The Grein Team: Lake of the Ozarks #1 Choice For Buyer’s Real Estate Agent
Why You Should Not Buy a Home Without a Buyer Agency Agreement
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
~Franklin D. Roosevelt
So you are thinking of buying a home in Lake of the Ozarks area? Congratulations!
Buying a home is probably the biggest single purchase you will ever make. It is a time of excitement, as you look to claim your own personal piece of the American Dream. But it is also a stressful and confusing time, because the choice you make will affect your future – and that of your family’s – for years, and even decades, to come.
When you’re considering buying a home in Missouri, there are just so many important questions that need to be answered,especially if you are a first-time buyer:
• How much house can I afford?
• Do I need to be prequalified before I start looking?
• How do I know what I REALLY need?
• What are the other costs besides the loan?
• How do I find houses to look at?
• What are some things I should look at when I view a house?
• Is the asking price fair?
• How do I make an offer?
• … And many, many more questions
Even if you have bought a house before, the process can be daunting. Real estate laws change frequently, and it can be difficult for the average person to keep up. There’s just so much important information to keep track of.
Just because you want to buy a house doesn’t mean that you have the time or inclination to become an expert in everything that has to do with real estate in Missouri. Here are some helpful tips that will help make the process as easy as possible:
Tip #1 – Get Pre-Approved, Not Just Qualified
Before you even start looking for homes, find out what your lender has to say. After you submit an application, lenders will look at the whole situation – your income, your assets, your credit history, etc., and then issue you a “pre-approval” letter, stating the highest amount that they will say “YES” to.
With this pre-approval letter, you will know exactly where you stand and in what price range should be looking. Later, when it comes time to make an offer, your pre-approved status can be a very effective negotiating tool, because it shows the seller that you are both prepared and able to buy.
A “qualification” is not the same.
While a pre-approval shows that you ARE able to buy, the qualification merely indicates that you MIGHT BE. If the lender/broker didn’t pull your credit report and verify your other information, you might be in for disappointment later.
Tip #2–Affordability Has Different Meanings
A few words about affordability –
Just because a lender says that you CAN borrow a certain amount doesn’t necessarily mean that you SHOULD. For the lender, it simply means that, according to the formula that they use, they believe that you are able to make the projected payments.
Typically, lenders require that your mortgage payment is no more than 28% of your gross monthly income, and that your total debt load– credit cards, car payments, student loans, etc. – is less than 36%. For the lender, what you can “afford” is strictly about the numbers.
For you, however, what you can “afford” depends upon your lifestyle and your plans.
You need to consider how your family’s finances and needs may change in the future. For example, if you have young children, college tuition might be an obligation that you will have to deal with in a few years, before your mortgage is paid off.
Also, you will have to keep in mind other ownership “costs”, such as repair, maintenance, and home improvements. If you don’t allow financial room for those obligations, you might face difficulties in the future.
When considering what you can afford, err on the side of caution.
Tip #3– Location, Location, Location
Where your house is – the region of the state, the county, the city, the neighborhood, and even where the home sits on the specific street –will greatly affect the home’s value now (when you buy), and in the future (when you sell).
Take a look at some specifics –
Let’s say that you are wanting to buy a home in Central Missouri—Camden or Morgan County, for example.
Consider that the two county seats, Camdenton and Versailles, are less than an hour apart – but the average home lists for $170,000 in one and $90,000 in the other.
And it’s the same in virtually every community in the area – from Lake Ozark and Osage Beach to Sunrise Beach and Rocky Mount. Where you choose to live can mean a difference of tens of thousands – or even hundreds of thousands – of dollars.
Then there are other considerations that have to do with your lifestyle and preferences –
• Do you want the convenience of the city or the peace and quiet of the country? Or do you split the difference and look for something in the suburbs?
• If you have – or are planning to have – children, which locations have the best schools?
• What is the crime rate like in the neighborhood?
• How close is the shopping, dining, hospital, or airport?
• Are there parks or recreational areas nearby?
You will definitely want to keep in mind any necessary commute. Using the earlier example, if you plan on working in Camdenton, there’s a lot of difference between commuting from Linn Creek (less than 10 minutes) versus Porto Cima (almost 30 minutes). Remember, this is the drive that you have to make day in and day out, both coming and going.
Tip #4 – Make Your “Wish List” – and Then Pare It Down
Take some time to really think about this – if you could find the “perfect” home, what would it have?
• How many bedrooms/bathrooms?
• One-story or multi-level?
• Do you have a home style preference – ranch, bungalow, etc.?
• What is the exterior like – brick, frame, siding, rock, stucco?
• What is the kitchen like – counter space, cabinet/pantry storage, breakfast, nook, etc.?
• Do you want the home to already be updated to modern styles, or do you want to renovate the home yourself?
• Do you want separate living/dining areas, or a more open floor plan?
• How much storage space do you need – walk-in closets, outside storage buildings, etc.?
• Garage versus carport?
• Do you like the idea of a large yard with plenty of room for your children to play, or a smaller one that is easy to take care of?
• How about amenities – fireplace, swimming pool, deck, hot tub, etc.?
The list can be quite extensive– so have fun with it.
But when you’re done listing everything that you wantin a home, go back and make another list of everything you need in your home. What are the “must-haves”, as opposed to the “it-would-be-nice” options?
This will give you a great idea of what your priorities are.
Tip #5 – DEFINITELY Work with a local Lake of the Ozarks area Real Estate Agent
Some people are hesitant to work with a real estate agent when they are looking for a home because they think that all they have to do is find a house in the classifieds or online and talk to the listing agent.
Although it is possible to buy a home that way, it may not be in your best interest to go about the process in exactly that manner.
A listing agent works for the SELLER – meaning they only get paid if they sell that specific house – to ANYONE. Their primary obligation is to sell the home, not to find the right home for you.
You need somebody who is working for YOU – a Buyer’s agent, like the professionals at the Grein Team. They don’t get paid until they put you in the home that is right for you and your family. YOU are their primary obligation.
Here are just some of way that your Buyer’s agent will work for and with you –
• Interviews you about your wants, needs, and plans
• Makes sure you understand the local real estate market by giving you pertinent, up-to-date information – schools, crime rates, average home value, projected utility costs, etc.
• Finds and shows you homes that fit your goals and budget
• Helps you with any special considerations – for example, a home that is to be bought by using a VA loan must meet completely different criteria than a home being purchased under FHA guidelines
• Discloses any pertinent information about each property – time on the market, if it’s in a flood zone, etc.
• Works with other professionals – inspectors, appraisers, repairmen, etc.
• Negotiates with the Seller’s agent on your behalf
• Ensures that all paperwork is properly filled out and submitted
• Handles any other problems or issues that may arise during the process
The bottom line is this – buying a home is supposed to be FUN. And the best way to ensure that it IS fun is to be properly prepared and to have the help of a qualified professional. Do your homework and let someone else do the legwork, and you’ll soon be living in not just a house, but a HOME.