Top First Time Home Buyer Tips
First time home buyer tips are something everyone who is going to purchase real estate for the first time should seek out and use to their advantage. Buying your first home is a big deal! If you are like most it will be the biggest purchase you have ever made. This naturally leads to a mix of emotions including excitement, anticipation and anxiety. While it may be impossible to eliminate the stress that comes from your first home purchase, you can certainly minimize it by going into the situation prepared.
Do your research and follow reliable information as it applies to you, so your first home buying experience is a good one. Let these tips for buying a first home be your guide to a stress free real estate transaction!
Our first home buying tip is not to rely on family to know everything about purchasing real estate!
When you set out to buy your first home you are more than likely going to get advice from a number of people including family and friends. Many of them have been there and done it already so you can expect they would want to lend a helping hand. 1st time home buyer tips will be plentiful from lots of sources! Do keep in mind though that some of the people giving you advice have only purchased a home one or two times in their lives. This does not make them real estate experts.
When it comes to the hard decisions always rely on the Pros who will be involved in the transaction including your mortgage broker, attorney, real estate and insurance agent. While family and friends have great intentions, there are times where I have seen some of the worst advice you can image given to first time home buyers.
Get Specific about What You Want
Make sure you have a general idea about the type of property you would like to buy. You could be in the market for a million dollar home or a simple condominium purchase. Regardless of what you can afford, it is worthwhile to really think about what you want. How your purchasing power compares to others is not really important. This is still your biggest expenditure thus far and it is important to get what you want out of it.
Decide on basics like neighborhood, size, number of bedrooms and bathrooms. It is perfectly fine to be more detailed than this, though. You can consider what you really care about – a garage for working on your car, a play room for children, a basement for your wine collection. Personal choices are important.
Prioritizing what you want makes it easier to recognize it when you find it. It is unlikely you will get everything you dream of but you will happier with your purchase if it fits your wants and needs. When meeting with a Real Estate agent for the first time they will most certainly be asking you what your top considerations are in finding a home. Giving the agent an accurate picture of what you hope to achieve makes the process of finding a home for you much easier.
Get Pre-Approved For a Loan
Another very important first time home buyer tip is to get your financial house in order! You can’t really start shopping until you know how much money you have to spend. Your idea of what you will qualify for may be accurate, but it may not be. Find out what your maximum loan amount will be and consider how you want to use that money. One of the first things you should do when setting out to buy your first home is to get pre-approved for a mortgage! Keep in mind that there is a distinct difference between getting pre-approved vs getting pre-qualified over the phone.
While a pre-qualification letter may help you understand how much you can afford to pay each month towards a mortgage payment, it does very little to solidify your position as a legitimate home buyer. When the time comes for you to submit an offer on a specific property the owner and the sellers Realtor are more than likely going to want you to be pre-approved!
A savvy Realtor or seller is not going to accept a pre-qualification letter as it isn’t worth the paper it’s written on. The only way a seller is going to have some reasonable assurances you will get the loan is by providing them with a pre-approval letter. Providing the seller security, especially if you are competing with other buyers is one of the best tips for buying your first home.
Getting pre-approved is also for your own piece of mind as well. You may be able to only afford $200,000 when you really wanted $300,000. You may also qualify for $500,000 – but can you afford to keep a half-million dollar home in good repair? While getting a mortgage is a big part of buying your first home, keep in mind that it is only part of the home buying expenditures. Taxes, insurance, buying furniture and other household goods can add up quickly.
Find out how much you have to spend and then decide how much home you can really afford keeping all these other expenses in mind.
Look Thoroughly For Potential Homes
It is important to make sure you do some home buying research before making a purchase. Your agent will be able to help significantly with finding the perfect first home. However, it is still worthwhile for you to do your own searching using as many avenues as you can think of – including driving around favorite neighborhoods in search of for-sale signs, searching online listings and putting the word out to family, friends and co-workers. You never know where the perfect home will come from.
There are many buyers who enjoy going out and looking at Real Estate open houses before actually committing to an agent. This allows you to freely peruse homes at your leisure typically on a Sunday. When you are really ready though seek out a great real estate agent to work with you!
Get a Good Real Estate Agent
One of the best first time home buyer tips I can give you is to hire an outstanding Real Estate agent! You do not have to go through the home buying process alone. In fact, you probably shouldn’t. There are numerous reasons to hire an exceptional Realtor, including gaining access to the best available homes, having someone working regularly to find the house you really want and having an agent on your side in negotiations.
Having a professional in your corner is always beneficial, whether it is a mechanic fixing your car or a real estate agent helping you buy your home. But, as with a mechanic, not all real estate agents are created equal. Some are far more motivated and skilled than others, so you need to screen agents before choosing yours.
This means interviewing several Realtors, getting current references and taking a hard look at their histories. You want an agent that has a history of successfully helping people in situations similar to yours. Hiring a Real Estate agent is important. You want someone on your team who will be fighting for you every step of the way. Finding an agent who gives you an out of this world Real Estate experience will be hard if you go at it unprepared.
Make the Right Offer
Make sure you understand local home values! Negotiation is a fine art, not something learned in a day. This is part of why you search for agents that set reasonable goals for their clients and tend to obtain those goals. You want someone who understands what a home is worth and can argue the value points reliably. There may be any number of things that can give you an edge in negotiations, from pet damage to kitchen appliances. The problem is knowing just how much those things should affect the value of the home.
A top notch buyer’s agent is going to be looking out for your interests. The best of the best will try to make sure you are paying fair market value or below for the home you are interested in. If you feel you are working with an agent who is concerned about their own pocket book and not yours, dump them fast.
This is not the type of agent you want in your corner when it comes time to negotiate. I tell people all the time the best real estate agents are not worrying about where their next sale is coming from. An agent who needs a sale is going to give you different advice than one that doesn’t. Keep that in mind! As a first time home buyer it is important to realize that not all real estate agents are created equally.
Listen to the Home Inspector
Another important first time home buyer tip is to find a top notch home inspector! If the seller accepts your offer the next step is a thorough home inspection. A home inspector will look over the entire property and determine if there are any common home inspection issues, as well as anything out of the ordinary you should be aware of. In some circumstances depending on the loan product you use, it is possible you may be required to have a few more inspections done besides the general inspection. For example VA loans require a termite inspection.
You should listen closely to what the inspector has to say about the home even if you are madly in love with it. Serious home issues can quickly ruin any enjoyment you would get out of your new purchase and could turn your dream home into a nightmare. Almost every home even if it is new is going to have some issues. It is extremely rare to ever find the “perfect” house. The home inspector’s job is to find these issues for you.
One thing to remember is that like any other profession there are some really good inspectors and some that are not so great. Much like Real Estate agents, home inspectors have two roles – do their job of discovering defects and then communicating the problems found to you. Don’t under estimate the communications skills! Over the years I have encountered some fabulous home inspectors who clearly are very thorough and find 99% of what they should be discovering about the home. There are some however, that are very poor communicators.
Sharing information about a home to a first time home buyer is different than sharing information with someone who has bought multiple homes. Frankly, a first time buyer should be treated with kid gloves. Many home inspectors have great intentions but don’t realize that everything they say is treated like it’s the gospel. How information is presented to a first time buyer is critical. I have seen on numerous occasions where the delivery of discovered issues has made the buyer feel uncomfortable enough to want to back out of the sale! I am not talking about large issues but things that are common in many homes.
Some inspectors don’t care – in fact there is a small minority of them that don’t mind if you back out of a sale because they want you to call them back for your next inspection. While this is not a common practice because the majority of inspectors are true professionals, it is something to keep in the back of your mind. Your real estate agent will more than likely point out whether the inspector has gone overboard and the home owner more than likely will as well.
If there are problems but they are not complete deal breakers your agent will let you know the next best step. You should be able to renegotiate the price if the inspection shows you will need to make major repairs later on.
Be a Responsible First Time Homeowner
The last tip I will leave with you is to take responsibility for your purchase. Once you have closed on the house and moved in it may feel like all your work is done. It is important to remember though that you are just getting started in home ownership. Where before your landlord covered repair expenses, now those expenses are yours to bear. This can be quite a shock if you are not prepared for it.
Start saving for home maintenance immediately. Your home should last several lifetimes if properly cared for. If maintenance is ignored, though, you could find yourself losing out on your investment and your living quarters. Take care of maintenance and always keep a back fund for emergency repairs and you should be able to enjoy your home for many years to come.
Make sure to keep your home insured for an amount that will cover your loses in the event of a tragic event such as a fire. By following this first time home buyer advice you will increase your chances dramatically of have a smooth and pleasant Real Estate transaction. Best of luck!
More Tips and Resources for First Time Home Buyers:
Buying a Home by US Department of Urban Housing
Use these additional helpful resources to make a sound decisions when buying a home for your first time!