When you choose to buy a home, the process entails more than looking at homes to find one that meets your fancy. You should also consider your financial limits and your budget, then legal protection for you as you work with a realtor. Here are some tips to help you to prepare to successfully find and buy the home of your dreams within your budget.
Find a Lender
As a first important step to buy a home, you will want to find out how much you can afford based on your income and your financial goals. And you can do this with a bank lender or mortgage broker. Talk with a mortgage broker in your area or with your bank or credit union. They can get you started in the mortgage application process so you can secure a good interest rage for your purchase.
Don't lose track of your home-buying goals as you begin to work with a broker. Just because, for example, you are qualified for a $400,000 mortgage but within your personal budget you only want to spend $250,000, be sure to follow your own rules and stick to your budget. It is great to know that you are qualified for a larger mortgage if you need it, but don't overextend yourself.
Manage the Agency Contract
When you hire a realtor to help you buy a home, don't be afraid of signing a contract. By signing a contract with your chosen realtor, you promise to work with them for a specific period of time in your home search, then when you find a home they will be guaranteed a commission from the sale. You can specify a certain period of time you will agree to work with them, such as three or six months. A contract protects them against losing out on the commission if you were to buy a home and try to cut them out of receiving their commission, either on purpose or inadvertently.
Although a buyer's representation contract will indicate your agreement to work with the agent for a specific time as you look for a home, the contract is also there to protect you in the process. The agent contract binds your realtor through agency, which legally binds them to look out for your best interest during the buying process. If, for example, your realtor personally knows the person selling the home you are interested in, they will be upfront with you about any relationship with the seller and not hide details from you about the seller's position in the property and its equity.
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