Top 10 Secrets for Success When Buying a Home in the Washington DC Area
1. Buy only if you plan to stay in the house at least three years
If you cannot commit to staying in a home for at least a few years then owning or moving is probably not for you, at least not yet. Remember there are transaction costs for selling your home in order to buy the next one, so the cost of moving may outweigh the annual appreciation rate for the first few years.
2. Get ready
If you need a mortgage to buy a house, you should make sure your credit history is clean and your credit score is high to secure the best interest rate. Before going house hunting, get a copy of your credit report, make sure it is correct, and fix any mistakes you discover. In our market area where we see multiple offers for desirable properties, the buyer with the most cash often wins the deal, so keep saving until you find the right home. Showing a large down payment will work in your favor.
3. Aim for a home you can really afford
Use on-line calculators to get a good idea of how much you really can afford, by entering your income, debt, and expenses. My website offers some very useful calculators to help you with this. When looking at houses look only at those that you can afford.
4. There are financing options even if you don’t have a 20% down payment
A variety of public and private lenders offer low-interest mortgages that require a small down payment. FHA and VA loans represent incredible opportunities for home buyers to purchase a home with less than 20% down.
5. Buy in a district with good schools
Even if you do not have school age children consider the school district. When it comes time to sell, you will learn that strong school districts are a top priority for many home buyers, thus helping to boost home values.
6. Get professional help
Even though the internet gives buyers enormous amounts of data and tremendous access to home listings, most buyers are better off using a professional agent. Look for an exclusive buyer agent who will have your interests at heart and can help you with strategies during the bidding process and ensure you have smooth sailing to closing. Virginia, DC and Maryland all have a legal requirement for a buyer and agent to have a written buyer brokerage agreement that clearly specifies their relationship once a buyer is moving forward with the intent to purchase a home.
7. Do your homework before placing an offer
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider the sales of similar homes (comps) in the last 3-6 months. The question then becomes, is it priced correctly? In Arlington, VA and the surrounding area, it is common that homes which are priced correctly will sell for very close to the asking price. Depending on the time of year and status of the inventory vs. demand, it is very common to see multiple offers on a property. If you like the property enough to place an offer, chances are another buyer like you is also interested in the property.
8. Finding your best option is a process of elimination
As you search for homes, narrow down your search by looking at neighborhoods, home styles, and factors like commute times to work. Consider where your friends live and where you are comfortable. Little by little as you visit open houses and tour with your agent, you will begin to narrow down the field and come up with a short list of homes that would work for you. No house is perfect, not even one priced in the millions, and every house has positive and negative features. It helps to know which features you consider most important as you assess your trade- offs.
9. Hire a home inspector
Chances are you did not give the home a very thorough review before placing an offer. The Regional Sales Contract we use in this area essentially says that you are buying the house “as is” at the time of the home inspection (or some other time, but most commonly the home inspection). So the report that documents your home inspection is your best written information detailing what will be one of the most expensive purchases you ever make. Hire a professional and use supplementary contractors if you want more exact information or a cost estimate on something in particular, such as a roof, retaining wall, structural issues or anything where detailed knowledge is beneficial.
Assuming your financing has been cleared-to-close you will find yourself at the settlement table signing a lot of papers and finally getting the house keys. You just purchased a home in one of the strongest real estate markets in the country. The micro-economy in this area is robust and homes here are almost always in demand. Congratulations, you are a new home owner!