Buying a home can be confusing, especially for first-time homebuyers.
While it will never be a quick and easy process, there are answers to several questions that if understood up-front can ease the worry and tension.
These ten tips are designed to demystify the process and help you better understand what you can expect from contract to closing.
Tips Every Homebuyer Needs to Know
1. Determine Your Needs
The process of purchasing a home can be especially daunting if you don’t take the time to determine your needs. A real estate professional will be able to best assist you if you are willing to answer a few important questions:
- What is your current lifestyle and how will that play into the neighborhood or community you choose? e.g. sports enthusiast that requires hiking trails within the neighborhood
- Size of home including bedrooms, bathrooms, and specialty rooms such as media or pool room.
- Style of home: Ranch vs. Two-Story and Tudor vs. Cape Cod
2. Consider the Cost of Homeownership
There are various financial commitments to consider, most importantly how a new home will fit into your budget.
You need to ensure that you can afford the monthly mortgage payment, as well as any expenses including utilities and/or possible homeowner’s association fees.
3. Interview a Real Estate Professional
The interview process is one of the important first steps in buying a home. An experienced sales associate will be eager to share their expertise and skills so you can make an educated decision.
Ask for references and listen to what other people have to say about their experiences with a particular agent. Ultimately, you want to find someone that knows your area, has a good grasp on current market conditions and that you feel comfortable with.
4. Decide if You Will Build or Buy Resale
Are you going to buy an existing home or build something new? There are pros and cons to both, with each a reflection of your lifestyle and needs.
This calls for thorough research to identify which of the above is beneficial to you as an aspiring homeowner.
5. Location, Location, Location
Location is one of the key factors to consider in any home purchase. Make sure that you buy a home in areas where the value of property is set to increase as opposed to those with low prices and high chances of stagnation.
6. Understand Mortgage Options
Speak with a mortgage professional about your options and make sure to share details about your current financial situation, including your monthly budget for a new home. They will be able to offer guidance on which loan program will work best for you.
7. The Benefits of a Home Inspection
A home inspector will inspect the home prior to purchase to examine for structural and safety issues. An inspection is not required, but a wise choice as it will determine if the home is structurally sound and wiring and pluming are up to code.
They will also check for safety hazards, including loose railings, rotted or damaged porch or entryway steps and broken windows.
8. Get Everything in Writing
The best way to protect yourself is to ensure that every part of your transaction is captured in writing. An example of this would be repairs the seller agrees to make prior to closing.
Your real estate professional is there to make certain those repairs are added to an addendum which becomes a part of the purchase agreement. You do not want to have a casual conversation with the seller that could be left to interpretation when it comes to the largest purchase you will probably ever make.
9. Finalize the Purchase
To avoid problems at the closing table, make sure you have a clear understanding of what to expect. Go through your loan details one last time so there are no surprises when it comes to interest rate, loan amount or mortgage term.
There will be a substantial amount of paperwork to sign so give yourself plenty of time to adequately review the details.
10. Home Improvements
Your home is a valuable asset. Once you close, continue to put aside money on a monthly basis for any necessary repairs or maintenance.
It’s also important to note that certain upgrades may contribute to lower insurance premiums. This makes it important for you to stay in touch with your real estate professional. They can provide guidance on value boosting renovations.