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Tuesday, August 16, 2016

Home Buyer Tips: Don't Start at the Top of Your Budget!

When working with prospective home buyers I typically begin early on with a conversation about their motivation and ability to purchase.   Specifically this involves the mortgage pre-approval  (or proof of funds in a case purchase) and their timeline.  

By the way, in Florida it now takes at least 45 days to purchase a home after the contract is in place if financing is involved.

A few words of caution about mortgage pre-approval amounts....
  • The mortgage pre-approval is not a "must spend" amount.   The challenge is determining the required amount necessary to satisfy the must have characteristics of the perfect home.  This is a perfect time to read "Finding the Imperfect Home."
  • Avoid the urge to begin the home search with a budget established at or near the uppermost end of the mortgage approval.  This may mean reconsidering location, size, age ("must haves").

There are times when the lower budget and the rising market just don't bring the results desired.   After a few weeks (or a couple of months) of shopping and seeing every home in the "required amount," buyers may need to ask themselves if the budget needs to be adjusted.  If that is the case there is room since the search began under the maximum approved amount.

Sometimes it may take only one trip out to see homes for a buyer to realize it is time to adjust the budget.  In a market such as the Brevard County, Florida real estate market where prices are rising it could pay off to hasten the calendar.  Besides the uncertainty of interest rates down the road, if home prices rose 5% in the next six months that $200,000 home could be $210,000 early next year!

Sometimes the necessary budget adjustment is not significant.  A small increase of  3-5% could make the difference between finding a home and being frustrated by the marketplace offerings.

The process of buying a home is a fluid process requiring adjustments and tweaks along the way.   Having the flexibility to redefine the budget or must have characteristics gives buyers choices. 

Begin your Florida home search with a local expert you can trust.   In Viera and Melbourne, Florida call or text me if I can help in any way.  I assure you this....your interests are my interests!

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