8 Tips for First-Time Homebuyers
- Know how much home you can afford. Look at your average monthly budget and see what you can spend on your mortgage comfortably. Find a home that fits in your budget, but that also has the features most important to you. Skip the upgrades if they don’t fit in your budget, and ask your Realtor® to tell you what closing costs to expect.
- Know what you need and want in a home. If you need lots of space, make that a priority. If you love cooking, make sure a well-equipped, modern kitchen is a must have. Make sure you also include neighborhood, schooling, and commute in your list of priorities as well.
- Get pre-approved for a loan. This will also help you figure out how much you can afford and make things less scary when trying to figure out which houses are not only in your budget, but also in your priorities list.
- Explore your mortgage options. Are you a person who never plans to buy another home, and are only interested in a fixed-rate mortgage? Do you want to use this as a starter home and have an adjustable rate mortgage? Compare different banks and home loan options, and don’t be afraid to do your homework. Need a referral? Your Realtor® will be able to help.
- Find the right Realtor®. You need someone you not only trust, but like to work with. You want quality advice when you need it. Ask friends and family who they have worked with, and if they had a good experience. This won’t work if you’re moving to a new city, however. Ask potential agents how many homes they’ve sold in your target area or what certifications they have. You can also look for testimonials for Realtors® in the area where you’re moving.
- Understand the offer process. So you’ve found a house. Know how long the house has been on the market, how the asking price compares to different homes in the area, and how comparable other properties are. Negotiation is normally inevitable, so make sure to leave a little leeway. Make sure your offer also includes other factors like financing and property inspections, and be aware of any deal breakers (e.g., cracked foundation, a roof that needs to be replaced, etc.) before you make an offer.
- Get a home inspection. This will tell you if there are any problems with the home that you weren’t aware of when you made the offer. Know what’s inside the walls, underneath the floors, if the roof leaks or there is flood damage. You’ll be happy you did. Check with local associations to find a reputable inspector or ask your Realtor® for a recommendation.
- Know what you’re signing before you sign. Ask for draft copies of anything you are supposed to sign before the closing date. This will help you figure out what you’re signing. If you don’t understand something, don’t be afraid to ask someone in your network of contacts to explain.
Still have questions? Ask an experienced local Realtor® what you need to know before buying your first home.