Albuquerque, Rio Rancho, Corrales, New Mexico Home Buyer Tips
Buying a home is typically the most expensive purchase a person will make in their lives. It is critical to have a plan and to be an educated home buyer. I am confident these tips will help New Mexico home buyers make an informed decision.
Pick The Right Real Estate Professional
This may be one of your most important decisions in the home buying process. Make sure you find a Real Estate Professional that will represent your needs and is willing to spend quality time reviewing homes and educating you in the home buying process. You are going to spend a fair amount of time with your Real Estate Professional, make sure you trust this person and you don’t mind spending time with them.
Take your time and visit as many homes for sale as you can. Keep notes on each home you are considering, noting each home you’ve seen and what you liked and didn’t like about each. Home buyers should take lots of pictures or a video of the homes they will consider buying. I also recommend home buyers create a scoring system to help in the decision making process. It is hard to remember each home after you have looked at several homes. Revisit homes high on your list, so you have a clear picture about each home’s pluses and minuses. You’ll find that moving more slowly and deliberately will help you make a smarter purchase. You will get a good feel for the home that meets your needs and budget after you have looked at several homes.
Do Your Homework
Home buyers need to do their homework to learn about local market conditions, the surrounding community, and the history of the home they are buying. There is so much information available from your Real Estate Professional and the internet. This research is critical to know how much to pay for a home and avoid paying too much for the wrong house. The more you know about a particular home and its surrounding community, the more likely you’ll make a smart purchase when it comes time to buy.
Get a Home Inspection
Getting a quality inspection done can alert you to homes that are a great buy, may need a little work, or are money pits that should be avoided all together. A good home inspector can alert you to major home problems with termites, roofs, foundations, air conditioner, heater, appliances, electrical, and plumbing. Any of these problems could be very expensive to repair or replace. You want to know if these problems exist before you buy your home. It is typical for the seller to pay for home inspections in New Mexico, remember everything is negotiable. A good home inspector is well worth their cost even if you must pay for the inspection.
Choosing The Right House
Make sure the floor plan, location, schools, and the neighborhood is right for your family. Take the time to consider how your family will occupy the home and whether it will truly work for you. Buying the wrong home may be a very costly mistake.
Check Out The Surroundings
Home buyers are moving into a different neighborhood and gaining new neighbors and a new community when buying a new home. Consider checking out the neighborhood on different days of the week and different times of the day to make sure there are no surprises. A friend was considering buying a vacant lot for his dream house; he visited the lot on a Friday night and found the lot was located near a local hang out for partiers that made a lot of noise on Friday and Saturday nights.
Buy A Home You Can Afford
When looking to buy a home, many of us aim for the biggest house we can afford. Think about whether you really need all that space, and whether you can truly afford it in terms of the mortgage payments, maintenance costs, insurance, and utility costs. Struggling financially to maintain a nice home may not be the best plan for your family. Add up all your monthly costs including your mortgage and do not exceed 38% of your monthly gross income (income before taxes). Remember most of your costs will continue to increase and your salary may not keep up with cost increases.
Do Not Buy The Most Expensive Home in The Neighborhood
Another temptation is to buy the most expensive house in the neighborhood. If you never have to resell the home and you can afford it then why not. However, this situation does not apply to many home buyers. When it comes time for you or your heirs to sell the house, you may find that buyer interest is limited and you asking price is too high for the neighborhood.
Get Pre Qualified or Pre Approved
Get pre-qualified for a loan so you have an idea of how much money you can afford to borrow. If you start house hunting without this pre-approval, you are wasting time, energy, and you may get disappointed.
The next step is to get pre-approved for a loan — this gives you an edge once you find that house you want to purchase. A pre-approval letter from a lender shows a seller that a lender has agreed to lend you a specified amount. Without this approval, you will be at a disadvantage when bidding on a home — buyers with financing in place are more attractive to sellers than those without financing. Also, by having pre-approval, you’ll avoid being beat out by another buyer who gets his financing together quicker.
Bank owned homes, government owned homes, and short sales will not allow you to submit an offer without a pre approval, pre qualification, or proof of cash funds.
Include Contingencies In Your Offer
A contingency protects home buyers should they need to back out of an offer. Without a contingency, home buyers may be penalized should they have to break a contract and not follow through with the purchase. Home buyers should consider the following contingencies as part of your purchase offer:
- Make your offer contingent on your ability to get mortgage financing. That is, if you don’t get financing, your contract is null and void. This is a common practice in the New Mexico market.
- Make your offer contingent on your acceptance of the home inspection’s findings. In New Mexico it is common to identify an amount of repairs the seller is willing to make or the seller can back out of the deal. The seller can choose to make all the repairs or the buyer and seller can negotiate an agreement satisfactory for both. The buyer may also have the right to walk from the deal.
- If you have a house you need to sell before your next home purchase, make the purchase of your next home contingent upon being able to sell the first. That way, if you can’t find a buyer for your home, you’re not roped into going through the purchase of a new one. This is more difficult for sellers to accept in a slow market, it may be better to sell your home before making offers on a new home.