First Time Home Buyers
A home is wherever you choose to live—anything from a house to a cozy apartment.
In the world of home buying, there is no mercy. Imagine how it would make you feel if another was able to anticipate that you are about to make a mistake, allow you to make it, and then profit from it. This is a common occurrence in home buying. Be over-prepared and well studied when it comes to buying a home for the first time.
In this article, one can find the most important tips to preparing a successful purchase as well as the must knows to prevent that crucial mistake that could ruin your home
buying experience!
The best way to over-prepare is to do your research.
Understand value, and how homes are valued. Understand how a mortgage works, and know that the details matter. Ask yourself questions, and even more questions to the sellers, agents, and lenders. Knowing facts shows others that you have taken the time to research and understand how the housing market works giving you power in negotiations.
Important things to remember when considering buying:
1. Identify what it is you're looking for and make a list of the specifics you want. This will help guide you through the buying process. When the process becomes stressful, you will have a reference to remind you what it is you really want, what you might comprise on and allow you to not settle for whatever "seems good".
Some important factors to identify in considering a potential home are:
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Is this an investment versus a hope to make it a forever home?
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Location in relation to educational institutions, shopping, amenities, and work.
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Environment/safety of the area. Is this a place where I feel comfortable at all times day and night?
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Do you want a "fixer-upper" or "turn-key" home? Fixer uppers are homes bought "as-is" where the buyer knows he/she will have to make home repairs—some perhaps substantial—in order to inhabit and increase the value of the home. Turn key houses are ready to live in, the buyer just needs to bring their belongings to the home.
2. Savings: While it's common sense, many people fall to persuasion and the attraction of having a home of their own, literally at any costs. Ask yourself—does this make
sense financially?
- Be self-aware and only spend money that you have.
Try to avoid spending money that you do not have.
Much of the time, people rely on down payments and mortgage loans to get them through the buying or building process. If you need to borrow a substantial amount of money, perhaps at the moment buying a home isn't
right for you.
Debt is often presented as "easily solvable" or "not a big deal." The truth is, when it comes to your home, if you cannot pay, lenders can and will take your home. Buying a home for the first time is a process that needs to be done with care.
3. Find a home, make an offer, and negotiate the offer: Locating a home that is perfect for you is a process that takes time. Location, size, environments, convenient access to your needs, are all important factors to consider. Once you have located a home you are sure you would like, make an offer. This starts the negotiation process by receiving a contract or a counter-offer, and so forth.
4. In the case of Mortgage/ Down Payment:
Key idea—Preparation.
If you are willing to take a mortgage loan, you have to find a company that is willing to work with your financial situation and you have to be committed to the idea of making the monthly payments in full and on time.
Identify the difference of your fixed income and ALL expenses that you already have in place. Find this number and compare it with mortgage options that you are CERTAIN you can afford. The lower your down payment the higher the monthly expenses and interest rates.
Getting approved for a mortgage loan with a reputable company or bank is as time consuming as it is about finding what works best for you.
5. Home Inspection: Many agencies and sellers will tell the buyer it is their responsibility to have the property they are buying to be inspected, usually contingent upon a purchase contract. However, it is important to remember as a buyer, you have the power. Request that an inspection be done by the seller as well, this way you will get a better feel for what you are buying and from whom you are buying.
IF problems are found—specifically health issues, or structural problems— be sure to note these and request the seller to fix them at their cost without affecting the purchase price. Or, have the total costs of the repairs deducted from the final purchase price. It is you who is buying. If the seller wants your business they’ll be willing to negotiate (even the price of the inspection!). Be aware that the results of the inspection could very well end your interest in the home!
6. Finalize the mortgage application; finalize the purchase contract; close on the home: The process is getting closer to being finalized. To this point—you have been approved for the mortgage loan, you have agreed terms with the seller, and now it is time to move forward with your purchase. Reviewing the specifics and signing off on the loan will grant you freedom to finalize the terms of the purchase contract, and allow you to close on the home. In every real estate transaction there are closing costs, which are costs in addition to the purchasing price of the property. This entails the transfer of the home title, the retention of a real estate lawyer, government taxes, and lender-related fees. The buyer holds every right to negotiate with the seller with respect to negotiating payment of the closing costs. Divided equally, or one side pays all.
