Sue Fox, @Properties. Direct 773.816.1788
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This is the time of year when most buyers begin the search for their next home. Many of them will start by sitting down at a computer and browsing through property listings online, which is a great way to become familiar with the pricing, size and condition of homes in a given neighborhood. Going to open houses is another time-honored way to start testing the waters.
But if you are serious about buying a home this year, there are several concrete steps you can take now — before you even contact a realtor or visit a single property — that will greatly simplify your search and improve your chances of finding a home that truly suits your needs.
1) Get pre-approved for a mortgage: Unless you can pay cash for a home, this is the most important step to take. It’s not as daunting as it may sound. All you have to do is call or visit your local bank, and chances are they have a mortgage division that will be happy to help. Otherwise, Guaranteed Rate and Wintrust Mortgage are both solid lenders who offer competitive rates in Chicago. The lender will run your credit and ask about your income, assets, and debt. Within a day or so, you’ll know whether you can qualify for a loan and how much you can borrow. This is a critical step, because lending standards are tight these days and buyers often need to improve their credit scores or ask family members to co-sign the loan (or give them cash for a down payment) in order to qualify. It is also vital to know how much you can afford, since there is a huge difference between what you can get for $200,000 or $300,000 or $400,000 in this market. The lender can also help you crunch the numbers to figure out what your monthly payment is likely to be.
2) Visit neighborhoods in person: Once you are pre-approved for a mortgage of, say, $300,000, you are ready to consider what that could buy in various neighborhoods. Some buyers already know exactly where they want to live, but many people are open to new neighborhoods or suburbs. This is where house-hunting online starts to break down. If you don’t know the area, you’re just looking at random homes on a screen without the context that will tell you whether there are any coffeehouses or shops or restaurants nearby or whether you will feel safe walking your dog at night. If your budget seems to be pointing you towards neighborhoods you don’t really know, it’s a great time to actually visit these areas for a few hours. Walk or drive around and see if you like what you find. If so, that may be a place to keep on your list as your search gains more focus.
3) Be specific: Now that you have a general idea of two major criteria — price and location — you are ready to drill down even further into specifics. What would your ideal home look like? Is it a condo or a townhouse or a single-family house? How many bedrooms and baths? Do your prefer a new or rehabbed home, or an older home with vintage charm (that perhaps needs some updating)? What else really matters to you? The school district? Parking? Being near public transportation? Living in a walkable neighborhood? The more specific you can be, the better. As a realtor, I always appreciate when buyers present a list of must-haves. Sometimes they fear they are being too picky, but being clear about your priorities actually is a major step in the search process. Of course, buying a home almost always involves some trade-offs, as you discover that the house with the fabulous kitchen is also on a busy street, or the place in the great school district isn’t as big as you would prefer. But if you can figure out the things that most matter to you in a home, it will spare you a lot of frustration and wasted time once you are out there looking.
I work with a lot of buyers, especially first-time buyers, and I know that many of these questions about neighborhoods, types of homes, and amenities can’t be fully explored until we jump in the car and actually go see some properties. But buyers who have done their preliminary homework tend to have an easier, more successful search. The spring house-hunting season is a bustling time, with lots of new properties hitting the market each week and thousands of buyers out looking, so being prepared can give you an edge when it comes to finding a great property. When the right house hits the market in an area you like, you will be ready to pounce … while another buyer who isn’t pre-approved and doesn’t really know the area will hesitate.
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