Congratulations on taking the first step to owning your new Chicago home!
I’ve helped many buyers find a space that they really love coming home to (see client testimonials here); Some were just getting started — living on their own for the very first time. Others were moving to a bigger space, due to a growing family. While others were looking for just the right investment property to add to their portfolio.
Regardless of the situation, the buyers that were best-prepared for their homesearch were the ones who found a property that they truly adored quickest, easiest, and at a comfortable price.
Here’s what you should do to prepare for your homesearch:
- Have an idea of how much you can comfortably afford. Bankrate.com offers a handy calculator to help give you an estimate of your maximum purchase price. Enter your income, down payment and monthly debt; the calculator will generate a purchase price that will help guide your online search.
- Know your timeline. Generally, it takes about 30-45 days to close on a traditional sale or a foreclosed home. Short sales, on the other hand, can take six months or longer to close; or not close at all. You should only pursue short sales if you have lots of time to spare, don’t mind watching the seasons pass while not receiving an update, and can afford to possibly not close after six+ months of waiting. If you need to move within a 30 or 60-day time frame, stay away from unapproved short sales.
- Now that you have an idea of how much you can afford, and the type of sale that works for you, begin searching online to determine in which neighborhoods you can afford a home that you’ll love. Realtor.com is a good initial tool for the online search. If you’re not familiar with some of the neighborhoods, drive the area to make sure it’s a good fit. You can also contact your favorite Realtor and ask to receive MLS listings (these can be sent to you daily, weekly or somewhere in between…whatever is manageable for you).
- Now that you have a purchase price in mind, along with preferred neighborhoods, you’re ready to bring a lender into the mix. A pre-approval letter is required to begin viewing homes with many buyer’s brokers, including me (There’s nothing more devastating to a buyer, to view lots of homes, finally fall in love with one, only to be beat out by an already pre-approved buyer; or to find out that you actually qualify for less than originally thought. Be prepared upfront, before you start shopping). Contact a couple of lenders to obtain a pre-approval letter; then compare rates, fees, and financing products to determine which lender can offer you the best terms. NOTE: You can also ask your Realtor to refer you to a loan officer, which I highly recommend. The best Realtors often know of lenders offering special financing programs. My most recent buyer received a small grant; PMI was waived, and only a 3 percent down payment was required because I referred her to a BMO Harris Neighborhood Lending Program.
- Contact your preferred Realtor. Let him or her know that you’re pre-approved, and ready to tour homes in your top neighborhoods. He or she should want want to know what will make you happiest in your new home, and then find the best home matches (not just send you everything on the MLS) to make the best use of your home-shopping time. S/he may also review a buyer-broker agreement with you as I do, to outline each person’s role and duties in the process.
- Now you’re really cookin’! You and your Realtor are all set to hit the pavement! Because you’ve prepared well (know your neighborhoods, search price, and ideal sale type), your search should be focused and fruitful.
- Now all you have to do is make an offer, have the property inspected, have the contract reviewed by a real estate attorney, close 30 days later, and pick out your new wall colors. Your Realtor should oversee the entire process from start to finish, providing appropriate documents, and answering any questions you have along the way.
If you need assistance with any of this, I’m here to help. Feel free to e-mail me at MStewart@DreamTown.com