7 Things to Do Before Buying a Home

For most people, buying a home in Roanoke is the largest financial transaction they will ever make. With that in mind, it's important to make the right preparations and do the proper research before buying a home -- in Roanoke or anywhere else for that matter.

It goes without saying that the home buying process will vary from one buyer to another. Some buyers have plenty of money to put down, for example, while others do not. Some buyers have excellent credit, while others are "credit challenged." And so on.

With that being said, there is a certain process to buying a home in Roanoke that most people will follow, in some form or fashion. For example, here are seven things you must do before buying your new home.

1. Study the home buying process.
By understanding the overall process to buying a home, you will make better decisions along the way because they will be informed decisions. Home buying lingo is a big part of this, so be sure to read through a few home-buying glossaries before you get into the thick of things. The Department of Housing and Urban Development (HUD) is a good place to start. Their website has a pretty extensive guide to the home buying process.

Helpful resource: HUD Home Buying Guide

2. Determine your budget.
Setting a realistic budget for yourself is a critical first step. This is the key to buying within your means and avoiding mortgage problems down the road. For starters, use a mortgage calculator (like the one on our website) to get an idea of how much you can afford to pay each month, and what that equates to in terms of a home price.

Helpful resource: Mortgage calculator on our site

3. Get your credit reports.
Credit has always been important for home buyers, but it's even more important these days. In the wake of the mortgage crisis that came to a head in 2007, most mortgage lenders have tightened their standards with regard to credit scores and mortgage approval. Start by getting a copy of your credit reports and reviewing them for errors (yes, you have more than one credit report). You can get copies of all three credit reports at one time (and for free) by visiting www.AnnualCreditReport.com.

Helpful resource: Credit score info at Home Buying Institute

4. Fix credit errors quickly.
If you find an error on your credit report, go to the company's website where the report came from (TransUnion, Equifax or Experian) to contest it. It can take time to clean up an erroneous credit report, so get started as soon as you spot the error. It's also wise to request your credit score (different from your credit report) through a website like MyFICO.com. This way, you can see where you fall compared to the national average, and whether or not you need to improve your score.

5. Start saving your cash.
This is one of the best things you can do before starting the home buying process in Roanoke, Virginia, and for two reasons. First of all, Roanoke mortgage lenders like to see that you have some cash reserves on hand. Secondly, you'll need cash reserves for any unexpected fees or costs that might arise during the home buying process, which is fairly common.

6. Get pre-approved for a loan.
During pre-approval, a mortgage lender will review your credit, finances, debt, etc. and conditionally qualify you for a certain amount of mortgage. Home sellers will take you more seriously if you have a pre-approval letter, and the process also helps identify any problems with your credit or other qualifying factors.

7. Get a home inspection.
Some buyers will ask, "Do I really need a home inspection?" Let me answer that with a resounding yes! It's always a good idea to get a home inspection prior to buying a home in Roanoke. A house is a significant financial investment. The last thing you want is to find a bunch of things wrong with the house after you've taken ownership. At just a few hundred dollars, home inspections are very affordable considering the peace of mind they bring.

Roanoke Valley Realtors - How to Choose

Choosing a Realtor to represent you in the home buying or selling process is an important step in that process. After all, there are large sums of money involved with buying and selling real estate, so it's always wise to have professional help.

But how do you go about choosing a Roanoke Valley Realtor to represent you? This question is on the minds of a lot of Roanoke home buyers and sellers, so I'd like to offer my insight on the subject.

What's a Realtor Anyway?

Let's start off with some basic definitions. Realtor is often used interchangeably with the term "real estate agent," but they are not exactly the same thing. Being a Roanoke real estate agent means that you have passed a real estate licensing exam and are legally qualified to practice real estate in the state of Virginia (in this case, within the Roanoke Valley area).

Becoming a real estate agent is also the first step to becoming a Realtor. But there is more to it than that. Both Jim and I are Roanoke Realtors, meaning that we are members of the NATIONAL ASSOCIATION OF REALTORS® (NAR). This is a professional organization that holds us (and other Roanoke Valley Realtors) to a certain standard of professionalism and education. We are also members of the Roanoke Valley Association of Realtors -- in fact, Jim is a former director of that organization.

So while all Realtors are real estate agents, not all agents are Realtors. It requires additional training and certification to become a Realtor in the Roanoke Valley (or anywhere else for that matter).

Choosing a Roanoke Realtor

So now that you know what a Realtor is, how do you go about choosing one? Well, if you want to save some time and energy, we certainly invite you to contact us with your real estate needs. We represent the entire Roanoke Valley, including the Botetourt area, and we'd be happy to answer any questions you have.

But if you'd like to do some homework and screen other Realtors as well, here are some things to keep in mind:

• The real estate professional you choose should be a good communicator. After all, he or she will represent you in the home buying / selling process.
• Because much of the real estate process is conducted online these days (such as property searches), your chosen Realtor should be Internet-savvy.
• The Realtor you choose should have a good track-record of success helping buyers or sellers, whichever is more applicable to you. Ideally, he or she can support this with testimonials and/or references from past clients.

These are certainly not the only things to look for in a Realtor, but they are some of the most important criteria. If you have questions about buying or selling a home in the Roanoke Valley, please feel free to give us a call.

Buying Roanoke Real Estate Within Your Means

Summary: When buying real estate in Roanoke you must first determine your financial means and your budget. And then you should buy within those limits.

If you've been watching the news lately, you've probably seen plenty of stories about the number of foreclosed homes in Roanoke right now (and across the country as a whole).

There is a lot of finger-pointing about who is to blame for the "mortgage crisis," as it has been dubbed. Some blame the mortgage companies for being over-aggressive and deceptive with their lending, while others blame the government for looking the other way. Perhaps there is justification for both.

But here's the bottom line. As consumers, we must be smart about buying real estate and taking on a mortgage loan. We must be responsible for our own actions when making purchases, and we must do the proper research to ensure we don't get "burned" in some way.

How does this apply to buying real estate in Roanoke, Virginia? Well, for one thing, you should always go through your due diligence when shopping for a mortgage loan. This means, above all, buying within your means.

Many of the people who have been foreclosed upon bought more home than they could afford. Sure, the teaser rate on that adjustable mortgage loan seemed appealing ... but those rates are temporary. This is an example where the home buyer should do research to find out (A) when the rate is going to adjust, (B) how much higher the mortgage payment may be, and (C) if they could realistically afford the home after the mortgage resets.

But many homeowners in Roanoke and elsewhere did not ask the right kinds of questions in advance, and so (unfortunately) they often wound up as yet another foreclosure statistic.

How to Buy Within Your Means

Start by looking at your net monthly income and your monthly debt (credit card bills, car payments, etc.). Then subtract other monthly expenses as well, such as school, shopping, savings, etc. How much do you have left over for a monthly mortgage payment? Keep that number in mind when shopping for homes.

Use a mortgage calculator (such as the one at the top of our Buyer Info page) to divide an average home price into its monthly mortgage payments. This will give you an idea of how much of a home you can afford, based on the monthly payment. Of course, the monthly payment will partly be determined by the interest rate you get on the loan, which will be determined by your credit history and other factors. But this will give you a good idea of where you stand.

It can be tempting to "buy over our heads" when it comes to real estate. Everyone has felt the temptation to buy that beautiful home that's just a little over the budget. But you have to exercise caution when buying Roanoke real estate ... you have to do the proper research and ask the right questions ... and, above all else, you have to buy within your means.

Good luck with your Roanoke real estate experience! If I can help you in any way, please contact me.

The Real Estate Closing Process Explained

Many first-time buyers are curious about the closing process (also referred to as "settlement"), as they very well should be. It's an important part of the home buying process, so it should be on your list of topics when researching Roanoke real estate.

The real estate closing is the final stage in the home buying process. This is where the title is transferred from the seller to the buyer. There's a lot of paperwork involved, some fees associated with that paperwork, and finally the handing over of the house keys!

Closing Costs When Buying a Home

It's important to prepare for the costs associated with closing. Some buyers are caught off guard by these costs, which is certainly the last thing you want. These costs include such things as the loan origination fee, the home appraisal fee, document preparation fees ... basically, fees and more fees.

On average, closing costs tally up to around $3,500 tp $5,000 depending on your loan amount.

If you have questions about the closing process, or anything else associated with the real estate process in Roanoke, Virginia, please contact me.

Welcome to the Roanoke Real Estate Blog

This is the first post on the all-new Roanoke Real Estate Blog. We started this blog to help keep our readers, clients, and potential clients informed on all aspects of the real estate market in the Roanoke area.

We will use this blog for:

• New home listings
• Market news and updates
• Real estate tips and advice
• Event notifications (such as open houses)
• Other helpful items related to Roanoke real estate

If you would like to leave a comment on this or any other blog post, please use the "Comments" feature below. Thanks for visiting.