What are the Things that a First-time Home Buyer Should Consider Before Purchasing?

 

Having a home of your own is every American’s dream and can be considered as one of the biggest purchase one could ever have. Most people would give their everything to fulfill this dream and achieve their goal of owning a house. As exciting as it may sound, searching for your dream home can really be a daunting task and can cause so much stress, especially for a first-time home buyer. Not to mention, a lot of things should be taken into consideration as well.

If this is your first time to look for a property, then here are some tips that could help make your buying experience as smooth as possible.

 

Pre-Qualification

Pre-qualification is one of the first steps that you have to take during the home-buying process. Before you even start looking for a property, it is important to get pre-qualified. Going through this process would give you an idea on how much you can afford for a home, therefore saving you time and effort. 

The pre-qualification process usually doesn’t take so much time as it is solely based on the information that you provide to the bank/lender. However, it is very important to make sure of the accuracy of the information that you provide.

Though the document requirements may vary by lender or by individual, the information that you need to prepare would usually include:

• Details of your income – proof of income like W2 statements, recent pay stubs, or tax returns.
• Assets – you may also be asked to show bank statements or investment account statements as proof of your ability to pay the down payment and other possible costs.
• Debts – lenders may also require some documents related to your outstanding loans for them to be able to measure your debt-to-income ration.

Pre-qualification can really be helpful especially with first-time home buyers since this may also be a chance to discuss mortgage options and find the most suitable plan for you. Remember to mention your goals and needs as well. 

Meet with a mortgage broker and get an estimate of the loan,  amount that you could possibly get approved of.  

 

Pre-Approval

While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. A pre-approval letter carries more weight than a pre-qualification letter because it indicates a commitment that the lender will provide you with a loan. It also sets your budget and will save you from being disappointed when going after homes that are out of your price range.

With Pre-Approval, the buyer actually applies for a mortgage by completing an official application form and submitting the necessary documents for an extensive financial background check. Based on the review, you will be provided with the exact loan amount that you can get.

This way, assuming the home you’re interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. This will give you an advantage in competing in the market. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.

 

List of Needs & Wants

 

Differentiate your needs from your wants. Make a list of the things/items that you would like to have in a house. 

Make two lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). Only include items that are really necessary and things that you can’t live without.

The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. These are the things that you can live without but would add value to the property.

Recognizing your needs from your wants would make your search easier. It would help you narrow your choices. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for. Know your priorities and focus on what is more important.

 

Representation by a Professional

 

Due to the advancement of technology, searching for property seems easier. You can get information online with just a few clicks which is why home buyers wonder if there is really a need to hire a real estate agent.

Though doing an online search can really be helpful and is usually the first step that buyers take when looking for a home, having an agent is proven to be really helpful and would lessen the pressure that you have to take. Having an expert beside you could really make the process less tedious and confusing. 

A real estate professional would have the necessary knowledge and experience and knows the ins and outs of the business. She can point you in the right direction and provide some facts about the properties. She can also guide you on making the right choices which include naming the price. As a first-time home buyer, having an agent to represent you and help you through the process will save you time and effort.

Find someone who understands your needs and makes them her priority. Make sure that this person is responsive and is willing to answer all of your questions. Also, find one who is honest and trustworthy and would not only say things that you would want to hear. An expert’s opinions and ideas are very important especially for someone who is new with the home-buying process.

Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller. 

 

Focus & Organization

Being organized may also help in reducing the stress that comes with home buying. As a first-time home buyer with no experience yet, staying focused on your goals and organizing your resources could lessen the burden. In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:

• 1. One or more detailed maps with your areas of interest highlighted.
  2. A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper.
  3. Paper and pen, for taking notes as you search.
  4. Instant or video camera to help refresh your memory on individual properties, especially if you are attending a series of showings.
  5. Location: Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?

Visualize the house empty & with your decor

Are the rooms laid out to fit your needs? Is there enough light? Imagine yourself living in the house. Think of how it would feel like living in the house.

Imagine how you would design the house and how it would look like. Do you see yourself in that house for the next few years or so?

 

Be Objective

Instead of thinking with your heart when you find a home, think with your head. Don’t let your emotions rule over your reasons. Does this home really meet your needs? Is this really the perfect house for me? Is this the one I’m looking for?

There is really no specific number of houses that you have to look into. It doesn’t really matter whether it’s the first house or the 20th house that you’ve visited that got your attention. What is important is that you have a clear idea of what you’re looking for.

Don’t rush into buying a house just because you feel that you have to make a choice. There are many houses on the market, so don’t make a hurried decision that you may regret later.

 

Be Thorough

A few extra dollars well spent now may save you big expenses in the long run. Don’t forget such essentials as:

• 1. Include inspection & mortgage contingencies in your written offer – Home inspection is a very crucial part of the process. At this point, an inspector checks on the house to make sure that it’s working properly and identifies needed repairs. Whether you are purchasing a new or a pre-owned house, you should not skip on the inspection. Seeing that the house is in good condition may not necessarily mean that it really is. There might be some things that you don’t see and would only be revealed once an inspection is done.
  2. Have the property inspected by a professional inspector – Trust only the professional. A professional inspection would help you understand what you are trying to purchase and would uncover possible issues.
  3. Request a second walk-through to take place within 24 hours of closing – A final walk-through is important for you to see whether the house or property is still the same as the last time you see it or if changes that were not agreed upon were made (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light). It would also allow you to check if the repairs that were supposed to be done were completed and that the contract terms are satisfied. Make a list of the things that need to be checked. 
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The home buying process may be confusing and all of the above may seem rather overwhelming. That is why having a professional to represent you and keep track of all the details for you is highly recommended.

For a smooth and less stressful home buying experience, please call me directly, Pam Dent at 434-960-0161, to discuss any of these matters in further detail. 

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