Today, tomorrow, next month?
You know you want to buy a house. You think you’re ready, you have enough saved, you have your credit and debt in line, and you have calculated that now is the time for you to make the leap to home ownership. You’ve started looking around online and thinking about what you like and don’t like in homes. You think it’s time to get serious and contact a Realtor to get your home search started. Or is it? That’s the part you’re uncertain of – when exactly should I start searching for my new home? How far in advance should you stop perusing online real estate search sites and get down to business and start looking at them in person? When should you contact a Realtor and choose an agent? When do you contact a lender and figure out how much you’re pre-approved for and what you can comfortably afford?
Ready? Set? Go!
Typically, I wouldn’t recommend you begin your physical search for a new home until about three months before your projected move date. There are exceptions to this, but overall it’s a good rule of thumb. (Exceptions would include if you’re looking for foreclosures or short sales, as these sales can often take months from offer to closing.) Although many people like to begin their planning far in advance, the three month time period is when you’ll be actually be looking at homes in person with your real estate agent, speaking with a lender and getting pre-approved, choosing a home to make an offer on and once accepted, working through the process of closing on your new home and finally…picking up the keys and moving in.
Why three months?
Most lenders’ pre-approvals are only good for three months. Many lenders will lock-in your interest rate during this time and some will even allow for a change in the rate if they go lower (typically, you’re only allowed to do this once during the lock-in period). With interest rates as low as they have been, they will more than likely rise at some point. With an interest rate increase you may not be able to afford as much home as you thought you could, throwing all that searching out the window.
Homes you look at today, might not be available tomorrow. If you’re looking at homes many months in advance, they are often no longer on the market when you’re ready to buy – whether they’ve sold, been taken off the market, or in some cases, foreclosed upon. There is nothing more disappointing than seeing a home, falling in love with it, waiting for a few months until you’re ready to make an offer, and finding out the home is no longer available.
The real estate market is constantly changing. There are many factors that influence the housing market and each one could put the home you love out of your reach. Even if prices fall, it could change a neighborhood drastically and change your mind about where you want to live. A good example? When prices decline and homeowners find themselves underwater with their mortgage, foreclosure rates have a tendency to increase. Imagine you found the perfect home in a neighborhood, but that neighborhood suddenly faced a rash of foreclosures. Would you still want to live in an empty neighborhood that looked more like a ghost town than the friendly community you fell in love with?
Every buyer has different needs.
While we think the three month guideline works for most home buyers, there are times when a lengthy search period makes sense. Sometimes, it makes sense to find a home in an even shorter period of time. Every home buyer is different and their needs vary. The best bet? Contact us and let’s discuss your goals. We’ll take a look at where you want to be and when you want to be there. If it’s a year from now, we probably won’t hop in the car and start looking at homes, but we can begin planning and preparing for the future. Much like buying a home is more than simply saying “I want it,” being a real estate agent is much more than just opening doors and filling out forms. Together, we can build a plan to satisfy your home buying needs and work to make your dream become a reality with a solid plan that prepares you, educates you about the process, and guides you through every step of the way.
image courtesy of dreamsjung
