My Lease is up…, When should I start looking for a house? We get this question all the time. Buying a house isn’t like going to the store a to buy a new shirt. It takes time and planning. And not all of it is in your control.
If you know your credit score and it is at least over 580 your home buying activities should start 3-4 months before your lease terminates. If you have a less than stellar credit score or are unsure of it, start sooner. Your first step is to visit a reputable mortgage lender or broker. Stay away from the online only companies. Let the lender pull your credit score. They actually receive more in-depth information than we do with FreeCreditReport.com. If your credit score falls into the lower than necessary range, a good lender will work with you to take steps to raise it. A lower credit score will cost you more in interest rates, pre-paids, home insurance, and car insurance. A little hint, if you do not have much credit, open up a credit card. You don’t have to use it much. Just make sure it is paid off and by all means, DO NOT CLOSE ANY CREDIT ACCOUNTS! It will lower your score.
Assuming you have a decent credit score, get a pre- approval letter from a bank or mortgage lender. Now your search begins. Given the low inventory of homes on the market in our area, your search could take more than a month or two. Once you find the home that fits your needs, you still need 45-60 days until move in.
The offer needs to be accepted and that can go back and forth a few times. Then as a Buyer, you arrange a home inspection within 14 – 21 days. Depending on the results, that may take a bit of time to come to terms with the Seller. Your lender will be working on the load approval and order an appraisal. The appraisal could take 40-45 days depending on how busy the market is at the time of your offer. Once the appraisal comes in, hopefully at the purchase price, the loan will need another week or so to be finalized. Then the closing may be scheduled.
As a renter, you may have some leeway as to your moving date as when the loan closes you don’t pay the first month’s mortgage. But all of that depends on your lease agreement. Remember to give your landlord enough notice of your moving out.
Bottom line, the home buying process takes 45-60 days and that depends on how quickly you can find a home.
Most people don’t want to move in the winter and wait until spring, usually in April, to put their house on the market. Contrary to belief, it is better to list your home late in the year or early in January.
Instead of waiting until spring, there are four reasons you should consider selling your home this winter.
1. Less competition. The old story of supply and demand applies here. With everyone else, especially those with children in school, waiting to list their home in the spring you’ll have less competition.
2. Less competition means that you can demand a higher selling price. There will be fewer homes to compare to yours and with a limited supply, you become a winner.
3. Interest rates are still low and the prediction is that they will rise at least 3 times in 2018. Low interest rates means people can afford more house and aren’t hesitant to purchase one.
4. You’ll have more serious Buyers and often receive a better price. People sometimes just have to move. They get transferred, take a new job, outgrow their apartment, or their lease expires. What ever the reason, winter time Buyers are more serious Buyers. I personally moved three times at the end of December. And it wasn’t really all that hard selling or moving. Plus, all my Buyers were anxious to make memories in their new home and show it off to family and friends over the holidays.
Contact me and we can discuss a marketing plan to sell your home.
I received a Facebook message from a young woman looking for help. She, her husband and grandmother were looking for a side by side duplex or home to rent where they could also have 2 more family members and 3 dogs join them. Oh, and one more caveat, they couldn’t spend more that $800-$850 a month.
Unfortunately, I couldn’t help them find a rental to fit their needs and explained that very few landlords allow four adults, 3 dogs, and a child. But, I was able to refer them to a lender who assisted then in qualifying for a WHEDA (Wisconsin Housing and Economic Development Authority) loan even though their credit score wasn’t stellar and they didn’t have a down payment. Then we set out to find a house.
I met with the Buyers to assess their needs and wants, go through the buying process, and the Offer to Purchase so they would be able to move quickly as the homes in their price range are still flying off the shelf. We signed a Buyers Agency so I could represent them instead of the Seller. We looked at 5 houses and chose one.
The Buyers had their feet planted firmly on the ground and knew they were lucky to be buying a home and it wasn’t going to be perfect. After the offer was accepted we had an inspection and asked the Seller to fix some of the more serious issues. The Buyers still had some nerve racking hurdles to jump over due to some past credit issues. The lender, Jesse Wien from PRMG Mortgage and I worked hard to calm fraying nerves, answering the multiple phone calls and text messages we received from both Buyers on a daily basis.
Our reward was handing the Buyers the keys and welcoming them to their very own home, something they only dreamed about but didn’t think was possible.
If you are dreaming of becoming a homeowner, contact me at (920) 659-0556 or Susie@starservicerealty.com and we will work hard to help you achieve your dreams.Welcome Home to the Fox Valley!