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Three steps to ensure you get best deal when buying a house

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POSTED April 2, 2011 3:00 a.m.
Ample inventory, low mortgage rates and motivated sellers - all these key elements are present in real estate markets across the country, indicating it’s still a great time to buy a house. If you’re thinking of buying a house - whether it’s new or existing, your first home or your fifth - you can help ensure you get the best possible deal by doing a few things before you get down to serious shopping.

1. Check your credit
You might think that getting pre-approved for a mortgage is your first step in home-shopping, and it is an important one. But before you talk to a potential lender, you should check your credit report and score - because the mortgage company certainly will. Your credit score is a reflection of your credit status, and one that potential lenders will consider when assessing your credit worthiness. Knowing your credit standing can make you better prepared to secure the best possible conditions and rates for a home loan.

It’s a good idea to monitor your credit for a while before making a move to apply for a mortgage. Websites like freecreditscore.com allow you to access your credit score when you enroll in credit monitoring. By monitoring your credit, you’ll be able to see how changes in your credit report can affect your score, and you’ll receive credit score alerts whenever your score changes.

2. Capitalize on lender competition
When it’s time to apply for a mortgage, many people turn to the banks they’re used to dealing with on a regular basis. While banks are definitely a familiar source of home financing, they’re not the only one. Even after the mortgage crisis, you’ll still find many companies in the home loan field. Wading through the plethora of claims from lending companies can be time consuming - but well worth it.

Despite the credit crunch - or perhaps because of it - competition is fierce among lenders to work with the best-qualified buyers. That means if your credit score and report are good, you could be in a position to snag the loan terms and interest rates reserved for the most-desirable borrowers. But you’ll still have to compare rates and offers from a number of companies.

Be sure to thoroughly investigate any lender you’re considering applying with; the Internet is a great resource. Check out the Better Business Bureau website to see if the lender has any complaints against them, and type the name into your search engine to see if they’ve made the news - in a good or bad way.

3. Leverage a Realtor relationship
It’s true that many would-be homebuyers are now using the Internet to facilitate their search. Yet 79 percent of all buyers last year purchased their home through a real estate agent or broker, according to the National Association of Realtors.

While it is possible to buy a home without the aid of a Realtor, working with one has several benefits. Realtors strive to be experts about the communities they work in, so a Realtor can provide you with valuable advice on home prices, schools, recreation and businesses, as well as other information about the area you’re interested in. Another bonus - as a buyer, you pay the Realtor nothing. He or she will share a percentage of the commission the home sellers pay to their Realtor.

Buying a house is a big investment - the biggest most people make in their lives - but with some preparation and smart negotiations, you can ensure you’re well positioned to take advantage of the current buyers’ market.
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