Saturday, February 11, 2006

Spring fever: As homebuying season heats up, buyers can get head start

By Liz Garone
Special to Valley Homes

It won't be long before the clouds part and the rains give way to sunshine and warmer temperatures. As the weather heats up, so, too, will the valley real estate market as it inevitably does each year. According to local Realtors, potential homebuyers have a number of ways they can get a head start on the coming rush.

"Spring is an excellent time to buy a home," says Janet Deal of Century 21 M&M and Associates in Modesto, adding that it's never too early to start planning for what could be the biggest purchase of your lifetime.

Below is a checklist for potential homebuyers to get started on before the competition gets fierce this spring.

o Before you do anything else, obtain a copy of your credit report. When you apply for a loan, your lender will check your credit report and use it to determine if you should get the loan. "Get any discrepancies cleared up in advance. That really puts you ahead of the game," Deal says.

o Before starting your home search, it is important to figure out how much you can afford for monthly payments. You need to determine not only how much the bank will loan you, but how much you can pay after covering all of your other bills each month, Deal advises. "It's wonderful that the bank says you can qualify for $400,000, but you may not want to be strapped down that tightly," she says.

o Also look at how much you can afford for a down payment. The average down payment for first-time homebuyers is 6 percent, with almost one quarter of it coming from gifts from relatives or friends, according to the National Association of Realtors.

o During your free time, drive around neighborhoods that interest you. If you plan on raising a family in the home, do your homework regarding schools in the area. Make a list of priorities for the home you want, Deal says. Once you have figured out your price range and where you want to live, you can start checking the MLS (Metro Listing Service), the bible for home sales. Usually, you have the option to search by price, neighborhood, city, and/or size.

Now comes the tricky part: finding the right agent. One option is to ask friends for referrals. Another is to visit open houses hosted by agents who appeal to you. "That way, you can secretly see how an agent works," Deal says. "Are they anxious to be helpful, or are they just doing their time?"

o Find agents who are experts in the neighborhood where you want to live. Interview a number of them before making a commitment to any one person, advises Ron Cone, an associate broker with Re/Max Executive in Modesto. "Homebuyers should find someone who is trustworthy and who they can establish a rapport with and they feel comfortable with," says Cone, who has been in the business for more than 30 years.

o As your agent will tell you, it's time to take the plunge and get pre-approved. To do this, it's important to pick a quality lender, according to both Deal and Cone. "Make an appointment, go in and see exactly what you can afford, what you can qualify for," Deal says. It is important to be realistic, she adds. "Obviously, we can't buy champagne on a beer budget."

In the current market, many homeowners will only consider offers from buyers who have been pre-approved - and have the paperwork to prove it. "They don't want to waste their time," Deal says. For many first-time buyers, there is a lot of confusion between pre-qualification and pre-approval. Pre-qualification simply gives you an estimate of what you might qualify for, but pre-approval means that you have been through the whole application process. "There is a huge difference," Cone says. "Pre-approval means you're ready to buy."

o Before you bid on any homes, find yourself a qualified home inspector. This way, you'll be ready when you find what looks like the home of your dreams. You will want to find someone who is a member of the California Real Estate Inspection Association, recommends Deal, whose husband is a home inspector and a member of CREIA. Prices for inspections range between $250 and $375 and are paid for by the buyer. The inspector examines the home from top to bottom and will provide a written report. If there are any major problems, you can negotiate costs with the seller. Or, if the problems are really bad, you have the option to back out altogether during the inspection period, which generally lasts 17 days.

Both Deal and Cone say having a good Realtor can make all the difference when getting ready to buy. "It always comes back to working with people you can rely on," Cone says.

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