Hey, we know the first time you buy a home can be tough, but that doesn’t mean it has to be painful. Here is some info that every first-time home buyer should have to come out of the experience with flying colors.
First Time Home Buyer 101
Before you get the keys to your new home, patience is the key. This is going to be a long process. Poring over listings and attending showings is only half the battle if that. Although the general timeline for finding a home is thirty to ninety days, extenuating circumstances can stretch that out quite a bit. Going into the process with this knowledge will make it a little more bearable.
Step 1: Finding A House
When you’re looking for a house, you’re looking for the one, the dream house, the house that you’re going to be living in for a good deal of the rest of your life, you want it to be perfect, but if you blow your budget, you may not end up living in that house for very long at all. Be prepared to be flexible, you can always make improvements after you get on a more financially secure footing.
Make a list of the must-haves. Is the hardwood floor worth the hours of work you’ll have to put in to pay for it? If not, you may want to reconsider your choices.
Location is also a big consideration. Curb appeal is important, but the curb that the house is on is more important. Remember, where you live will factor into the amount of taxes you pay and where your kids go to school. Make a few rounds of the neighborhood before you settle on your final choice.
The Real Estate Agent
Meet the real estate agent. This is the person who is going to hold your hand through the whole process. He or she can help you with everything from finding your house to getting you approved for a loan, handling paperwork, and giving you advice about negotiating with the seller. This person can be your knight in shining armor.
Your real estate agent has likely been around the block a few times, in more ways than one. They have the inside skinny on the neighborhood and can dig up some facts about demographics, education, and comparable sales that will give you some extra ammunition when you go to make your purchase. Remember, they have a vested interest in this as well.
The Mortgage Lender
The mortgage lender can strike fear in the hearts of many first-time home buyers. He’s the one who evaluates your credit and debt and decides whether or not you are a good risk for a loan and what kind of loan you qualify for. He looks at your tax returns for income and loss, reviews bank statements. You might compare your experience with the mortgage lender to getting audited by the FBI. Not fun.
Of course, if your credit is good, and your income is stable, and you have nothing to hide, you should have nothing to worry about. In fact, if you find the right mortgage broker, he may even problem-solve and help to address your budgetary needs. Beware of the mortgage lender who tries to push you into a higher loan amount.
Best advice: take along your real estate agent when dealing with the mortgage lender. Your agent wants to work with a reliable, professional lender as much as you do and can recommend lenders who have worked well in past transactions.
The home inspector is a relatively neutral character. His job is to inspect the home before the purchase. His views are largely objective. Home inspectors focus on the house’s construction, structure, and mechanics. If he finds something that needs improvement, he’ll recommend repairs it in a written report.
Typically, the home inspection is performed at the buyer’s expense, however, it is not intended to make sure the homeowner is getting a good value for his money. Rather, the inspection is crucial to the sale of the home. If major problems costing a considerable amount are found, it may result in the buyer voiding the contract.
Things Every First Time Home Buyer Wishes He or She Knew Before Buying
There are certain things every homeowner wishes they knew before buying a home. We want you to have the best home buying experience possible, so we’re telling you now. Here are some of the unexpected things you can expect when buying a home.
- Shop around for a mortgage lender. Don’t just go with the first lender that approves you for a loan. Different lenders have different rates. You’d be surprised by the amount of money you can save by going with a lender whose list price is 0.5 to 1% below everyone else’s.
- Be prepared for your home inspector to find problems. A home inspector’s job is to find problems, so when he finds them, he’s just doing his job. He may find a lot of structural and safety issues that make the home of your dreams seem like a little more of a nightmare, but it may be worth the sacrifice.
- Budget for transitional costs. Be aware, you may find the right home before the time the lease on your current place ends. Kudos for finding a home, but now you have a rent and a mortgage to pay. It’s smart to plan ahead and anticipate additional costs so you don’t find yourself in the red after you’ve made your big. See our blog on breaking a lease for more details.
- Look at the house itself, not what’s in it. Sure, we all get turned off by dirty countertops and stuff left in cabinets, but dust can be removed and cabinets can be cleaned. Look at the big picture. Don’t let the small stuff get in the way of buying a dream home.
- Don’t be afraid to ask questions. Your mom and dad always told you not to be afraid to ask questions when you were a little kid. Now is the time to listen. The best realtors want first time home buyers to be equipped and informed, so it is more likely they will appreciate your questions than be bothered by them.