Buying a home can be a really fun process, but it can also be overwhelming. After all, there are a lot of different options for physicians when it comes to home loans. Plus, let’s be honest, after spending so much time in school and in training, it’s really important that you find a house you love – something you enjoy coming home to after a long day in the office.
So, in order to ensure you do actually get the perfect house at the right price, follow the five tips below.
Get a Written Mortgage Pre-Approval Letter
Whether you are trying to apply for a physician loan or any other type of mortgage, getting a mortgage pre-approval letter from an actual lender will show a seller that you are a serious buyer.
Don’t fall prey to mortgage brokers that advertise mortgage pre-qualification as it means absolutely nothing. Pre-qualification means that based on the information you have provided (that they have not verified,) it appears you can obtain a home loan.
So, make sure the pre-approval is in writing so you can submit it with your offer on the home. In order to get the pre-approval in writing, the lender will need to take a loan application and verify your employment and pull your credit report. An added benefit to getting pre-approved is that you will know your maximum loan amount. Of course, you shouldn’t take out the maximum you are qualified to receive, but it’s a good thing to know when just starting your search.
Know Your Priorities When it Comes To Your Future Home
Before you begin your search, understand that there are two homes out there vying for your interest: the one that meets your needs vs the one that fulfills your dreams and desires.
In a perfect world, you will find a home that meets both, but in reality, you will have to make the choice. While it sounds like I am referring to the price of the home, it’s not entirely what I mean.
For example, do you choose the three bedroom home with room for your family to grow, or do you go with the home that has the massive backyard perfect for entertaining? Is it more important to have a bigger kitchen or the extra bedroom for guests?
These types of questions will come up, so make sure you know what is really important to you and what is more of a luxury that you could potentially do without.
When you start looking for a home, you will find homes that you fall in love with for different reasons. This is why I would make a list of features you want before you start looking. Break it into two categories, needs and desires, and then prioritize the list. What do you absolutely need in your home and what can you live without?
You can start by looking at sites like Redfin or Zillow for homes available for sale. Don’t rely on their estimates of home values as those tend to be incorrect, but the other property information is normally pretty accurate.
Take Your Time
Self-discipline when looking to purchase a home is hard. While everyone’s situation is different, it often pays to shop for a new home during the slower times of the year (usually Nov-Feb). There tends to be less competition and an increased supply of homes on the market.
Buying a home is a major decision so take your time, and don’t rush one of your biggest purchases in your lifetime. Buyers who rush into buying a home (like a physician trying to buy a home when accepting their first job out of training) have a higher likelihood of making costly mistakes.
Work With a Highly Experienced Agent
A knowledgeable agent will have knowledge and experience from years of helping buyers and sellers. They will have a team of professionals they have used many times (think lenders, home inspectors, movers etc.) at your disposal. They will be able to provide you with comparative market analysis (CMA also known as “Comps”) that will help establish the value of the home you are interested in and assist you in creating the best offer for you.
A word of caution: beware of any agent that is forcing you to sign a buyer’s contract with them for longer than 60 days. A better alternative is to sign a 30 day buyer’s agency contract with the understanding that you will extend if the agent hasn’t found you the perfect home but is doing a good job. That way you are locked in with a lazy agent and months wasted waiting for the contract to expire.
Location, Location, Location
This is a phrase we’ve all heard, but it’s true. The location of a home is a big deal and is one of the main drivers of price stability and growth. Buying the worst home in a great neighborhood will always outperform the best home in a bad neighborhood over time. Do not compromise on location; it isn’t worth it.
The following are a few tips concerning location. Even if you don’t plan on having kids, choosing a home within a good school district is always a wise decision. Values of homes in good school districts tend to hold their values better than similar homes in weaker school districts.
Make sure to check the local crime rates when evaluating your new home. When you have narrowed it down to a home you really like, make sure to drive by it at different times of the day to check traffic flow and traffic noise. Take notice if the home is in a flood area or is adjacent/nearby a railroad.
While the commute to work is important, the location of other services and amenities it is often overlooked. Pretend as if you are driving to the grocery store or other errands you frequently partake in to see if the home you like is in a good location.
Also, make your offers contingent on your approval of a professional home inspection report. You should always accompany your inspector during their walkthrough to discuss anything potentially wrong with the home that the seller failed to disclose.
Ultimately, if you take your time when selecting a lender, your real estate agent, and choosing a home to buy, you’re less likely to make mistakes that could cost you in the long run. Just remember not to rush the process as this is a huge investment, probably only second to the investment you made in your medical education.