Advice For First-Time Buyers
So, the time has come for you to purchase your first home – well done! Here is some handy advice for those entering the property market for the first time in the hope of finding their perfect new home.
Are You Ready?
It may seem silly, but many people are not as ready as they think they are to purchase a home.
You need to be fully committed emotionally and also ensure that you have enough money. Take a careful look at your current situation to decide if this is the right decision and if you have enough money for the various costs involved to decide if the time is right.
Next, you will want to establish a budget. You need to determine what is within your price range and this can be done with a home affordability calculator which can be found online. Keep in mind that you will need to pay around 20% for a down payment.
Many will accept a smaller percentage, but keep in mind that you may have higher costs and pay for private mortgage insurance if you pay less.
Assemble A Team
Buying a house is a complex process, so you will need a team behind you to handle various aspects of the purchase and get it over the line. You can find the best people for the job by searching for real estate lawyers in the area you are moving to – real estate lawyers in Houston, for example. This will alleviate a lot of the stress involved and make sure that everything goes smoothly.
If you are taking out a mortgage loan, be sure to check your credit, as this is one of the major deciding factors for getting improved. Consider taking steps to improve your credit score and pause any new credit activity for the time being.
If you struggle to come up with the funds for a down payment, many programs can help first-time buyers, including federal, state and local assistance programs. These can help with tax credits, interest-free loans, low down payment loans, etc.
A pre-approval letter is handy to have as this is from the lender confirming how much in writing they are willing to lend you and on what terms. Having this can give you an advantage in negotiation and allows you to get on with the process quickly.
Establish Home Needs
Before you start looking, take the time to draw up what your exact needs are for your new home. For example, consider the number of bedrooms, whether or not you need a garden, proximity to work, parking, local schools, etc. It is easy to get caught up when you start looking, making sure that you know what you need before the hunt begins.
When viewing homes, try to focus on the right aspects and see the big picture. Ignore anything easy to change, like the decor, carpets and wall colors and instead, look at the size of the rooms, the condition of the property and whether or not you can see yourself settling down.
Obtain a floor plan for the property so that you can get a good overview and plan how each room could be used. It is important to be willing to compromise as it is rare that you will find somewhere that ticks all of the boxes within your needs, but obviously, make sure that you are not giving up too much.
Talk to Neighbors & Visit At Different Times
If you think you have found somewhere, take the time to speak to the neighbors about living in the local area as they will be able to provide handy insider knowledge (it is always helpful to know the neighbors, too!). Additionally, visit during different times of the day to see what it is like on a Saturday night or during rush hour.
Set Aside Money
Unfortunately, it is not just the down payment that you will need to pay. There are various fees, closing costs and then the actual cost of making a move to consider. Keep this in mind and make sure that you have enough for all of this (and continue living comfortably once you move in).
Making An Offer
If you are happy with the property and have your finances in place, it is time to make an offer.
Your real estate lawyer will be able to help with the sales transaction, but remember that negotiating the sales price is likely so know your upper limit and stick to it. Learn how to negotiate or get expert help to do the negotiations on your behalf.
Be friendly yet firm, and do not feel forced into spending more than you can afford. There are also a few ways that you can tip the balance in your favor if you find yourself in a bidding war, such as writing a letter to the owner outlining why you want to buy the house.
Insurance & Inspection
When the offer is accepted, you will be overwhelmed with excitement, but you are not quite there yet! First, you will need to obtain homeowners insurance and get an inspection carried out to assess the property’s condition both inside and out.
These are the main steps that you need to take when buying a house for the first time. It can be intimidating for a first-time buyer to navigate the market, especially as it is such a huge, life-changing decision.
Still, the above should help you enter the market with confidence and find the right home for your particular needs. Once you have the right people behind you and your finances in order, it can be relatively straightforward, and hopefully, it will be a simple process.