Buying your first home can be both the most exciting and the scariest thing you’ve ever done. It is perhaps the largest purchase you will ever make. You want to make sure and do it right so that you can enjoy it for many years to come. Making big mistakes during the purchase can make the home seem like it owns you rather than the reverse. Following these tips will help ensure you get your dream home instead of a nightmare.
First of all, always work with a real estate agent. It may seem that you can get a better deal by leaving agent commissions out of the transaction. Agents are professionals though, and have been through this process many times. Their advice is well worth the price of admission. The buying process is very complex. They can guide you through the process to help make sure all of the due diligence is completed so there are no surprises in the end. They also know their particular market inside and out so that you can be assured you are getting your best deal. You can even have an agent represent your interests with For Sale By Owner homes. Again, a good agent will be well worth the cost.
Speaking of good agents, do your research before working with anyone during this process. Talk to friends, neighbors, family, and colleagues about who they have used for agents, lenders, title work, and inspections. Ask for references and follow up on a few to make sure they will represent you well during the process.
Another very important step is to know what you are looking for. Sit down and make a list of what is important to you and anyone else with a stake in the purchase. Rank the requirements according to priority. In a perfect world, you will find the perfect home that meets every requirement. Usually some concessions have to be made though, so understanding the non-negotiables is very important. This also is a big help to your agent as they search the listings to find the best candidates for your family. Think about things such as location, size, amenities, and school systems during this process.
Get pre-qualified for a loan. First of all, this will help you understand how much home you can qualify for. In addition, Having a pre-qualification will raise your status with the seller, especially in a case where they are reviewing multiple offers. If they know you have already met the requirements, they don’t have to worry about the transaction falling through later in the process.
There are many lending options specifically for first time buyers. Work with a qualified lender who can walk you through these options. Be careful though because some options may help get you into the home, but will cost you more over the long term. Options such as zero down seem attractive, but can add to the cost of the loan over time. Your goal should always be to put as much of a down payment as you can with as short of a loan term as you can achieve. Know your budget and target your total housing expense to be 25% or less of your monthly budget. This should include the mortgage cost, insurance, PMI (if required), and property taxes. Don’t forget that you are responsible for maintaining the home as well. There is no landlord to call when the hot water heater quits. This is a very involved topic and will be addressed more in future articles, but this gives you some goals to think about during your purchase.
These are just a few but important bits of advice to help make your first home purchase a success. Knowing what you want, how much you can afford, and working with qualified services will ensure that you are left with no regrets during the process.
Buy – Sell – Invest