Becoming a first-time homeowner can be a little intimidating. You have to go through the loan approval process, find a great home you can see yourself in for a while, pack up and move all of your belongings, etc.
To help all of the first home buyers out there, we've put together a shortlist of Dos and Don'ts.
First Time Home Buying Do: Get Pre-Qualified
Before you get too far down the path of buying a home, you should go ahead and get prequalified. There are three main reasons why we say that.
First – it helps you understand how much home you can afford. You may think you can afford $X, but really the mortgage company may help you realize you can afford $Y.
Second – it prevents wasting time. Home sellers like to see that buyers are pre-qualified before accepting an offer. They don't want to get halfway through the selling process and then find out the buyer can't get the loan.
Third – it front-loads the work. You have to get qualified anyway, why not do it up front?
First Home Buyer Don't: Go with the First Agent You Meet
Think about your real estate agent as if you were hiring someone at your full-time job. Usually, you don't just hire the first person that applies, right? You take the time to interview several people to make sure you get the best candidate.
The same goes with getting your agent. They're helping you make the biggest purchase of your life – you want someone who knows what they're doing on your side!
First Time Home Buyer Do: Evaluate the Market
The real estate market is interesting right now thanks to low supply and high demand. But that's even more reason to pay attention to the market, such as knowing the average home price for starter homes. You don't want to overpay on your first home if you can avoid it.
That said, the market right now is very hot so a lot of homes are selling for more than the asking price. Between millennials trying to buy homes and investors buying rental properties, there is a lot of competition out there.
This leads us to our next point.
First Time Home Owner Don't: Fall in Love with a Home
Sometimes real estate agents will tell their clients not to fall in love with a home until they actually own it. This is great advice because sometimes things fall through and you don't get the home.
- Maybe your financing falls through for some reason
- The inspection may find critical or very expensive problems and you decide to back out
- Someone may submit a higher offer than you
The unfortunate truth is that things can go wrong. If you fall in love with a home and aren't able to buy it, you'll be heartbroken. That's why it's best – although difficult – to avoid getting too attached until you actually move in!
Buying a House for the First Time Do: Keep Cash for a Rainy Day
Let's say you have $50,000 saved up and you planned on using all of that money for the down payment. That's great, but you may want to consider keeping some money – maybe $5,000 – in your savings account for now.
Why? Because there's a good chance you'll either want to upgrade something or need to fix something within a few months. No, it's not guaranteed, but it can happen.
First Home Buyer Don't: Go with an Inexperienced Mortgage Company
Not all home loan companies are the same. In today's booming market, new companies are springing out of the ground to take advantage of today's favorable conditions. But this is the biggest purchase of your life – don't you want to work with someone who has been doing it for a while?
Give us a call at (877) 306-0222. We look forward to walking you through the first-time home buying process and answering any questions you have.