The following is a regular feature by Kyle of Rather-Be-Shopping. Be sure to check his site if you are in need of online coupons or codes!
It is a very exciting time for my family. My wife and I are in the process of buying our first home! With the distressed homes available, tax credits, and low mortgage rates, our timing couldn’t be better. But with this excitement, also comes a lot of added stress. But with the proper planning and research, I have found that the home buying process can be made easier. Here are some things my wife and I have learned through this process.
Deal Hunting
When looking for real estate bargains, you have to be very proactive. You can’t rely on your realtor to do all the searching for you as they often don’t have the time. In my market in northern California, the really good deals on foreclosures all seem to be under contract within a week.
The good news is that you have access to the MLS service just like a realtor would. You can use Realtor.com to do your searching, but I would recommend doing a Google search for “Your Town foreclosures” or “Your Town real estate MLS”. You will find some websites that are updated in real time with the newest listings and foreclosures. Check it every morning and every afternoon and when you see a good deal, call your realtor and try and get in the house to take a look that day. I have found this to be the single best way to find bargains before other prospective buyers do.
Tax Credits
Try and get into contract on a home by April 30th. If you can, you will be eligible to receive a $8,000 tax credit if you are a 1st time home buyer, or a $6,500 tax credit if you have owned and lived in your previous home for five consecutive years out of the last eight years. This tax credit may very well get extended as well. Free money, can’t beat that.
Short Sales
Beware, these often become “long sales”. My wife and I found a great home at an amazing price last November that was a short sale and we had our offer accepted by the homeowner who then sent the short sale package off to the bank for their approval. The price seemed to good to be true, and after waiting four months it was indeed to good to be true and the bank decided to take the house to foreclosure. If you are a frugal bargain hunter like me, be careful with short sales. Especially since they take so long and by the time you hear back form the bank, the home could very well have depreciated even more and make your purchase price not such a great deal after all.
Mortgage Rates
Mortgage rates are fantastic right now. Check Bankrate.com to see what rates you would qualify for in your particular area. Also, make sure to get pre-qualified before you start looking for a home. This will save you a lot of headaches down the line. Also, check your credit report and credit score. If your credit score is over 740 you will get the best rates. So if your score is close to that mark, figure out what it would take to get over that number. It is worth waiting a few months to get your credit in order before you start house shopping. This could literally save you $1,000′s of dollars over a 30 year loan.
Points or No Points
That is the question. This one is simple actually. If you plan on living in the home over 5 years, buying down your mortgage rate with points will usually make sense. It typically takes about that long to get back the money it costs to buy a point. Every situation is different, so make sure to do the math and find the break-even point on your particular loan.
Please give me some other home buying tips that I may have missed. I look forward to your comments. In keeping with tradition, here are some coupon codes that may help you save even more money.
1-800-Contacts.com
Save 10% Off your Entire online purchase
Coupon Code: Shopping937
Expiration: 3/22/10
See All: 1-800 Contacts Coupons
Birthday Express.com
Save 35% off your Entire Clearance order
Coupon Code: 35CLEAR
Expiration: 3/14/10
See All: Birthday Express Coupons
Domestications.com
Save 15% off your Entire online purchase
Coupon Code: D10AFF03
Expiration: 3/31/10
See All: Domestications Coupons
Harry and David.com
Save 20% off your $50+ online purchase
Coupon Code: SAVE20
Expiration: 4/05/10
See All: Harry & David Coupons
Justice.com
Save 40% Off your Entire online purchase
Coupon Code: 774
Expiration: 3/22/10
See All: Justice Coupons
Lands End.com
Free shipping on your $50+ online purchase
Coupon Code: MARCH11 and PIN 117376722
Expiration: 3/12/10
See All: Lands End Coupons
Oriental Trading Company.com
Free shipping on your $49+ online purchase thru this link
Coupon Code: OTC7575
Expiration: 3/31/10
See All: Oriental Trading Coupons
Smart Bargains.com
Get 10% off your Entire online purchase thru this link
Coupon Code: None Needed
Expiration: 4/06/10
See All: Smart Bargains Coupons
Photo by asianjournalusa.
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Great post. Short sales can be very difficult and the only way I would make an offer is if you know the seller has already spoken with their bank on an amount they would accept. Of course, this can always change.
I have to go and look at foreclosures in my city now…
Agree Kate. I won’t even look at a short sale now unless the offer amount has been pre-approved by the bank.
Kyle, I have family members in real-estate trying to buy a specific type of property from foreclosures and it is tricky and time-consuming. . . and if they find it, they’re very likely to buy it themselves rather than sell it to a customer. . .
So yep, doing some of your own footwork is advised!
Hey guys! Here’s some info that I thought might also help – it’s getting your ducks in a roq before buying a new home: http://www.fischerandfrichtel.com/blog/index.php/2010/02/getting-all-your-ducks-in-a-row-before-buying-your-new-home/
Regarding home-buyer’s tax credits for existing homeowners, please also be aware there is an income limitation (I believe it’s $225 gross household income).
Question: Is there any talk about extending the HB credit again? Last I heard, it was set to expire in April.
great tips, its always a good idea to do lots of research when there’s lots of money involved. Often there are things you can do which can save you both money and time but are not always obvious to the first time buyer.
Good luck and i hope you enjoy your new home
Great tips here!! Just wanted to let you know that I’ve linked over here from my “This ‘n That Thursday” post.
http://myreasonstoblog.blogspot.com/2010/03/this-n-that-thursday_18.html
Hope you’re having a great day!!
~ Joy :)
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Hope you got the house you wanted. We bought a house that a relocation company had. Great price but they were so difficult to work with that we almost had to scrap the deal.
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