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Top First Time Home Buyer Tips That You Probably Never Knew About

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Top First Time Home Buyer Tips That You Probably Never Knew About


So, are you ready to buy your first home? Congratulations on making this lifetime decision to own a place you will call home!

However, to get your envisioned dream home, you need to know some first time home buyer tips. The home buying process can be both exciting and overwhelming—especially for first-time buyers. 

With the median home price in the US hitting more than $350,000, you do not want to make the wrong decision. You also want to avoid an impulsive home purchase that does not suit your needs or, even worse, might trap you in a financial crisis. 

It is crucial to gain insights about this exciting journey with lots of new experiences and people to work with. But what exactly should you know?

Here is a first time home buyer guide to get you started on purchasing your first home.

Identify Your Needs

Do you know your dream home may turn out not to be the right home for you? Yes, where your life is currently and your plans for the future may not align with what you thought of when you first dreamt of a home.

Maybe you dreamt of a beachfront home, but now you need to find a home near your workplace, far away from the coast. Will your kids have a separate bedroom, or will you have them share a bedroom and make one of the rooms a playroom or a home office? Perhaps you need a property located near the school district or your workplace.

Your family lifestyle and needs will also significantly determine the kind of property you will buy. Also, when evaluating your needs, it is key to consider the future. Where are you planning to be? Perhaps you plan to have more children or you will need to care for an aging parent.

Make a list of all the things you want in your new home. Also, know those that are a must-have and those you can compromise on. This will help you get a home where you and your family will be comfortable and satisfied for years to come.

Hire an Inspector

Besides hiring a real estate agent, it is also important to work with a home inspector and appraisal. While it is tempting to dodge hiring a professional inspector for your potential home, do not do it. Only an eagle-eyed professional can detect hidden problems with key systems in the home, including plumbing, electrical, and sewage systems.

You do not want to save a few dollars by avoiding a professional inspector, only to incur thousands of dollars to repair major damages left behind by the previous owner. A home inspection is mandatory to be sure you are getting value for every dime you pay.

Also, you need a home appraisal to give you and the lender a rough idea of how much the property is worth based on comparable properties. Appraisals are key to helping you determine whether you are paying the right amount for the new home.

Start Building Your Savings

If you think you will finance your purchase with a mortgage and do not need savings, think again.

There are down payments, closing costs, appraisals, and home inspections to consider. You need to start saving now to cater to the extra costs of buying a home that the principal loan will not cover.

You might want to set up an automatic transfer to your savings account from your paychecks. Also, you may consider using your savings account to accumulate tax refunds or bonuses you get at work.

Check on your current spending and identify where you can cut costs. For instance, you may decide to take your own lunch to work rather than buy from a restaurant to save on food costs.

The home buying process can be expensive and unpredictable. You may end up encountering costs that were unexpected and unavoidable. In addition, you may incur several costs after moving into your new homes, such as renovation, decorating, or even unplanned repairs.

Understand the True Cost

When setting up a budget, do not just factor in the price of your home. You need to know what your new home will truly cost. How are you going to finance the big purchase?

If you are thinking of getting a mortgage, keep in mind your true home cost will be more than the mortgage payment. Make sure to estimate your monthly payment by using a mortgage calculator. Consider the mortgage you are taking to avoid falling into financial debt trappings for years.

Also, keep in mind any property taxes you will need to pay after home transfer and homeowner's insurance. Check also on the home maintenance, such as unplanned repairs, renovations, and taking care of your yard. Monthly bills such as utility costs also contribute to the cost of running your new home.

Through this, determine if you can comfortably run the new property with your current income while servicing the debt.

Build Your Credit Wisely

If you are preparing to purchase a property, be whip-smart with your credit. When seeking financing from lenders, they use your credit score and report to determine if you qualify to get approved for the loan. Also, your credit score determines the loan terms and interest rates for your loan.

The review of your credit report helps to evaluate your balances, payment habits, and even overall financial health. When planning to buy a home, adjust your habits to improve the overall credit score. For instance, do not open a new line of credit or buy a car before applying for your new home.

Make sure to pay your bills on time and do not start influencing your credit card rating. Lenders want to see consistency in your behavior pattern to ensure you can be relied upon to make the payment in the future.

It is important to ask for a free copy of your credit report annually from several major credit bureaus. This can help you know if you know your credit status, dispute errors (if any), and look for ways to improve your credit score.

Among First Home Buyer Tips Are Seeking Help

If real estate investors find the property transaction process challenging, what about you? To avoid the hustle and tussle of the complicated process, look for a professional real estate agent. With their in-depth knowledge and adeptness in home transactions, an agent is an invaluable partner.

The agent will represent your interests and guide you through the home purchase journey. Also, they already know the best practices and the dos and don'ts of the real estate market. With a reputable real estate agent, you can be assured of getting the best deal for your next home.

Also, a local real estate agent knows the laws and regulations on property transactions. When finding one, you must find an experienced and reputable real estate agent to shun more stress.

Make the Decision in Your Own Time

Before making an offer on a home, consider checking what other lenders are offering. When shopping for a home or mortgage, do not settle for the very first option you come across. You do not want to leave out better rates, terms, or offers by making a quick decision.

Take your time to understand how things work. Confirm what options you have and think through to determine the best course of action. Do not get carried away by the excitement and end up making a major decision based on temporary emotions.

Get well informed and carefully contemplate every decision you make in the home buying process.

You Don't Have to Pay the Seller's Asking Price

When the seller makes an offer, you do not have to agree to the offer. Make a reasonable counter offer within the seller's range. Avoid lowball offers that could belittle the seller.

As a first-time homebuyer, consult your real estate agent to know the right amount to make as your offer. The offer should be competitive, within your budget, and also reflect your home's value.

Do not forget there is room for negotiations, and your agent can help with this. For instance, the real estate agent can negotiate to have the seller pay closing costs or cover the cost of repairs identified during the inspection.

When submitting your offer, you need to be confident and committed to it. Otherwise, you risk losing your hard-earned deposit.

Consider These First Time Home Buyer Tips

Your first home purchase could be the biggest financial decision you have ever made, and you do not want to risk any mistakes.

The process can be overwhelming with a lot of things to consider, but all will be worth it in the end. Use these first time home buyer tips to get started on this exciting journey.

Are you looking for your first home? Hommati has you covered. We have a national real estate website that helps clients search and find top real estate values, home values realtors, and real estate agents.

Contact us today for all your real estate needs, including more first time home buyer advice.