The first time you buy a home can be the most exciting and the most nerve-racking experience. In order to make the process a positive one, take this helpful advice for first-time buyers to heart.
It can help you avoid many of the mistakes that first-time homebuyers make and can ensure that you buy the house that is right for you. Here is the general roadmap for happy house hunting!
Before you even begin to start saving properties and calling agents, you have to get your finances in order. That begins with cleaning up old debts, improving your credit score, and building up a healthy savings to put down a 20% down payment if at all possible. Get this done first.
At the very least, most banks will require 5% down. Just know that lenders will typically require you to pay private mortgage insurance (PMI) if your down payment is less than 20%
Once you have your financial ducks in a row, it’s time to start preparing for the house hunt. The first step is actually going to a bank and getting pre-approved for a home loan.
Keep in mind that pre-approval and pre-qualification are two different things:
- Pre-Qualification: Only tells you how much you can afford for a home.
- Pre-Approval: Tells you how much the bank will guarantee to lend you for a home.
When you go to an open house with a pre-approval letter in hand, the seller knows that you are a serious buyer. Plus knowing exactly how much you are approved for can help you stay within your budget. When budgeting for your home purchase, don’t forget to include other costs that will arise like:
- Closing Costs
- And Other Fees
Know What You Are Looking For
Now comes the fun part for first-time homebuyers. Now you get to put together your wish list for the house that you really want. You will want to have two lists to work from. One list is your list of needs:
- Specific Number of Bedrooms
- Specific Number of Bathrooms
- Square Footage
- Location, Etc.
These are the things that you cannot budge on. These may include a lot of other things like specific school districts or distance from your place of employment. That is your primary list. Your second list is your wants; things that you would love to have but are not a deal-breaker if they are not included. Things like:
- Attic Bedroom
- Finished Basement
- Multi-Car Garage, Etc.
Get Help from a Pro
After you have completed these steps, it is at last time to call in a pro. You have everything you need to give your agent a good idea about what you are looking for. Now let your agent take you through the next exciting steps! Contact Agent now to discuss your goals for buying a home.
Make an Offer
Coming up with a purchase offer that the seller will want to say yes to is one of the trickier aspects of the home buying process. Agent will be a great help here since she knows the local market and will be able to provide you with the necessary comparative market analysis (CMA) and advise you on what price to offer.
Not every offer is going to be immediately accepted, especially if it’s for less than the asking price or if you’re proposing contingencies that the seller may not want to comply with. This is when having a good agent comes in handy. Agent will take care of negotiating the best terms for you and will make sure that your interests are protected.