Things to Start Now if You Want to Buy or Sell a Home in 2024
Tips on What You Can Do to Set Yourself Up to Buy or Sell a Home in the New Year!
If You Want to Buy a Home
Meet with Your Realtor
Finding a Realtor Ⓡ that you can trust and rely on is paramount. It is best to find a Buyers agent who is experienced, in both successful home purchases, as well as strong negotiation skills. Having a buyer's consultation early on in the home-buying process is ideal, in order for you to be in the best possible position to purchase a home. Having reasonable flexibility versus a tight deadline, allows you to take your time to find the home you really want. Avoid using the agent that is listing the home you would like to purchase. That agent has a fiduciary responsibility first to the seller, which can make negotiations difficult. Want to connect with an experienced, and professional local real estate agent? Connect with a member of our team today!
Meet With Your Lender
Meeting with a mortgage lender early is also a plus, and a local lender is usually better than one found over the Internet. Having a lender that is easy to get a hold of, versus having to go through a chain of customer service reps is a definite benefit. Oftentimes, listing agents prefer a local lender to a non-descript internet lender, when vetting a potential buyer for their listing. Getting pre-qualified and then pre-approved for a mortgage loan is critical when it comes to shopping for a home. You will want to be pre-approved BEFORE you go house hunting. You don’t want to fall in love with a home, only to lose out to a contract from a pre-approved buyer.
The Ask Cathy Team can put you in touch with some of our local trusted lenders to help guide you through the pre-approval process. Connect with us for a list of lenders who have a proven track record of great rates and closing on homes on time.
Build an Emergency Fund
Building an emergency fund lets you have peace of mind that if the unexpected happens, you will be prepared. The general guideline for an emergency fund is 3 months or more of expenses. This would include your future mortgage payment, insurance, utilities, and other living expenses. Murphy’s law states “Anything that can go wrong will go wrong.” Though we don’t like to think about potential emergencies, generally, it is best to prepare for the worst but hope for the best. You will be glad you did if a true emergency does arise.
Save for Your Down Payment
Your down payment is separate from your emergency fund. You should save at least 5% to 20% or beyond of your intended purchase price for your house down payment. The more down payment you put down from the get-go, the lower your mortgage payment will be. Also putting 20% or more down eliminates the need for Private Mortgage Insurance or (PMI). PMI is insurance that protects lenders against loss if a borrower defaults and is generally required if your down payment on your new home is less than 20% of the mortgage amount. Simply put, if you are putting down less than 20% down payment you will be paying PMI in addition to your mortgage payment. PMI stays in place until you’ve reached 20% equity in your home, at which time you can request it to be removed. PMI is usually canceled automatically when you’ve reached 22% equity. Check out our tips on ways to save for your down payment!
Pay Off/Pay Down Debt
Qualifying for a mortgage depends on a number of factors, one essentially being your debt-to-income ratio. This figure compares how much money you owe (your debts) to how much money you earn (your gross (before tax) income). Every mortgage lender has their own guidelines as to what is acceptable DTI, but the lower you make yours, the better. A common rule of thumb is the 28/36 guideline when it comes to reasonable debt. Your mortgage and home-related expenses (property tax, insurance, utilities) should be no more than 28% of your income. Those total expenses PLUS your credit card debt, car loans, and additional liabilities should not exceed 36% of your income.
Work on Credit Score
Another item that is important to qualify for a mortgage is a good credit score. Again, lenders have different acceptable credit scores as to what will qualify for certain mortgages. Here, it is better to have a higher number. The higher the credit score, the easier it will be for you to be approved for a mortgage, and the more programs will be available for you. Not all credit score levels will be accepted for a mortgage, so it is much better to find out your score early before you want to purchase a home so that you can work on it until you are ready to buy. Knowing what is on your credit report is very important. Sometimes there can be errors that you will be able to correct, but that takes time. Leave yourself plenty of time to address any hiccups on your credit report that can keep you from buying a home.
Get to Know the Area You Would Like to Buy In
Unless you are relocating to an area from out of state, you may have a general idea as to where you would like to live. This area is most likely familiar to you, being close to work, the activities you do, close to family or friends, etc. Sometimes though, the price points of homes in a particular area may differ from what you can comfortably afford. If that is the case, it is a good idea to have more than one option for the area in which you would like to live. Make your list of must-haves and a list of wants, and know the areas you are willing to compromise on, just in case. Especially if you are buying a home with another person, it is good to be on the same page as to what is important. Depending on the housing market, or the time of year, you may need to compromise in one area or another. In house hunting, some common (and important) areas to discuss are location, condition, price, or features. Rank these areas in order of importance. Ask yourself, is it more important to be in your target area, and compromise on the number of bedrooms, or condition, or would you rather be in a move-in ready home outside of your target area?
If You are Selling a Home
Meet With Your Realtor
Finding a Realtor Ⓡ that puts your best interest at heart is paramount to a successful listing. Your agent can help put a plan in place with a timeline that is comfortable for you. They can also discuss marketing your home in the best light possible, arranging for professional photography, and staging (if needed). Your listing agent should be known for savvy negotiations, proven marketing strategies, and a commitment to high ethical standards. Learn more about why you should list with the Ask Cathy team when selling your home!
Decluttering a home can be a daunting task. Depending on how long you have lived in your home, the more daunting it can be. Go through every drawer, every closet, every room, and pare down and begin to pack up. Closet contents should be reduced by half so that potential buyers will feel your home has plenty of storage. Closets and storage areas bursting at the seams, make homes appear lacking in storage. Depersonalizing your home will also allow potential buyers to see themselves in your home.
The last thing a potential buyer wants to see when they enter your home is unfinished home improvements that they will have to finish. It is ideal if the only thing that the future buyer of your home has to do is move in, or complete projects that they want to do, not need to do. Do you need recommendations on vendors we have worked with on home projects? Your Ask Cathy Listing Agent can help get you in touch!
Spruce Up Your Home's Curb Appeal
Judgment is often made curbside. Use the time before listing your home to do some projects to heighten your home’s curb appeal. Does your home need touch-up paint? Would a new door color be inviting? How is the landscaping? Give the exterior of your home a once over. If you were looking to purchase a new home, would your current home’s exterior draw your attention - in a positive way?
Decide What Your Next Steps Are
Have you thought about what your next steps are after you sell your current home? When you work with your Realtor Ⓡ, they can help you with your timeline to move forward and guide you through your next steps. They can put a plan in place to help you locate your new home and then move, timing everything as closely as possible. Your listing agent can pair you with a Buyer’s Agent on our team who will work with you on your new home, while your Listing Agent sells your current one. Our team works seamlessly together to provide you with excellent service and with your best intentions at heart.
All in all, 2024 is forecasted to be a good year for both buying and selling, and no matter what, the Ask Cathy Marketing Group Team is on your side. Connect with us below to help guide you through your home-buying journey and home-selling goals!