1. Rank Your Criteria for a Vacation Home
- Define the locations you desire and note your budget. Do you desire a Golf Community, a Mountain location that is Ski-in/Ski-out, a Lakefront or lake view home or possibly a combination of these elements?
- Do you want carefree ownership and convenience of a condominium or a townhome? Or do you prefer the space, parking and privacy of a single family home?
- Other considerations are: a gated community, close proximity to amenities, proximity to town, kid friendly community, pet friendly community, how many car garage, green design, views, square footage, bedroom/bathroom count, storage space, etc.
2. Begin Your Search Online
- Begin your search online but don’t expect to learn the entire market on the internet. The internet can help answer some questions in the early stages of your search, but it can’t tell you the motivation levels of individual sellers.
- Active Professional Realtors know which sellers are motivated and which are standing firm. Professional Realtors know the market better than anybody.
3. Choose a Professional Realtor
- An experienced buyer’s agent is an extremely valuable resource and can make a big difference. He or she can help you find properties that meet your needs and will represent you during the crucial negotiation and closing process.
- A great buyer’s agent will be well-connected and refer you to reliable mortgage brokers, appraisers, home inspectors and insurance agents. These invaluable connections will help move the process along quickly and smooth out rough spots over the course of any transaction.
4. Fix Your Budget and Get Lender Pre-approved
- Setting a budget range and having financing lined up is the best way to be organized and poised to jump on that perfect property when it comes along. If you find a great home and have to wait to get pre-approved before making an offer, you could end up losing the home or wind up in a bidding war.
- Planning for 20-30 percent down will get the most favorable rates from your lender. Your pre-approval letter also states your maximum purchase price, so this will serve as a natural threshold so you won’t waste time looking at homes outside your budget. Be sure to stay in frequent contact with your lender throughout the home buying process so nothing gets overlooked and the loan can close on time.
5. Understand that Vacant Land & Construction Require Planning
- If you’re purchasing land to build your dream home, be prepared to work through a community developer approval process including permitting fees, county fees, architect fees, builder construction cost & finally an interior decorator. Because there are so many variables to consider when building a home, many people hire a construction manager to oversee their projects.
- From the initial stages of your search for vacant land to completion of your dream home, plan for a two year process. If you’re purchasing in a brand new developer community ask to review their HUD filing and infrastructure bond. Make sure to have a Realtor representing your interest to help you work with the developer sales team.
6. Consider a Completed or Spec Home
- In this market you can get a better value in a Completed Home or a Builder Spec Home. If you want to cut the time it takes to realize your dream of second home ownership and want a better value, consider an existing home versus the painful and potentially budget busting process of building a home.
- Often times you can purchase an existing home below replacement cost. If you can find a new spec home still under construction, you might even get to make some of the finishing selections.
7. Look for Motivated Sellers
- With the help and guidance of your Professional Realtor, seek out sellers who are eager to sell their properties. A number of neighborhoods are top-heavy with homes for sale, leaving sellers willing to make concessions.
- To find receptive sellers, concentrate on homes that are aggressively priced for quick sales and homes that have been on the market for a long time.
8. Make Exploratory Offers
- Frequently your Professional Realtor has already made offers on many of the existing homes on the market with prior clients. This provides insight that cannot be underestimated.
- Cash is king and paper is cheap. Be prepared to make numerous cash and non-cash offers that are less than the asking price, but not frivolous. If you are patient and willing to rationally negotiate, you’ll be sure to score a great value.
9. Request an Estimated Settlement Statement
- To avoid unexpected expenses, make sure to have the local title company provide you with a closing cost estimate. In addition to customary fees like Title & Escrow fees, be on the lookout for Private Developer Transfer fees, HOA Capital Contributions, unpaid HOA dues and property taxes by distressed sellers, Home Inspection fees, etc.
- From the lender: Credit Check fee, Appraisal fee and Loan Origination fees.
- Finally, expect your closing costs to include pre-paid portions of your insurance and property taxes to put into your escrow account. The amount depends on the month and day of your closing.
10. Look for Testimonials & Ask for References
- Any Realtor worth his/her salt will have a loyal list of clients who are enthusiastic about the service they have received. If you don’t already know your Professional Realtor, don’t be shy about asking for references from past clients. If the Realtor hesitates, move on to someone else.