What To Know When Buying a House for the First Time
Buying a house, especially for the first time, can be a little overwhelming. There are so many things to learn and lots of decisions to make … and that’s why you need to work with a real estate agent that will educate, coach, and guide you through each step of the process. Check out these things you need to know when buying a house for the first time and then reach out if I can answer any other questions for you or if you’d like me to send you my free home buyer’s guide! {To get the viewpoint of first time home buyers, scroll to the bottom of this post for an interview with a youngle couple.}
Real estate has a lot of words and concepts that are a bit foreign if you haven’t previously bought or sold a house … and they’re easy to forget even if you’ve purchased a home in the past. Your real estate agent will guide you through each step, explaining terms and concepts, and coaching you through the process, from the first discussion until it’s time to celebrate at the closing table.
What Every First Time Home Buyer Needs to Know
Get a basic idea of what you’re looking for.
The home search can continue to be narrowed down as you start looking but you’ll find it much easier if you start out with an idea of what you’re looking for, areas and neighborhoods you like, the size of house you might want, and other items that are on your wants or needs lists. It often helps to prioritize, keeping a list of the things that are necessities {like a certain number of bedrooms} and a list of things that might not be mandatory but are desired {like a mudroom or a pool}.
Find the right real estate agent.
Choosing the right real estate agent is critical to a smooth home buying process. You want someone who will answer every question you have, communicate openly and easily, troubleshoot any problems that arise, work well with the seller’s agent, and negotiate on your behalf, not just with the sales price but with repair negotations and other terms, as well. An agent isn’t just there to help you find the right house or open doors but to advocate for you, as a buyer, and ensure that you’re getting the best deal and the best terms.
Check your credit report.
Take a look at your credit report {you should do this yearly} and make sure there aren’t any errors. You don’t want a mistake affecting the amount you can get preapproved for.
Get preapproval from a lender.
This will help you determine what you’re able to spend on a house although you probably already have some idea of the price range you’re interested in. A lender can give you information about current interest rates and loan options. You’re welcome to use any lender you want but I’m also happy to recommend lenders to my clients. Regardless of the lender you choose, be sure it’s someone that is easily accessible and willing to answer any questions you might have.
Decide on a budget.
Decide on a budget and then stick to it. There are a lot of costs involved with a house, from property taxes to home insurance to maintenance. An online mortgage calculator can help you assess the monthly amount you’ll end up paying with different mortgage amounts.
Once you start looking at houses, it’s easy to get caught up in bigger houses and better features. Know your budget beforehand and only look at houses that fit that budget.
Prepare the funds you’ll need.
When buying a house, most people know you’ll need money for a down payment {it doesn’t have to be 20% although that will save you from paying primary mortgage insurance}. What some people don’t realize is that you’ll need to pay some money immediately after an offer is accepted on a house. Earnest money and option money will both be due in the first few days along with money for an inspection during the option period. Knowing these costs in advance will help you budget for the home buying process.
Tour homes.
While you might find the perfect house on the first day of your search, it’s more likely that you won’t. Touring a few homes will help you narrow down what you’re really looking for. However, touring hundreds of homes will actually confuse you more. Use home tours to help define your needs and wants and only tour homes that are real possibilities.
Ask a lot of questions.
You’re most likely making the biggest investment of your life when buying a house so don’t hesitate to ask lots of questions. If there’s anything you don’t understand, or processes you’re not sure about, ask. Your real estate agent, lender, and inspector should all be happy to educate you on the way to the closing table.
Make an offer.
Once you’re ready to make an offer on a house, your real estate agent will help you decide on the terms. You’ll decide on the amount you’re going to offer {this may vary, depending on market conditions}, how long the option period should be, whether you’ll ask the seller to pay for a home warranty, and lots of other decisions, big and small. Sometimes the terms of a contract are more important to the seller than the price and getting creative is a great way to make an offer stand out even when funds are limited.
Avoid large purchases.
Once you’ve found a home and have an executed contract, avoid making any large purchases that could affect your ability to close. Lenders look at your debt to income ratio and making a large purchase right before closing can ruin your ability to close. That’s a last minute upset that no one wants!
If I can answer any more questions about buying a house, please reach out!
