Steps to Buying Smart

Suc-cess sɘk'ses/

The accomplishment of an aim or purpose.

"When it comes to purchasing a new home, buy smart. Since this is most likely a process you don't often encounter, please know, I'm here to help. Below, I've itemized a very straightforward approach that will provide you with the insight, understanding and success in achieving your ultimate goal... the best home for the best price with the best terms." Colleen Rock

Know your Course. Without it, buying a home would be much like taking a road trip from Connecticut to California - without a mapped-out route.

• Get pre-approved
• Prioritize your needs in a home and community
• Select a Realtor (Click Here for Tips)
• Preview homes and narrow the search
• Purchase your new home
• Conduct home inspection(s) and apply for your mortgage loan
• Remove contingencies
• Attend closing for transfer of title
• Move and enjoy your new home

Establish a Limit. In my opinion, this is the most important step in purchasing a home. Often buyers become pre-approved without first establishing a budget. Please know that the information obtained for pre-approval is not as thorough as that of a well-planned budget. Therefore, you may be misguided.

There are two ways to answer this question. First is to understand your budget and how it relates to your personal lifestyle; second, is to understand your budget and how it relates to your ability to borrow money. Just follow these simple steps:

• Establish a budget (if you have not already done so).
• Know your credit score. You are entitled to a free copy once a year. Visit www.annualcreditreport.com
• Realize your actual spending habits (be sure to include your social life expenditures).
• Review habits that may or may not change.
• Get pre-approved. Prior to meeting with a lender, determine a monthly payment that best fits your budget, and, know the amount of money you plan to use as your down payment. The standard down payment is 20%, however, depending on your credit score and finances, this amount can be less ore more.
• Set funds aside for closing costs, inspections, and moving costs.

Remember, banks are in the business of selling money. Chances are you will find that the bank or mortgage company will be willing to lend you more than you prefer. This is not unusual as it's only a guideline; however, stick to your budget. A good rule of thumb is that your mortgage payment should be no more than 25 to 30 percent of your monthly gross income, and your total debt-to-income ratio should be less than 38 percent of your gross income.

Understand Agency Disclosure. Agency Disclosure is a state law. In the State of Connecticut you're entitled to your own representation (most often at no cost when buying a home). The purpose of this law is to advise all parties in a real estate transaction as to whom the agent(s) represent. Please know that when an agent represents you as a buyer's agent, they have a fiduciary responsibility in seeking the best price and terms for you, and, owe you the duties of loyalty, confidentiality, obedience, accounting and responsible skill and care. It's especially Important to know that the agent representing the seller maintains the same level of responsibilities; therefore, unless you are well versed in the industry and local customs, the logic in having this entitlement and not utilizing the services of a buyer's agent seems fruitless. NOTE: not all brokers and real estate agents practice alike. There are various forms of services that can be offered under Connecticut law.

Recognize the Emotional Impact of Buying a Home. It's an odd parity, because of our emotions, buying a home can be extremely exciting and at the same time, can be extremely distressing. When the time comes that you've found your perfect home, you may find yourself a bit biased. Not to worry, either you're going to remember this tip on emotions or your agent will be there to guarantee an objective and favorable outcome.

Understand the value of a professional. First, unless otherwise agreed upon, when working with a professional REALTORS® that represents you as a buyer's agent, there is typically no fee charged to you as the buyer. In Fairfield County, it's still customary for the seller's broker to pay the buyer's agent/broker. Next, there is a good reason the real estate industry has been around for 100+ years. Quite simply, most people don't have the time, resources or want of learning the entire buying and selling process. When working with a professional, your time is managed efficiently, your options are expanded and your interests are protected.

Hire a CRS (Certified Residential Specialist). There is a reason only 3% of REALTORS® nationally have earned this prestigious designation. To become a CRS, REALTORS® must meet a number of stringent requirements that combine advanced hours of education and training, experience and success in the marketplace. A CRS agent adheres to a strict code of ethics that binds them to perform in the best interest of their clients at all times. In addition to the requirement for having completed an extremely high number of transactions, CRS's are also required to complete between 16 and 80 additional hours of education beyond what's required of the typical REALTOR®.

Don't underestimate the Value of a Home Inspection. I cannot stress enough the importance of a home inspection. Remember, this is your final opportunity in assuring the home is in the condition in which you negotiated the terms of your purchase upon. It's also a wonderful opportunity to be introduced to your new home. It's always nice to know where the main shut-off's are located for water and electrical; or to understand the servicing that is required for items such as sprinkler systems, mechanical systems or even the appliances. And finally, it's a great way to establish a budget for maintaining your home. Even if a home appears in superior condition, there can always be underlying issues that simply have not yet become visible. Therefore, even the seller may not be aware of a defect. Always be on the side of caution and hire a professional home inspector. The inspector should provide you with proof of his qualifications, certifications and memberships to home inspection organizations.

Plan Ahead - You're Moving! When it comes to moving, planning ahead is a key factor. Start decluttering and discarding items you no longer need. They say if you haven't worn it or used it in the past year, discard the item. You may want to also consider donations to local charities and organization in need of clothing, furniture and/or household miscellaneous. Click here for a Moving Checklist.