Buying a Home - the Home search

Most people begin their home search by beginning to attend Open  Houses. This is a great way to begin. It helps you begin to work out  what are needs, wants, and 'have to haves' - not only do you begin to  get a feel for the type of home you want, and can afford, but you get an  idea of the different neighborhoods that exist, and the towns that end  up being options for you. Once you have a firmer idea of where you want  to live, and the type of home you want, you can begin to get a bit more  serious. Once you find the right home know that a 'normal' closing is  6-8 weeks, so if you have a definite timeframe for which you need to be  in your new home, factor this into your plans as well. Its not just  finding the right home, you need to consider the whole process that  occurs after you find the right home as well.

Find a buyers agent

When you begin to get serious about finding a home, the first step is  to find a buyers agent to help you. Ask your colleagues at work, at  school, people who you respect their opinion, to ask if they know of a  good real estate agent.  Along with every profession, there are good  agents and poor agents. Find a good agent. Even if you know a good agent  but they don't work in the same area that you want to buy, often they  can assist in finding you a good agent in the area that you do want to  buy in. You may also have struck up a conversation with an agent who was  hosting an Open House that you went to, and you like the way you  communicated - more often than not, that agent would be more than happy  to assist you in your home search. Once you believe you have narrowed down on an agent to use check out their online reviews - see what others are saying about their experiences with that agent.  To check out what our clients have been saying about us, go to Our Success Stories

Preapproval

Once you have an agent to work with, the next step is to obtain a  preapproval. The term 'prequalification' is used interchangeably with a preapproval within real estate although the banks consider them a different component. A preapproval can be obtained from any mortgage broker or  bank loan officer - you do not need to shop around for a mortgage prior  to getting a preapproval - a preapproval is simply where the mortgage  broker has run your credit, asked you about your liabilities and income  in order to determine a mortgage amount you will qualify for, and thus, the purchase price of a home. It's important to remember that you do NOT need to spend this  amount - this is just the amount that you will qualify for but you do  not need to buy for this amount, you can buy for less. Its important to  do your homework first with regard to the preapproval. There is nothing  worse than hunting for your perfect home, finding it, and then going to  the bank and finding out that you cannot afford it. Know your limits  before you start. 

Set up an MLS Search

Your agent will set you up with a daily email alert from within MLS  (Multiple Listing Service) so that you know when something comes on the  market. If you have a fairly defined search area and criteria, your  agent will also keep an eye out for a home in those towns for you - if  you are looking in more than 3 towns then it becomes a little harder  for your agent to keep an eye on potentials for you because of how  frequently homes come on and off the market, and if you haven't begun to  focus on a specific area, its almost impossible to keep track of what  comes on and off specifically for you.

Seeing houses with your agent

Your agent should suggest taking you out on a tour. Its valuable to  spend time in the car with your agent - your agents goal should be to  help you learn about the area, learn about the real estate market in  general, learn about the process of buying and just generally answering  any of your questions. When you are in a house, your agent should point  out various things of note to you. If a house has any features which may  impact resale in the future, your agent should be pointing these out to  you so that you take them into consideration.

Which town is right for you?

A lot of folks struggle to decide where they should buy. I often chat  about the fact that deciding where to buy generally depends on 3  criteria; 1) Commute distance to Boston, 2) School system, 3) How much  house you can buy for the money. Most buyers often need to compromise on  one of these criteria.  For example if you want a good school system,  and be close to Boston, then you may have to compromise on how much  house you can buy for your money. Or, if you want a good school system  and as much house as you can buy for the money, you may have to buy in  an area where the commute is not great. Another alternative is that if  you want to buy a good amount of house for the money, you want a good  commute, then you may be looking at a school system that is not  considered to be a good school system.

I always quote to folks that you should buy the most you can afford,  in the best town you can afford. From a resale perspective, buying in  the best town you can afford is like buying blue-chip stocks - it is  less riskier when you buy in a town that has an established, good  reputation, and that any improvements you make to the home will not be  overcapitalizing on what the area can support. There are various  fundamentals that I recommend considering when you buy. You should  always buy something that 80% of the buyers, after you, will also want  to buy. You should buy a house that is commonly seen in the neighborhood  - for instance, don't buy a contemporary style home in an area of  traditional homes.  If you want a contemporary home then buy one in an area with a lot of contemporary homes.  Other considerations are that you  should never buy the best house in the street - all of the lesser priced  homes around you will have a downward pressure on the price  of your home. A home on a busy street will always be harder to sell  than a home in a neighborhood and on a quiet side street. Even if you do  buy a home on a busy street, so long as you are not paying the same  price as what that home would sell for on a side street, you are not as  bad off as if you are if you are paying the same price. A busy street  location should come with a significant discount for the same house in a  side street location. If you buy a home with a significant negative,  for instance, on a busy road, backing onto a major highway, next door to  a cemetery, no backyard, poor school system town, high crime area as  examples, know that your home will still sell, it will just take a lot  longer to sell than a home without the associated 'negative'.

Homework is important

Doing your homework is important. Your agent should be able to guide  you as to how quickly homes are selling in your town, inventory levels  and absorption data, and the average days on the market homes are  staying on the market. It's important to assess the home that you are  planning on buying to understand how long the home has been on the  market, whether its had any price reductions in that time, or been under  agreement at any point during its time on the market. Your agent should  have all of this information for you, and should also provide  information on comparable homes that have sold in the area recently.

If you have seen all of the homes on the market currently in the town  and price range of your preference, then you and your agent will watch  the market on a daily basis for new houses entering the market.

When a new home comes on the market that has potential, all of the  serious buyers will get in to see the home within a week or two of it  being on the market. So, if a home has been on the market for 3 weeks or  more, we can generally say that the market is telling us that the home  is overpriced. If a home is priced well, it will attract an offer within  the first 3 weeks of being on the market at this price. This is because  there are many buyers who have seen everything on the market while  searching for a home, and when something new comes on that is priced  well, then there are many buyers 'ready to go' to buy it.

For a statistical analysis about the real estate market in a town you are interested in we have several publications you may be interested in. Here is an example of a market review booklet we produced for the Lexington market.

If you have any questions about any of this then please don't hesitate to reach out to one of us. We would be more than happy to help.