Tips for First Time Buyers Starting a Home Search.
So you’re thinking about buying a home?
Maybe you’re tired of paying rent that you’ll never get back. Maybe you’re tired of your landlord giving you the run around when there’s a maintenance issue. Or maybe you’re just ready to invest in property of your own. No matter what your reason for beginning a home search, you have to start somewhere.
Here are a few things to think about when you’re ready to take the plunge into homeownership.
Get Pre-Approved
It is important to know your credit score and what you can qualify for before you shop. Work with a reputable lender who will run all your numbers and determine a price range that you can afford. Keep in mind that many people are pre-approved for more than they want to pay each month – be sure you speak to your lender about what you’d like your monthly mortgage payments to be.
Keep in mind that your monthly payments won’t stop at just your mortgage. Consider the other expenses that come with buying a home, such as property taxes, homeowners association dues, and mortgage insurance (if your down payment is under 20%). Be sure you know your total monthly housing budget and convey this to your lender so you can be sure you don’t end up with more house than you can actually afford.
Create a REALISTIC Wish List
Of course, everyone dreams of that move-in ready gem that looks straight out of HGTV, but first time home buyers often need to reign in their expectations in order to find a home that will be comfortable and affordable. Think about the space, location, and amenities that are absolute must-haves, and then work from there. Consider making both an “A” and a “B” wish list; the A-list will include items that you absolutely can’t compromise on, while the B list will have those items that you’d really like to have.
Think about what aspects of a home you will absolutely need from the day you move in, versus what you can change later. Maybe you’d love to have a rec room or a man cave but can opt for an unfinished basement that can be finished off later down the road. Perhaps you dream of granite countertops, but could actually stand to live with existing lower-end countertops for a year or two while you save up for granite. Balancing wants and needs is one of the most important steps in buying a first home.
Consider the WORST House in the BEST Neighborhood
We’ve all heard that famous phrase: location, location, LOCATION! Consider why you love a certain location and what it would mean for your lifestyle to live there. Maybe it’s in a great school system. Perhaps it’s within walking distance to great stores and restaurants. Maybe you simply find the neighborhood charming. Decide what you love about the neighborhood and weigh the trade-offs you’d have to make to purchase a home in your favorite location.
Keep in mind that to afford a home in a desirable location, you may have to go for a diamond in the rough. While it may seem like a huge compromise, you’ll actually be in a position to gain appreciation on your home’s value – just as long as you’re willing to put in a little elbow grease. After some sweat equity, you’ll have both a beautiful home AND a great neighborhood. Now that’s a win-win.
Working with a buyer’s agent who can discuss the trade-offs and help you determine costs to do some of the work is essential.
Simply going to open houses and calling the agents representing listings on the market is not going to give you everything you need to make an informed decision. A buyer’s agent is also going to help you have realistic expectations on whether there is any negotiating room on a property and whether the property is priced reasonably for its condition and location.
If I can be of service as your buyer’s agent, please contact me.
