For first-time homebuyers, the home buying process may look a bit daunting. You’re going into what could be the biggest purchase of your life with little to no experience to fall back on. Good news is that a little preparation can go a long way and help you approach this major life decision with confidence. Below are some tips to help you navigate this exciting experience!
Make sure you’re ready to buy, both emotionally and financially.
If you expect to relocate in a short amount of time (<3 years), this may not be the right time for you to buy. If you don’t have cash for a down payment, closing costs and other expenses, you may be better off waiting.
Find the right team.
Finding a good real estate agent is worth their weight in gold. You also want a mortgage professional lined up before you start looking.
Get your finances in order first.
You should meet with a mortgage broker or banker at the start of the process to find out how much house you can afford and how much cash you’ll need to close.
Calculate each and every cost.
Don’t forget homeowner or condo fees, homeowners insurance and real estate taxes. You’ll also need to budget for utilities, repairs and routine maintenance.
Don’t spend all your cash.
Avoid emptying your bank account for your down payment and closing costs. Don’t make any big purchases such as a new car or an expensive vacation during the mortgage process.
When you look at houses, focus on the right things.
Look at the home as a whole and don’t just focus on the previous owner’s choice of decor or wall colors. You can easily change the color of the wall but you can’t easily add a bedroom or bathroom.
If you’re buying in a condo or homeowners association, know the rules.
Know all rules and restrictions, from pet ownership to who can use the pool. Condo buyers also want to investigate the association’s finances because a poorly run association can mean big assessments later.
Visit your favorite neighborhoods at different times.
Most neighborhoods are quiet during the middle of the day so make sure you check the area during all times of the day. Take a drive by your potential home in the morning/evening to know what the area is like.
Talk to the neighbors.
Ask about the neighborhood and about the houses you’re considering. The neighbors will know if there are major problems. They’ll also know about barking dogs, petty crime and the size of utility bills.
Consider which contingencies you’re willing to waive.
In the ideal scenario, a purchase offer is contingent on a satisfactory home inspection, approval of your mortgage and an appraisal that equals the purchase price.
Be ready to move quickly once you find the home you want.
Good homes that are well-priced nearly always sell quickly. It’s OK to take some time to think before you make an offer, but you might not want to wait a few weeks. Your agent can provide invaluable advice here.
Know what’s important to you.
No house will be perfect, so where are you willing to compromise? If you want a specific school district, are you willing to accept a smaller house? Are you willing to accept a longer commute to get a larger house?