If you have a structured settlement in place – RIGHT ON. You’re in a perfect position to sell your structured settlement payments for a lump sum and use the cash to buy a new home. It’s the American dream, after all!
But let’s get serious for a minute. Selling your gradual payments is how you get the lump sum you need so you can be financially set to pursue your home-buying dreams!
Selling your payments is small potatoes in the grand scheme of things—buying a new home means next-level financial planning. And being patient throughout the process is an understatement. Seriously. Most people who’ve never purchased a home grossly underestimate the potential hiccups that can delay the sale.
So to make things easier, we’ve put together a short list of must-dos before making an offer on your new dream home. Following these steps can help make the process go much more smoothly, as you’ll be able to anticipate what’s required.
Without further ado, here are 5 things you should do before making an offer on a home:
1. Shop for a Real Estate Agent
Like any professional, real estate agents come with varying levels of experience. Checking out their reviews on sites like Zillow.com will help you choose the right real estate agent who’ll hone in on your perfect abode. The right agents will of course have years of experience and high marks on their ability to listen and make the right recommendations. You’ll want to avoid agents who are pushy, try to sell you homes which are out of your price range (what is this, HGTV??), or make you do most of the legwork. A great real estate agent will be knowledgeable of your financial standing and guide you along the way to your perfect home.
2. Get Pre-qualified for a Mortgage (if you need it)
You’ve found a reputable company to buy structured settlement payments from you for a lump sum of cash (hooray!), but perhaps you still need an extra financial boost to help you purchase your new home. A common way to do this is to seek out a mortgage banker who can supplement the cost. You’ll likely need to provide financial information including tax docs, pay stubs, etc. in order to get pre-qualified for a mortgage. Getting pre-qualified will reveal how much you can spend on your home (over and above the lump sum you’d receive from selling your structured settlement payments).
3. Check Out Homes for Sale
Here’s where things get interesting! After providing your must-haves and nice-to-haves to your real estate agent, you can begin “shopping” for a new home. Your real estate agent should be able to come up with a list of homes that tick all your boxes, but you can also do some independent research on the web; sites like Ziprealty.com and Trulia.com are good options for gathering up-to-date listings and other info.
Also, a great open-concept kitchen and bathroom with double sinks might be high on your list, but be sure to also check out nearby restaurants, schools, amenities, and the neighborhood at large. If you work, estimate commute time to and from your job. Because…it’s not just about the home, right? It’s about the new life that awaits you!
4. Get a Home Inspection
An independent inspection is usually par for the course in buying a new home. It’s a relatively inexpensive way to gauge the condition of your intended dwelling. A good home inspector will reveal issues about the home that you might not have thought about. They’ll also provide you with a clear picture of required home renovations or repairs. If termites, faulty electrical wiring, uneven floors, and other issues bubble to the surface during the inspection, then it’s probably a good idea to keep shopping around.
5. Get an Appraisal
Whether or not you work with a bank lender, you’ll want to get your intended home appraised. This will solidify its value based on comparative homes in the area. The appraisal will inform all parties involved that you’ll be paying a fair price.
We’re confident that this quick list will help get through the home-buying process. And, with a lump sum of cash at the ready, you’ll be poised for any unexpected fees too. Just image: Closing costs and even the principal could be paid in one fell swoop. Bottom line, selling your structured settlement is an amazing way to solidify your dream of being a homeowner. We can’t wait until you do!