Are you a first-time homebuyer in Chicago? If so, this is a great market for you because you do not have another property to sell, mortgage rates are extremely low and price drops have made lots of homes more affordable than ever.
However, buying a property is a complex process that takes time, knowledge and the guidance of a professional. Here are some pointers to help you accomplish your goal of a great buy:
- Get organized by starting a notebook or folder specifically for your home purchase. Make notes about the type of property you would like to find and write down 5 things you REALLY want to have in the home you buy. Keep the list handy and use it as a guideline for every place you look at.
- Make a budget to pinpoint how much you are willing and able to pay for your new home.
Rule of Thumb: 25-38% of total gross monthly income for housing expenses
Fact: 80% of buyers pay slightly more than they originally intend
- Connect with a great, full-time agent with whom you feel comfortable. Your agent will research the best values based on your desires and produce a list of properties on the market that fit your criteria. This prevents wasted time looking at “B” and “C” grade properties.
- Resist the temptation to look at properties priced way above what you want to pay. That means you may have to compromise on some things. But don’t give up on the things you REALLY want (remember that list you made?).
- Have your agent recommend several competent lenders. You should talk with a few and compare the rates and loan amount each can offer you. Then, get a written pre-approval for your mortgage to attach to your offer.
- If you want to include “Short Sales” and “Foreclosures” in your search, be sure to fully understand how these procedures work (or in many cases, don’t work). Your realtor can explain how these types of transactions typically go and clarify the pros and cons of both.
- There are lots of sweet buys out there, but you still need to be ready to act when you see what you want. Desirable properties don’t sit on the market for long, even in today’s marketplace. Your agent will help you analyze comparable properties to decide on an appropriate offer price.