Buying A House On A Budget

So you have decided to find a new home, you have searched every housing site you can find on the internet, looked through every news paper and magazine that you can find and you have found the homes you want to see.

You have met with your lender and been prequalified for your purchase, sat down and preplanned your budget with your comfort zone along with your maximum comfort amount and now you call your Realtor; add a few others he knew about and you are out the door to preview.

This is the exciting part, driving around seeing new parts of town or a whole new town if you are not from here. Walking through new and amazing houses all with thoughts of making them yours!

Now a great Realtor will do their best to show you only five to six properties per day. This is not to build your anticipation. It is to allow you to digest every thing that you have seen in this day and make a calm and well thought decision before moving on to more properties.

One of the best things that you can do at the end of each day is to take the properties that you have seen and treat them like and eye exam. Better 1 or better 2 now better 2 or better 3….Eliminating choices down to no more than 2. The same with day 2, 3, 4 however many days it takes to view all that you have chosen. By the end of your shopping bonanza you have found one that you like.

Now it is time to make an offer. This is the emotional part. All the time and emotions that have built up from the moment you decided to buy until now have a magical way of clouding the mind when it comes to finance.

The seller is asking $155,000 for this property. The bank has qualified you for a loan of this size however, when you worked out your budget you know that within your budget for closing costs and monthly payments your decided comfort range maximum is $149,000. So you offer $147,000 and the seller counters with $152,000. What do you do?

This is where the emotion kicks in to really high gear. “all that time invested in shopping”” I just know we would never find another like it”” It’s only $5000.00 more and the bank said we could afford it”. BOOOM this is where the bomb hits the ground. Right after that last thought!

Banks look at numbers and guidelines. Good banks will even get to know you on a personal level and help you plan your budget, explaining to you that just because you are qualified for an amount does not mean that it is in your best interest to spend that amount.

It’s time to stop, breath, down shift the emotions and Know Your Limits!

Purchasing real estate is an investment, not only a huge financial investment but also an investment in your family’s future and should always be treated as such. Struggling to make payments or simply spending that extra cash that you used prior to take family outings will have a negative effect on your finances and happiness.

Know your limits, once you have found your maximum comfort number stay below it or be prepaired to walk away.

The extra time spent finding the PERFECT property that not only meets your personal needs but also your financial needs will yield the best return on investment you could ask for.

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