Ten Tips for Your First Home Purchase
Buying your first home can be stressful, but lets make it just a bit easier by going through some common questions.
1. How do I get started?
Your first step should be to start thing of what might be important to you in a home. If you are purchasing with another individual, significant other, or partner, be sure you are on the same page of what you are both looking for in a future home. Whether that is yard space, natural light, or how much work you might want to tolerate.
2. Get Pre-Approved
This could arguably be the first step, but the next move should be to start shopping around for lenders and getting a pre-approval. You may have some general idea of what you can afford but getting an official pre-approval from one or several lenders will help you zero in on what your purchasing power is. Once you know this number it will be a big help in narrowing down your options and preventing you from being overwhelmed by all the available listings on the market.
3. Find a Buyer’s Agent
Your real estate agent is a crucial part in the buying process. They can be a great aid in helping you avoid future headaches, helping you see what’s important to you in a future home, providing contractual and offer advice, and being your supporter. Your agent should be guiding you and providing clarity when needed, and providing you with the ability to confidently browse the market and submit offers when necessary. Many times an agent local to your neighborhood or city can be invaluable as they have intimate knowledge of the listings and good rapport with other agents.
4. How Much is a Down Payment?
Down payments vary in size and amount all the time; it is most common for buyers to put 20% of the purchase price as the down payment. If this number feels like a lot, there are many other programs that can accommodate a lower down payment. For example, FHA (Federal Housing Authority) borrowers might put down as little as 3.5%. Keep in mind, when putting down less than 20%, you may have to pay private mortgage insurance (PMI). A knowledgeable lender will be able to guide you through all your options and down payment amounts.
5. Open Houses
Open houses can be a wonderful opportunity to see what is available on the market and help to give an idea of what a certain price range will tend to offer. It will also help you get an idea of what certain neighborhoods are like when people are not at work.
6. Private Showings
Aside from Open Houses, I would urge a buyer to schedule private showings through your buyer’s agent or through the listing agent if you have not found a buyer’s agent. It can be quite helpful if you are serious about a certain property to see it alone. It will give you the chance to really take a deep look at the property, with all its pros and cons.
7. Finding the Right House
When you begin to look with the intent to purchase, have your pre-approval ready, and have mentally prepared yourself for the road ahead, be prepared to write offers. The home that is right for you may come along quickly, so it is imperative to be ready for that instance. A good suggestion is to remember what might be important to you in a home. Many homes on the market may not check all your boxes, and that is very much ok. Be ready because you might just find the right one, with just about everything.
8. Making an Offer
The most important things to consider when writing an offer:
- The comparable sales in the neighborhood
- Your budget vs. the listing price
- Being prepared that you may not get your offer accepted.
9. Your Inspection
In the event that you do get your offer accepted, be ready to schedule your inspection. If you do not know of a reputable inspector, your buyer’s agent should have a few recommendations for you. They will spend a few hours going through the property and noting all it’s defects that were not visible to you when you first saw the property. Many times, if issues come up that were not visible to you they can be negotiated via a credit from the seller or a reduction in the purchase price. Be sure to schedule the inspection as quickly as possible so there is still time to get quotes or hire other professionals like plumbers or electricians.
10. Mistakes to Avoid
Make sure to try to keep emotions at bay during your first purchase. It is easy to get emotionally attached to a property which can cloud your judgement. Your buyer’s agent should try to gently remind you of this. Buying a home is stressful and exciting and it is easy to get caught up in all the twists and turns. Make sure you are on the same page as your purchasing partner, clear communication can make all the difference in avoiding future issues. Remember to be grateful for the position that you are in, not all can purchase a home and this is a special experience.
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