Mortgages, home tours, real estate agents, down payments, and home inspections are just some of the things you will encounter during the home buying process. It can be overwhelming for the first-time home buyer. This article outlines the steps to buying your first home.
1. When Buying Your First Home Hire an Agent
When buying your first home, you need a real estate professional on your side. A good buyer’s agent represents your interests during the transaction. A real estate agent will help you shop for property, warn you of common home-buying mistakes, determine a fair offer, and assist with paperwork at closing. Hire an agent who you trust.
2. Know Your Needs and Your Wants
When buying your first home, know the difference between your needs and your wants. What features are so important that they must be in the new home? What features would be nice to have, but are not a deal breaker if they are missing? Create a list to help you and your agent narrow down the search.
3. Get Your Finances In Order First
When you find your dream house, you will want to move as quickly as possible. Before buying your first home, get your financial accounts in order.
- Get pre-approved for a mortgage.
- Make sure you have funds available for the mortgage down payment and earnest money for when you make an offer.
- Reduce debt as much as possible to make it easier to secure a loan.
4. Find a Payment You Are Comfortable With
Part of buying your first home is deciding what you can afford as a monthly payment. Banks look at your debt load, income, and payment history when they determine how much they will lend.
What they don’t consider are non-debt expenses. For example, if you have young children, you may pay for daycare. You are under no obligation to take the biggest mortgage loan offered. You should only take on a mortgage payment you feel comfortable with.
5. Make an Honest Offer When Buying Your First Home
Instead of low-balling an offer, the better option is to talk to your buyer’s agent about what the property is worth and make an offer based on that information. Even if the seller doesn’t accept it, you will likely get a counteroffer and can continue the negotiations.
6. Don’t Get Attached to One Property
Keep your emotions out of any real estate deal. You don’t want to pay more than the house is worth or commit to a property you simply cannot afford because you feel attached to it. If this home isn’t right, keep looking; new houses are listed every day.
7. When Buying a Home, Get a Home Inspection
Know if your house has any major problems before you finalize the deal. Choose a qualified home inspector to do an assessment of the property. The inspector will give you a detailed report outlining any problems and strengths. This gives you negotiating power to revise your original offer if needed.