The First Steps to Buying Your First Property

Congratulations if you’re setting yourself up to buy your first real estate! There’s no better way to use your money than to invest in bricks and mortar, whether using the residence as your primary home or renting it out as an investment.

However, as you embark on an entirely new path, you may feel overwhelmed by the process and procedures involved in buying your first home.

From initial searches to signing on the dotted line, you must make many high-stakes decisions and learn countless lessons. Here are the first steps you’ll need to take.

Realistic Expectations

Going into the property market, chances are you’ll have lofty ideals as to what sort of property you’ll be able to find. While it’s good to dream, it also pays to be realistic and understand how far your money will go in the area you want to buy in.

Before you start looking, work out your non-negotiable list of what you need in a property. Also, make a list of your ‘nice to haves’ and ensure you and your partner understand the difference between the two lists.

While feeling emotionally drawn to a property is essential, consider properties you can renovate to get that emotional pull. When considering do-ups, you’ll need funds to carry out the renovation—make sure you understand how much you’d need.

Your Budget 

Of course, before you make any moves, you should consider how much money you have to spend on your first home. There are always hidden costs associated with buying a house that is often not mentioned, or you’re informed of them too late in the buying process.

Hidden costs

Do you know the taxes and insurance required when you buy a home?

You may need to pay stamp duty in your location, and if you need a mortgage that is more than 80% of the property price, there is also mortgage insurance. Plus, your home needs to be insured, and there will be contents insurance, too. For taxes, there will be local government rate payments.

Loans

Loan costs include the interest rate, which changes over time, so you need to be prepared for an increase in interest payments.

There can be application fees, and you’ll want a professional to assess the loan documents and advise you on which loan best suits your financial situation.

Professional fees can be from your lawyer, the conveyancing process, and your accountant or financial advisor.

Getting a home inspection report will be an additional cost, so budget for it. Additionally, if the property inspection shows urgent repairs or maintenance required but is not a show-stopper and you continue with the purchase, you will need funds to pay for them.

Therefore, be aware of all potential hidden costs that are not always discussed during the home buying process and ideally have a fund of around 1-10% of the property value on hand.

If you’re a cash buyer and therefore don’t need a home loan, your budget does not need to include the hidden costs associated with the loan application.

Focusing Your Search

Hopefully, you’ll find many properties with your desired qualities and at your achievable price for sale in your city or state. That’s why, where you can, you should focus your search on a finite area to help you manage the number of choices available.

Is it essential for you to live somewhere with good transport links?

Do you have, or plan to have, children who will need to be close to a local school?

Would having bars and restaurants only a walking distance away fit nicely into your current lifestyle?

Asking yourself these sorts of questions will help you determine what type of property and where it’s located suits you now and in the future.

Find a realtor who listens.

As your essential partner in your real estate search, you’ll want to find a realtor who understands what is important to you and respects your wants and needs. Don’t be afraid to try a few different realtors before deciding which one to go the distance with.

A good realtor, also known as a real estate agent, will have you in mind when a new property comes into their portfolio and fight tooth and nail to get you the purchase you desire.

Play the long game

House hunting can be exhausting, especially if you’ve never done it. You may feel disheartened or like you’ll never find the one you seek. Yet, remember, buying property is a considerable investment and shouldn’t be taken lightly, so have patience and stay level-headed.

Remember, also, that the “perfect house” doesn’t exist. Too many first-time home buyers give up on properties because they are not perfect.  Choose the home that meets most must-have requirements and use your extra budget to modify rooms to meet your needs.  For example, replace the kitchen or bathroom.

Avoid Attending Home Viewings Solo

You can try to avoid visiting real estate viewings alone; with any luck, your realtor will be available to attend all viewings with you, but if they can’t, ask a friend or family member to accompany you.

The more homes you view, the harder it will be to decipher the differences and feel excited about the property’s potential. Having a second pair of eyes will provide valuable feedback and further opinions on which to base your decisions.

If you need to attend some properties solo, consider taking notes at the end of the viewing appointment so you can remember each property’s details. What did you like about it? What didn’t work for you? Did you feel the price was appropriate, too high, or too low?

Ask locals  

Most property viewings last around fifteen to twenty minutes, or perhaps thirty minutes at a maximum. Of course, this isn’t enough time to get a feel of the local area, so don’t be afraid to ask the neighbors or other people you see on your way down the street what they think about the neighborhood.

Does it feel safe? How long have they lived there? Would they recommend the area to their friends? Don’t forget that you’re buying a little slice of life there, so you want to ensure you’re not in for nasty surprises.

Final Thoughts

The home-buying process can be emotionally draining, as there are many challenges, including negotiating the purchase price and waiting for loan approval. The key to keeping yourself calm and relaxed is to lean on people you know who are experienced with buying homes. Ask questions and let them know how you feel, so a problem shared is a problem halved.