The challenge of buying your first home can seem so hard and daunting. To help you demystify the process, we bring you home buying tips and tricks to consider before you buy. What can you expect from the buying process itself?
The home buying process can be filled with steps you never knew. Especially for first-time home buyers who aren’t familiar with the process. Here are some handy tips for first-time homeowners that make life easier after you purchase your first home.
The National Association of Realtors reported in 2016 that 34% of all home buyers were first-time home buyers. That’s the highest percentage share reported in four years.
Who Are First-Time Home Buyers?
Many first time home buyers are age 34 and younger. A first-time home buyer is defined as a buyer who has not bought a home over the past 3 years.
Considerations Before You Buy
The first thing you’ll need to determine is what your long-term goals are and then how home ownership fits in with those plans. It could be that you’re simply looking to transform all those “wasted” rent payments into mortgage payments. Or you see home ownership as a sign of yours independence and enjoy the idea of being your own landlord. Think what type of home best suits your needs, how much mortgage do you qualify for, and who will help you find a home and g Considerations when searching for your first home. Get to know all important pieces of information about real estate.
There are a number of factors to consider when deciding where to search for a home, and not all of them have to do with the price:
Transport: The quality of public transport can be a major factor in making your decision to buy in a certain area.
Shops: Living in close proximity to a shopping center can make a major difference in the convenience of your day-to-day activities.
Schools: As your children grow and move from kindergarten into primary school and then from high school into university you will need to be reasonably close to such facilities.
Work: We all have to go to work, and if you can’t live nearby your workplace you should ascertain that the available transport system will get you there.
Future expansion: As your family grows your first house may well prove to be too small for the changing circumstances, so look into the future and satisfy yourself that you can expand if need be.
Home buying tips for first time buyers:
Hire an Agent
An agent will save you time and money. Process can be so much easier with real estate agent who knows what to do.
- An agent can send you listings directly that fit your parameters
- Agents often know of new home real estate listings coming up that are not yet on the market.
- Some agents will preview homes for you.
- You can waste the agent’s gas and not your own when you tour homes.
Find a Home to Buy
Buying a home can be an overwhelming process and emotionally draining. Finding the right home is not always an easy task. According to the National Association of REALTORS, buyers spend an average of 6 to 8 weeks trying to figure out where they want to live.
Get a Loan
It’s not always necessary to have a mortgage broker or bank in your back pocket before buying a home. But, it’s smarter to get loan pre-approval in advance. This way you know for certain how much home to buy. Many sellers won’t look at an offer if the seller doesn’t have the assurance that the buyer can get a loan.
Plan your budget.
There is nothing more important when buying your first home than planning a workable budget and sticking to it. Sticking to a budget you’ll get a clear picture of the home loan you can afford.
Negotiate the Offer
Buyers sometimes make the mistake of comparing the sales price of a home to other homes they have seen. It’s a mistake to compare sales prices among homes for sale. That’s because sellers can ask any price they want. It doesn’t mean the home will sell at that price.
You may need to pay over list price in a seller’s market, especially if many buyers are vying for the same inventory. Your agent can give you a reasonable price range and help to manage your expectations. A good buyer’s agent knows there is always more to an offer than its price, but price is paramount.
Do a Home Inspection
In some states, a home inspection is conducted before buyers make a purchase offer. In other states, a home inspection is a contract contingency. A contract contingency means a buyer has the right to cancel the contract. You might not want to be locked in to buying a home that has a faulty foundation, for example.
Sellers are generally not required to make repairs if problems are discovered during a home inspection.
Close or move on.
If you’re able to work out a deal with the seller, or if the inspection didn’t reveal any significant problems, you should be ready to close. Closing basically involves signing a ton of paperwork in a very short time period, while praying that nothing falls through at the last minute.
After buying your first home
When you signed the papers and paid the movers your new place is starting to feel like home.
- Keep saving money for unexpected expenses – like replacing the roof or getting a new water heater.
- Perform regular maintenance – you’ll want to make sure to take excellent care of your new home
- Be able to choose when you sell your home, rather than being forced to sell it due to job relocation or financial distress
- If you want to look at your home as a source of wealth in retirement, consider that once you’ve paid off your mortgage, the money that you were spending on monthly payments can be used to fund some of your living and medical expenses in retirement.
Remember that the more you educate yourself about the process beforehand, the less stressful it will be. So, you will get the house you want for a price you can afford – and with a smile on your face.