Moving can be a stressful time, and buying a new property can be too, although it doesn’t have to be. Know what you need in any property, whether it is for your personal property or for investment.
First if you will be living in the property you should plan to be there for 4-7 years. This is because you will incur closing costs, you may have to sink some money into the property if it is not brand new, and it may take some time for the property to appreciate where you can sell and break even or make a profit. Remember when you sale you will incur fees for using a realtor, unless you will be selling by owner. Use the rent vs. buy calculator if you are unsure.
You should know your credit scores, if you need tips for improving your credit score, check them before getting pre-approved.
If you are an investor, know your objectives. Find out what properties rent for in the area, know the area. Use realtors to find additional information such as which area are best for rentals, research schools if your target is to rent to families. Use the rent evaluator for determining rental values in any area.
Know the market value for properties in the area you will be bidding on. Use the home value calculator to get a quick street appraisal of the property. Also know what the home prices have been selling for vs. the asking price. This will help when you go to negotiate a purchase price. Usually a realtor has access to this information.
Get pre-qualified for a loan so you know how much of a home you will be able to afford, this will help limit your search. You may not want to buy a property for the full amount you can borrow. This will depend on your comfort level. A rule of thumb is the buy a property that is about 2 and a half times the buyer(s) annual salary, so you do not overextend yourself.
Always have the property inspected, usually this is required by the lender. This will also give you valuable feedback about problems with the house. If there are major problems you will want to know about them upfront. Usually if the amount of repairs exceeds 2% of the negotiated price you will be able to back out of the deal or re-negotiate the contract. If you are not comfortable with the first inspection, get another, it is usually not too expensive for an inspection maybe $300.