I know the spring real estate market seems a world away for many in Connecticut and the Greater Hartford region. But I just finished up my business plan for 2009 and thought it might be helpful to provide some tips for Buyers and Sellers that are planning a real estate transaction in upcoming year. It never hurts to get an early start and planning ahead will typically put you in a better position, no matter what your goals may be.
Sellers
1. Have a real estate agent stop by your home and have them do a walk through of your property. They’ll be able to give you recommendations on projects and the priority of projects you can undertake in the early weeks and months of the year to prepare your home for sale. This may include painting, decluttering, furniture placement, landscaping suggestions, etc.
2. Start touring open houses of homes in your town and neighborhood that are of the same style and vintage. This will help you get a better understanding of pricing in your market based on the condition and amenities available.
3. Start minimizing. Clean out your closets, organize your basement and attic, donate items (clothing, books, etc.) that you find you don’t use.
4. Interview a few agents at least a month before you’re ready to sell. This will give you time to select your business partner in the transaction and implement their last minute ideas before you put your home on the market.
Buyers
1. Talk with at least one mortgage broker or mortgage banker. Talking to more is usually better because you’ll find one you’re comfortable with. They’ll run your credit and give you suggestions on how to improve it, if necessary. They’ll also let you know how much you’re pre-approved for, based on your current income, assets, and liabilities. Based on this, you can determine what type of monthly payment you’d like to have and they can give you the price range you should be shopping in, based on that monthly payment. Often you’ll be qualified for more than you actually want to spend, so it’s important to find the price range where you’d feel comfortable making the monthly payments.
2. Start saving. The larger the down payment you have, the stronger buyer you’ll be. In almost all cases, you’ll need to put down at least 3% of the purchase price, so if you don’t have this type of cash lying around, you’ll need to start socking it away. You’ll also need cash for closing costs (if you can’t get the seller to give you a closing cost credit), and those typically run between 2-3% of the purchase price. So, more money to save for your purchase. If you are lucky enough to be able to put 20% down, you can avoid the dreaded PMI.
3. Start visiting open houses in various towns. This will help you get a better understanding of how much space you might need, what you’ll be able to afford, and if you can handle a home that might need work or one that needs to be in move-in condition.
4. Interview a few real estate agents to find one you’d like to work with. Treat the interviews like you’re hiring an employee. The agent will be working on your behalf on one of the most important purchases you’ll ever make, so it’s important to hire the right person for your needs.
Following these simple steps will help make preparing your home for sale a more manageable process. As a buyer, you’ll be in a good position to react quickly once you do find the home that meets your needs and price range.