5 Tips for First Time Homebuyers
Very few things in life are as exciting and stressful as buying your first home. Here are five tips that might help you on your journey to home ownership.
1) Start your search early
Talk to any home owner and they’ll probably tell you that buying a home is a bit of a process. And in all likelihood it will take a serious time commitment on your part.
So you’ll want to give yourself plenty of lead time and figure out what you’re looking for well in advance of when you intend to buy. Get to know your particular market, browse online, see what’s listed and pay attention to how much homes are actually selling for in your area. The better you know a particular market, the easier it will be to make the decision to buy when the time comes.
You’ll also want to visit open houses in person to really get a feel for what’s out there. It’s hard to get a true sense of what a home is really like from online searching only.
2) Consider ALL of your future expenses
As you figure out how much home you can afford, you obviously need to consider the upfront price of purchasing the home. But you’ll also want to think about all of the future costs associated with owning that particular home. And you’ll want to see how those costs line up with your current budget.
Your mortgage payments will almost certainly represent the largest share. But you’ll also need to factor in some other things like home insurance, property taxes, repairs and maintenance, and potential HOA or management fees if you buy a condo. These expenses will add up and you definitely don’t want to leave them out of the equation.
We also have a home buying calculator to help estimate your costs.
3) Get pre-approved for a mortgage
Buying a home is obviously expensive, and chances are you’ll need to take out a mortgage to cover a significant portion of the cost. So it’s generally a good idea to speak to a mortgage provider and get a pre-approval letter. Ideally you should reach out to multiple providers and see who can offer you the most attractive terms.
The pre-approval letter basically says the lender is willing to lend you a certain amount of money based on your financial situation. Not only will this give you credibility in the eyes of the seller, it will also give you a sense for how much you’ll be able to realistically borrow when the time comes.
4) Find an agent you trust
When you’re shopping for a home, it’s a good idea to work with a real estate agent, or buyer’s agent. Note, this is not the same as the listing agent, who is working on behalf of the seller. Your agent is there to represent your interests – helping you search for a home, negotiate the price, and walk you through the various steps of the process.
The agent commission will technically be paid by the seller, but it’s usually baked into the sale price of the home. So in reality, you’re contributing towards the fee as well. You might as well get something for it. Typically the commission will be split between the buyer’s agent and the listing agent.
5) Try to stay calm and stick with your plan!
Finding your dream home, or even a reasonably good home, is a lot of work. And in today’s real estate market, buyers are competing for limited inventory, making the process feel especially stressful. But try to stay calm and stick to your plan. You don’t want to let your emotions hijack your well thought out strategy. Eventually you’ll find a home you love.
Looking for more?
