Are you finally ready to get into the housing market? If you so, your first time can be pretty exciting yet daunting. Considering the fact that you’ve never been involved in the world of real estate before, you’ll definitely need to take a few pointers before you dip your toes in.
Here are a few important tips that all first-time homebuyers should consider when getting into the market for the first time.
1. Get-Preapproved BEFORE You Start House Hunting
A lot of sellers won’t even bother dealing with buyers who haven’t been pre-approved for a mortgage, so you might as well get that step out of the way. This is an important first step in the buying process and shouldn’t be skipped, especially for first-time buyers.
Getting pre-approved will tell you how much you can actually afford in a home, which will help you focus only on properties that fit your budget. Plus, it will help get the actual mortgage approval process moving along a little faster because much of the necessary documentation has already been submitted to your mortgage broker.
2. Don’t Spend Up to Your Pre-Approved Limit
Your lender will tell you how much you can afford to spend on a home purchase based on the financial documents you provided, but that doesn’t mean you should spend up to that amount. There are so many other expenses that you will need to take into consideration, such as closing costs, moving costs, new furniture, repairs (if necessary), and maintenance costs.
Then, of course, you’ve got a life to live, which can also be expensive. Start with a plan, and don’t stray from your budget. Better yet, keep a little wiggle room in your budget just in case more expenses come your way that you weren’t prepared for. The last thing you want to do is wind up ‘house poor’ because you spent as much as your lender said you could.
3. Be Open-Minded
It would be wonderful to find a home that is exactly the way you want it to look. But that doesn’t happen all the time. No two homeowners are exactly alike, and you will likely walk into homes with questionable taste. But that shouldn’t deter you from a great deal on a great home.
Look past any ugly wallpaper, unsightly wall-to-wall carpeting, or old-fashioned light fixtures. These are easy cosmetic fixes that can be updated at your discretion after a deal is done. And that way, you’ll be able to create a unique space that’s all your own.
4. Consider Fixer-Uppers
Expanding on that last point, don’t rule out a home that’s in dire need of TLC (within reason). In fact, you may be able to add plenty of sweat equity into a home by picking the worst house on the best block and making the necessary improvements to bring it up to par.
Not only will you likely pay a lower price for the home, but you can add serious value to it while fixing the place up the way you want it to.
5. Don’t Skip the Inspection
This is an obvious suggestion, but first-time buyers should never skip the home inspection unless they’re planning on completely tearing a home down and rebuilding from the ground up.
Buying a house is one of the biggest financial commitments you’ll ever make, so you should make sure that the home you’re buying is in the exact condition that you believe it’s in when you make an offer. An inspection will help you determine this before you fully commit.
6. Keep Your Emotions in Check
It’s pretty common for first-time buyers to let their emotions take the reigns in a real estate transaction, but it’s important to lead with your head rather than your heart. For instance, many buyers may fall in love with the first home they see, often overlooking many of the property’s flaws.
Instead, it’s essential to leave emotions out of the picture and be completely objective and realistic about properties and their locations in order to be sure that the home you’re planning to buy is truly the best one for you.
7. Don’t Make Any Large Expenditures on Credit Before Your Mortgage Closes
Getting approved for a mortgage can already be a tall order for first-time buyers, so you definitely don’t want to do anything to mess it up. However, that’s exactly what may happen if you decide to start applying for new loans or credit in order to make a big purchase.
Doing so can throw a wrench into the mortgage approval process and cause a delay in closing. It could even result in a rejected mortgage, which would completely derail a real estate transaction. If you want to make a large expenditure, wait until after the mortgage closes first.
8. Don’t Get Too Attached to Listings You See Online
It’s important for sellers to have professional photos taken to be used for online marketing, and these images are meant to showcase homes in the best light possible. But sometimes the photos are actually too good and are not really capturing what the home actually looks like in person.
It’s not uncommon for buyers to fall in love with a place from the images they see online, only to be sorely disappointed when they visit the property in person. Make sure to book a showing with a property before you form any opinions about it.
9. Visit Many Properties Before Choosing One
It’s not uncommon for buyers to fall in love with the first house they see, but putting in an offer without seeing enough properties to make accurate comparisons is a big mistake.
It is important for buyers to take the time to visit multiple properties before being confident in the purchasing decision they make. There’s nothing wrong with buying the first home you see but do so only after viewing a few more first for comparison purposes.
10. Be Prepared For Bidding Wars
Depending on where you’re looking to buy, you could be up against some stiff competition. Many housing markets across California are notorious for bidding wars, leaving many buyers high and dry. This is definitely not a pleasant situation to be in, especially when it happens repeatedly, but it’s a reality for many centers across the state. Just be prepared to fight in a bidding war, and more importantly, know when to walk away from a potential deal and cut your losses. There will always be other houses out there.
11. Get Yourself an Experienced Agent
Having a real estate agent in your corner when buying a home – especially if it’s your first time – can ensure that the process goes smoothly. As newbie buyers, you definitely don’t want to get into the process alone, and having an agent on your team can help guide you and ensure that all decisions you make are sound ones.
The Bottom Line
Being a first-time homebuyer can be incredibly exciting and even scary, and there are definitely right and wrong ways to go about the process. To make sure you make all the right moves, work with a skilled and seasoned real estate team that can help you successfully land your first home.