As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.

Get pre-approved. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. We can give you multiple examples of buyers falling in love with a house just out of their price range. Of course, nothing in the future then compares to that “forbidden fruit.” By getting pre-approved, you can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.

Choose your mortgage carefully. Our philosophy is generally, a 15 year mortgage is better than a 30 year mortgage. You’ll pay principle down quicker (increasing equity) and making your investment more secure. Most people (us included…) don’t have the discipline to make the additional payments to accelerate a 30 year loan into a 15 year. Beware of ARMS, though there are situations they are a great option. We only recommend lenders who we would trust to handle our personal homes and who are willing to teach, not pressure, you about the process.

Do your homework before bidding. Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with sites like Consider especially sales of similar homes in the last three months. This is where our expertise comes in. We can show you statistically at what price above or below the list price homes are being sold at in that specific neighborhood.