Buyer's Guide To Purchasing Vacation Property

Buyer’s Guide To Purchasing Vacation Property

With the current market and rock bottom interest rates, you might be hesitant to dive into purchasing a secondary home for family vacations, but now might just be the perfect opportunity for you to think seriously about doing just that and we are going to tell you how. 

How Prepared Are You To Buy?

The first thing to consider is, “Have I saved enough down?” Lenders are going to want to see that you’ve saved at least 10%-20% of the projected purchase price. Because this is a secondary home, they’ll want to see that you can carry both loans on your salary or salaries within a certain loan to debt ratio. Can you also afford the incidental expenses of your vacation home, such as utilities, repairs and furnishings? If you are counting on supplemental income such as VRBO rentals, then you are not ready. There are some municipalities and HOA’s that do not allow VRBO’s, so do your research and if you’re counting on the income to make the payments, then you can’t afford it yet. 

Once you decide, initially, that you think you are now ready to find that vacation property, you’ll need a good lender. Did you have a great experience with your primary home lender? Are they local and responsive? Reach out to them and see what rates they’re offering and most important, ask what their average loan origination fee is. Every lending company has different rates. Higher doesn’t always mean better, so read reviews not only about the company, but the lender you speak to as well. Once you determine who you want to work with, get a preapproval. You’re now ready to go shopping.

Determining Where To Buy and How To Select A Real Estate Agent

Factors to consider in where you look for that vacation home are things like, distance from your primary residence, method of transportation to and from primary to vacation home, and how long you anticipate wanting to remain vacationing in that spot. Maybe you have a childhood spot you adore, well then it’s a no brainer. If you spot a home in an area you’re not familiar with, you may want to rent a room close by for a weekend to see if it’s a place you’ll want to be at when away from home. 

Now you’ll want to find an Agent to help you secure your vacation home, but how? Just as I have mentioned above, did you have a pleasant experience with the agent who sold you your primary home? Reach out if so, but if you are stuck, your last agent retired or you didn’t have a good experience, you can always ask your lender for referrals. They often have preferred agents that they know will successfully help a transaction to close. If they do recommend one, please interview them thoroughly. You will never know how you mesh with someone until you speak to them. Don’t be afraid to say no or move on if not satisfied. You want an agent that listens to you and wants to make you happy. Ask friends and family if they have someone they recommend as well. Don’t skip the interview part, that’s still important. 

Making A Competitive Offer

This will be highly dependent on the time of year and the market, but when you find the one you want, you’ll want your offer to stand out. Think of it as a baseball game and just know you’ll want to hit it out of the park! This is where your agent comes in. You’ll need one with a terrific sense of the art of negotiation. In a seller’s market, you will have to do certain things that make you stand out from other deals and not insulting to the seller. In a buyer’s market, your agent will have a lot of leeway to negotiate a better price, once again not insulting the seller. I won’t give away “the sauce” about specific tools in my sales and negotiation arsenal without our team working with you but if you’re interested in finding out then give us a call and we’ll be happy to help you find your dream vacation home or even a primary home, land or help you sell as well. Our team covers the Puget Sound area of Washington State. We can help you from Olympia to Seattle, the peninsula, and Ocean Shores! You can find us on social media at The Amy Group.

For more information about lenders, loans and what you need to do to qualify, call: