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10 Tips for First-Time Homebuyers

Michelle Roebuck April 26, 2017 0

Time Buyers

First things first: Are you ready to buy a home?
Home ownership looks like fun, but it involves more money and work than it seems. All the expenses your landlord has been paying will be your responsibility now: repairs and maintenance, taxes, utilities, garbage, water, insurance, and more.

So, if the answer to that question is “yes,” it’s time to get serious.

1. Get Ready
Buying a home is a huge life-changing, financial process with contracts, inspections, mortgages, and insurance. It affects your credit score and financial health. You can’t jump into it on a whim.

First, prepare yourself and your finances before you start looking:

  • Look at your credit score for errors. One in four Americans found errors, according to the FTC.
  • Do a few things to improve your credit score, like paying bills on time. It’s one of several things lenders analyze. A higher credit score means a lower interest rate.
  • Draw up a budget to get a picture of what you’re spending every month.
  • Look for ways to cut back on spending and then do it.
  • Don’t take on new debt, like credit cards, and avoid big purchases.
  • Start saving for the down payment, moving costs, and closing costs.

2. Get Pre-Approved
It’s important to know what you can realistically afford. Submit financial information, and then the lender calculates how much they’ll lend you and the mortgage payments you can afford. A pre-approval gives you a price range and proves to sellers that you’re ready and able to go through with the sale.

Ask yourself: What can I honestly afford? The cost is not just the monthly mortgage payments; there’s also maintenance, taxes, utilities, and insurance.

When shopping for a loan, go directly to mortgage brokers, and don’t fall for shady low-interest rate ads or online scams. The mortgage broker looks at your financial situation and helps you decide which loan type and payment options are right for you.

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3. Get Organized
Make a list of the things that are important to you and then divide it into “Must-Haves” and “Like-To-Haves.” This list is also useful in managing expectations and focusing on what is important.

I love lists so here’s another one: A checklist of all the things you need to do and documents to be gathered is a great way to stay focused. The internet and your real estate agent can tell you what should be on this list.

4. Get a Real Estate Agent
There’s advice online about choosing the right real estate agent and asking smart questions. People often find an agent through their acquaintances, but be sure to do some research before you sign an agency agreement. Hire an agent with years of experience and lots of local knowledge.

5. Start Hunting
Now’s the fun part. Most buyers start their search online to get an idea of what’s out there in their price range.  Put your lists and listing sheets in a folder and start looking at houses.

When you’re viewing houses and attending open houses, print out copies of the listing pages and write notes on the back; record your thoughts and impressions on each house to analyze later when it’s time to make a decision.

6. Do Your Homework
While you’re looking, gather the necessary paperwork: tax returns, W-2 forms, pay stubs, bank and credit card statements, residence history, and retirement account statements.

Once you’ve identified the area you want to live and narrowed the choice to a few houses, do some research. This is where your agent is crucial.

Examine the neighborhood: Look at taxes, schools, crime, house value trends, homeowner’s association, public transportation, amenities, and infrastructure. Explore the area on different days and different times. Browse local stores, especially the supermarket, and eat at local restaurants. Chat with the neighbors if you can.

7. Move Fast But Smart
If you’ve done your homework and you love the house, be prepared to move quickly. Don’t succumb to pressure to buy if you have major reservations. You don’t have to buy a house. This is a decision you’ll have to live with for years.

8. Negotiate
Everything is negotiable: price, fees, inspections, deadlines, repairs, contingencies, conditions, and personal property that stays with the house. Your agent will advise you on the best ways to get what you want.

9. Make Your Best Offer First
You’ve done your homework, got a pre-approval letter, and put your finances in order, so you should feel good about a strong first offer. Your agent will help you decide by looking at similar houses in the area.

10. Insist on a Home Inspection
Foregoing the home inspection could cost you big later. A hidden defect could cost thousands after you close. You can purchase the right to cancel the contract if the home inspector discovers serious problems.

Following these steps should put you in a great position. Remember: Your real estate agent is your guide, partner, counselor, and advocate through all of this. She will answer your questions, calm your anxieties, and lessen your stress.

Interested in becoming a real estate agent and helping people get their dream home? Take the first step with 360training.com, the one-stop shop for online real estate training.

Sources:
https://www.houselogic.com/buy/first-time-home-buyer/first-time-home-buyer-guide/
https://www.thebalance.com/how-to-buy-your-first-home-2385826

 

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