Everyone wants to own their own home. Purchasing a home for the first time is not an easy task. First, you need to be able to financially afford one, which means either having the capital or being able to qualify for a loan and then you need to find a suitable property. Here are some of the main things you will need to consider as a first time home buyer.
Do Your Homework:
If you are a first time home buyer, then you will definitely need to do your homework. There are many things which need to be done before you can even go out and look for a realtor. You need know what area you are moving to, how much space you need, what you can afford, and how much time you have. Once you know all these things, then it’s time to approach a realtor.
Unless you are wealthy, or extremely lucky, you probably won’t be able to purchase your first home with cash. This means you will need to secure some sort of financing. There are a variety of ways you can go about securing financing. Some of these include:
Taking out your savings (Not generally an option, but if you have the ability, better to use what you have and not go into debt)
Take out a loan from the bank (This is the most common option)
Get a loan from a friend or colleague (If you have friends with money, why not mooch a bit?)
Find a Licensed Real Estate Agent:
As you are a first time home buyer it is important to have a licensed real estate agent help you. This is because there are many legal aspects that won’t be immediately obvious, and also because you will want someone looking out for your interests and not just trying to get the highest price for the seller. Not only that, but a licensed real estate agent can tell you what sort of home you can get for your budget, and also be able to help you analyze the homes you go through and see if it is a good buy or not.
Do your Own Market Comparison:
While your realtor is busy looking for homes for you, you will also need to be doing your own research. Your realtor can help by giving you CMAs (comparative market analysis) of the different properties, but you will also need to do your own research to see if the property fits all your criteria. For example, you will need to find out what kind of neighborhood the home is in, what sorts of services are available, and what schools are around if you have children. Sure, most of this information can be gotten online, or through the CMA, but it is better if you get the information yourself first hand. Before or after going to showings, you might spend some time in the neighborhood scoping it out.
Schedule a Showing:
One of the hardest things for first time home buyers to do is schedule a showing. This is because more often than not they are looking for the “perfect home”. The “perfect home” does not exist, and there will always be compromises that will need to be made, no matter where the property is located, how much it costs, or what it is close to. Remember that you aren’t going to find something that meets all your criteria, and you need to decide which criteria are MOST important to you, select the properties which most closely fit those, and go out and see them. You will find that once you walk around a property, all those things you didn’t like about it before, might seem less of a problem up close.
Pay Close Attention to Detail:
So you have had a showing and you liked the property, and are thinking about buying it. What next? Well, you will want to go over the property again with a fine toothed comb and see if the property is truly what you are looking for. It isn’t only the number of rooms, or the size of the home. You need to check the foundation, roof, plumbing, electrical and other assorted things as well. You will want to keep a list, and get a home inspection done to see what needs to be repaired or replaced. This will allow you to know if you are putting in a fair offer or not, and also if you still want to purchase the property.
Things to Remember for First Time Home Buyers:
- Remember to do your homework. You can never have too much market research!
- Be willing to compromise. You aren’t going to get EVERYTHING you want first time out.
- Don’t reject a good offer just because there are some minor inconveniences with the property. You might need to be willing to roll up those sleeves and do a bit of work.
- Try and negotiate. Remember, a lot of time the list price is not written in stone and can be changed according to many different factors.
- Speak to the owner of the property directly. If it is a short sale or a foreclosure, this might be harder, but only the original property owner will be able to accurately answer important questions about the property.
- Have all your paperwork in order.
- Get a home inspection done by a professional. This is important as it will help determine the final price of the home, and if you really want to buy it or not.
- Try to keep your down payment to a minimum, to help have some extra cash on hand for any repairs you may need to make to the home.
- Don’t get too emotional. While it is easy to get caught up in the process of buying your first home you will want to keep your emotions in check. You need to be able to analyze the information you get with a cool head, and take your time to check all the little details you may miss the first time through in your excitement.
- Always use a licensed real estate agent to represent you. This what you know you are protected. John Herman and his team are always ready to help.
Common Mistakes Made by First Time Home Buyers:
- Tunnel Vision: A lot of times first time home buyers tend to focus on the big things, and completely overlook the tiny things such as repairs needed, a distance of the home from a busy highway, location of power lines, etc.
- Cold Feet: While it is always a good idea to take your time in making a decision on your first home, many first time home buyers take too long, and risk having another offer put in on the home they liked and forcing them to start the entire process over again.
- Not having professional help: Some first time home buyers elect not to use the services of attorneys, brokers or licensed real estate agents to save money and it winds up costing them more money in the long run.
- Letting their emotions cloud their judgment: Sometimes they get so caught up in the excitement of buying their first home they don’t see some of the important things. (Like the leak in the basement, or the slight bulge in the foundation by the front door.)
- Look for their ideal house first and then think about getting the loan: This is a big mistake. You will want to be sure to get your loan preapproval first, before going out and looking at houses. You will need your preapproval before submitting any offers on a house, and it can take anywhere from a week to a month to get a preapproval done. In that time, someone else could potentially scoop the house out from under you. So, always have your preapproval done first.
- Waste time at looking at homes outside their budget: If a house is priced a certain way, then they are not likely to drop the price much. Houses can drop as much as $20k, but it should not be counted on, and those cases are extremely rare. So, avoid the frustration, and only look at houses that are a maximum of $5k more than your budget as you might be able to get them down that much.
- Let your agent do the talking: Some people get excited and run off at the mouth and say something that might raise the price of the home. Let your agent do the negotiating for you. If the seller sees your excitement and how much you want it, they might not be willing to budge on the price.