make all the difference in the world over the life of a house. 3) Check the deed restrictions and the lot information. A good looking house wedged into a bad lot is worth far less than a house sitting in a cozy cul-de-sac or perched on a spacious corner lot. Is the home in a community that places many restrictions on the kind of modifications and construction you may want to do in the future? Some communities will insist that your house does not stand out from others, whereas other neighborhoods will place almost no restrictions at all. It’s all about what you want. 4) If the house isn’t new, then when was the last time it was renovated? If it hasn’t been renovated in 20 years then you can count on plenty of problems and issues in the near future.
Why is the market perceived as scary?
It’s really not that scary if you look at what’s going on. Investors and families alike are worried that home values will never be the same, and that the bottom of the market hasn’t been reached yet. Unless you are a house-flipper or taking on a loan you shouldn’t have qualified for in the first place, this isn’t something to worry about much in the long term. There is much to choose from, which means there are more mistakes waiting to happen, but also means there is a greater quantity of exceptional homes to choose from. If you know what you’re looking for then you won’t fall for the wrong listing. The loan process is rigorous, but interest rates have never been lower. Financing a home in this climate will give you better leverage on your principal than ever. Any profit you make from the investment will have been gained at the cheapest rates. Many homes in this market are not selling. The owners know they have priced their houses above market value and will gladly tell you otherwise. One way to solve this problem is to work with a Realtor to calculate the FMV (fair market value) of these properties based on current market conditions. Many sellers are beginning to sell at market value now, deciding this is the best choice based on their options. This is a buyer’s market despite the many negative things being said every day – if you prequalify for a home loan, there is more to choose from than ever right now.
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