First Time Home Buyers Guide
There are few things as exciting as purchasing your first home and beginning to build a life, whether you have chosen a bachelor pad in an up and coming area, a modern family home in a quiet suburb, or a period property that you want to restore to its former glory. Follow the first time home buyer tips below and you will be well on your way to living the dream.
While buying your first property is a hugely exciting step, it is risky by nature. While older more experienced buyers, who may have bought and sold a number of houses during their lifetime, will be able to spot a dud at 20 paces, those without this experience may find themselves blinded to the pitfalls of a home by the excitement of becoming a property owner.
It is also easy to fall in love with every home you can afford the first time you buy a property (or none because you are unable to determine the wants from the needs). If you are married and planning kids soon is that one bedroom condo on the 20th floor of a hip building in the trendy part of town really your best bet just because it suits your budget? Probably not.
Below are several first time home buyer tips to help you keep your head during the process, ensuring you come out the other side with the best deal, and the right home for your needs.
First Steps For New Home Buyers
It is common for first time buyers to want to jump right in and immediately begin looking for their dream home. This is a mistake. There are a few key things that need to be taken care of first that will make the process much more seamless and a lot less frustrating for all parties involved. These first steps include:
- Talk to a lender – You need to find out how much a lender is willing to loan you before you do anything else! By getting pre-approved you will not only know your price ceiling but have a realistic outlook of the houses you can afford when you begin your home search. In addition, getting pre-approved for a loan upfront tells agents and home sellers you are serious about purchasing a property.
- Choose your real estate agent – Picking an agent is easy, but choosing a real estate agent who will have your best interest in mind takes a little homework. Check with friends and family, ask co-workers, go online and check out referrals, and interview several agents before deciding on yours. Calling the agent on the sign is not your best approach as they work for the seller, not you. Hire an agent that works for you to ensure your purchasing needs are looked after.
After these two critical tasks are completed, you are ready to begin the process of looking for the right home to fit your lifestyle and personal needs.
What Should I Look For In A Home?
Buying a home is not like choosing a favorite brunch spot or boutique store to shop in. There are all kinds of things to consider, and research is the fouFind ndation to help you make the right choice.
You cannot go far wrong with a good old fashioned list. Write down what you 100% need from your home, followed by what you would really want but is not absolutely necessary, followed by those would be nice to have things. The list is different for each buyer but some of the items on yours may include:
- Certain number of bedrooms or bathrooms
- Overall square footage
- Open vs closed floor plan
- New home vs resale property
- Space for an office or bonus room
- One story or two
- Home vs condo/townhouse
- Garage, carport, or off-street parking
- Home style, type, or a specific builder
- Good school district
- Onsite or close-by amenities
- Proximity to (you fill in the blank)
Once you have these aspects in mind you will be able to whittle your list of potentials down even more, and the ranking system you have applied will help you to be realistic (i.e. you have fallen in love with the original fireplace in the living room of a home but it does not fulfill many other items on your need list…cross it off and move on!). If you have a solid plan in-place you will quickly be able to determine which properties are contenders and which are only pretenders.
Research Each Property
The old adage is that location, location, location is the most important thing when it comes to buying a property, and it is, but research, research, research is the cornerstone your foundation should be built on! The good news is there is a lot of quality real estate information at your fingertips (or keyboard).
Here are a few things you might want to know about properties you are interested in buying:
- How much the house last sold for
- Homeowners Association details (if applicable)
- Area development plans
- Easement rules
- Property boundaries
- Your millage rate (used to calculate property taxes)
- City/county responsibilities (i.e. garbage, utilities, etc.)
- State tax
- Property tax
Being well informed is not only smart, it is crucial to getting the best home for the best price in the best area possible. This is one of the many areas your local real estate agent will be invaluable in as they can help provide a lot of the data you need about both the home in question and the community as a whole. Utilize their expertise and gain the knowledge you need to make an informed decision.
Neighborhood Details To Know
There are also several things worth knowing about neighborhoods you may be interested in so it is smart to check out the area in more detail before deciding on one particular house. This list includes:
- Preview the community at different times of the day/night. Each visit will give you a better perspective on the noise level, congestion, and how quiet or busy the neighborhood is.
- If you have school age kids, visiting their prospective schools. You can also find out more details by visiting greatschools.org.
- The commute time to/from work, school, or other important amenities.
- Reviewing the state sex offender registry. If the area has a local sex offender site, make sure to check that too.
- Visit the local police station or check out SpotCrime.com to determine the crime level in your future neighborhood.
- Scan for distractions (i.e. is there a highway, public transportation service, entertainment venue, or processing plant nearby).
It is easy to find a home and neighborhood appealing if viewed on a sunny day. However, by doing your research for the homes on your short list, you will have a much more clear view of what you are possibly getting yourself into before moving forward with an offer.
Of course, in areas where there is a shortage of available homes, you may not be afforded much time to decide so keep that in mind if you really like a house and are considering making an offer on it. If you wait too long you may find the house is already contracted when you decide to make your move.
First Time Buyer Self Awareness
You have watched 200+ hours of home makeover shows and are considering buying a shack and turning it into a palace, making a healthy profit along the way. It might be a good idea to take a step back and think about the impact on your life before you take the plunge and consider buying a fixer-upper property.
If your usual weekend routine involves Friday nights out with friends/family, a lazy Saturday brunch followed by having friends over for dinner, and some outdoor activity or quiet time on Sunday, delving into the world of hammering, sawing, and painting may grind you down sooner than you think.
Many first timers fall into the trap of potentially saving money by buying a house to fix up. However, they come back down to earth with a bump when they quickly realize their expectations do not meet the reality of the time and cost involved in fixing up a home. After a hard week at the office are you really in the mood to fit a new tub, tear down walls, or put in insulation/drywall? If so, go for it, but for the rest of us a little reality check needs to be performed before biting off more home updates than we can chew!
It might be a good idea to look at fixing up a home as a sliding scale. If the house needs a new bathroom and kitchen (which are the two most common rooms buyers like to change) plus a few other small jobs, then you may be fine, especially if you plan to incrementally perform the updates. If you are thinking about a host of overhauls in a short period, it may be best to put that home on the back burner and continue searching.
Paying Attention To Property Details
A common pitfall people fall into when house hunting is focusing too much on the current owner’s furniture, decor, or other personal items. Unless you are buying a home as is, these aspects are irrelevant. That beautiful table and hutch that look great in the dining room will not be there when you move in, so try to think about how your own furniture and possessions will fit into the space.
When you view a house it is important to look past the surface and focus on the nuts and bolts of what you are buying. Is there condensation on the windows? This could imply the home is damp as could stains and patches on the ceiling. Are there cracks big enough to fit your credit card in? This could be sign of movement in the home’s foundations. Is one of the doors particularly hard to open or close or are some of the windows stuck in place? This could highlight problems with the settlement of the house.
While compiling your own list is important, it is even more critical to ensure you get a home inspection performed. Have a professional can come through and write-up anything that is broke, dangerous, or out of code. Any issues noted are negotiable so discuss your options with your agent!
Preview The Entire House
You might be surprised how many people decide to buy a house purely based on its interior, and then come moving day finally notice the unkempt backyard or other outdoor eyesores they previously overlooked. It is absolutely vital you take the time to have a leisurely stroll around the entire property, taking into account as many details as you can.
Things of interest include but are not limited to:
- Leaky gutters
- Cracks on outside walls
- A sloping yard that could imply ground subsidence
- Rotting woodwork or woodwork covered in holes that could be signs of a pest infestation
- Concrete breaks or gaps
- Fencing issues
- The roof to include missing pieces or patched area
- Outside air conditioning units
- Chimney (if applicable)
- Diseased vegetation or grass
- Potential drainage issues
If you decide to buy the home, your home inspector should find most of these concerns, but there is no guarantee they will catch everything so give them your list before they get started.
Home Buying 101 – Parting Shots
Buying a home always means a move has to take place so ensure you tackle the packing and moving details as quickly as you can so you can focus on more pressing concerns, like negotiations and getting through closing quickly and easily. It is also smart to order any storage boxes you may need early in the process in case your offer is accepted quickly and you suddenly find yourself short on time.
It is always better to be prepared by taking care of details early on so the majority of your time can be spent finding the ideal house for you and your family. Follow these first time home buyer tips, have fun with your house hunting experience, and before you know it you will be enjoying the fruits of your labor (owning your own home).
Additional Tips for First Time Buyers
Home Buying Advice via Investopedia
Tips for New Buyers by Inlanta Mortgage – Madison
Mortgage Industry Study via Supermoney