Purchasing a home is one of the biggest expenses of a lifetime. Considering the ongoing financial responsibility, it is important to think through a realm of scenarios to ensure your first home-buying experience runs smoothly.
Home Buyer Tips
Jumping at the first home that appeals to your fancy, especially if you’re a newbie at home buying, runs the risk of a backlash of unending hardship. The following are central points that can help you navigate the process and make that gigantic leap to blissful first-time home ownership:
1. Ensure you’re ready to buy
Being in the right emotional and financial situation is crucial to making the big move. When you’re ready to buy your first home, you’ve evaluated your job prospects and whether you will be relocating in the near future or staying put. If you have plans to move anytime in the near future, it’s better to postpone the investment on a home.
It is important that by the time you decide to buy a home, you’ve accumulated enough funds to make the down payment as well as pay for home insurance, property taxes, maintenance and inevitable repairs. The most cost-effective situation is a 20% down payment, which avoids the additional expense of a mandatory private mortgage insurance (PMI). However, your realtor can advise you on what is financially acceptable—even a 10% down payment.
2. Know how much you can afford
One of your first steps in the buying process is to visit a home lender who’d be in a position to grant you a mortgage pre-approval. A pre-approval lets you know within what price range you should start looking for homes. It is important to understand that if you are pre-approved to purchase a $200,000 home, that doesn’t necessarily mean you should spend that amount on your first home. In fact, experts recommend to keep your mortgage, taxes and insurance to within 25 to 30% of your income. Others suggest limiting your home costs to 2.5 times your yearly salary.
Most realtors will only show you homes if you have in hand a mortgage pre-approval letter. Sellers, too, will take your offer seriously if you are pre-approved. Many well-priced homes sell fast. So if you’re already pre-approved, this responsible step makes your offer one to consider immediately, and a more favorable one.
3. Put together an A-list team
Once you know your home-buying budget, look for a realtor who meets your needs. A compatible realtor is crucial to helping you find the home of your dreams, with all its bells and whistles. An ideal realtor is familiar with the area in which you wish to live. The realtor will explain the current market and answer any questions you may have about the home itself, its location and surrounding amenities. Plus, be sure to enlist a mortgage professional or real estate lawyer prior to your initial search to help you once you’re ready to sign the dotted line.
Home Buying Tips: The Search
1. Observe the neighborhood at night vs. day
Visiting potential new homes is exciting and can give you new ideas and perspectives on the home into which you’ll eventually settle. Sure, it’s important to look at the house itself. Even more critical is to visit the neighborhood at different times to get a feel for how noisy evenings can get or how busy the commute will be from your potential new home. Daytimes are usually quiet, with kids in school and most adults at work. Evenings and weekends are when you get the total picture of the neighborhood and its inhabitants.
2. The neighbors are a rich source of information
Talking to the neighbors of your prospective home is invaluable. Those familiar with the area can give you a thorough assessment of petty crime, barking dogs, foundation issues or even some history on the house you have in mind.
3. Ignore reversible details
You may love a house you’ve visited, but abhor the bright red carpeting, the neon walls or even the countertops. A simple paint job will give you the ambiance you’re aiming for. Shaggy, 1970’s carpeting can be replaced. You can always upgrade the kitchen with granite countertops at your leisure.
4. Location, location, location
Consider you may have to compromise. If you have kids, you may want to be near a certain school district. In exchange, you may have to settle for a smaller house—or a larger one. Or, if your desired house is close to the water, you may encounter a flooded basement on occasion. Your real estate agent can fill you in on issues and offer solutions when it comes to choosing the best areas that fit your needs.
Process of Buying a House: When You Find the Right One
1. Move fast
When you’ve found the right home, act fast. As a first-time buyer, you may wish to think about it for a few weeks. Remember, however, that well-priced homes sell quickly—often within days.
2. Home inspections are crucial
Invest in an independent home inspection rather than rely on the homeowner’s inspection. You want to know in what condition the house is when you decide to buy. Especially on a foreclosed home, a home inspection is extremely important. The home inspector looks for hidden flaws in the home, such as termites, mold issues, a faulty roof or other problems that may prevent you from buying the home. If issues arise subsequent to the home inspection, you can negotiate a better deal.
3. Consider potential problems
The next step is a mortgage approval. Finally, a home appraisal that equals the purchase price is in store. Consider that some buyers are willing to waive contingencies in order to compete. Experts recommend not waiving contingencies unless you are 99.9% sure it’s safe to do so.
Consult with a Real Estate Attorney
Once your bid on the desired home is accepted, you’ll move into escrow and soon close on the home. Throughout the process, however, contracts may be daunting; or real estate documents may require a professional to explain the nuts and bolts. When you aim to be in the know, consult a real estate lawyer from a reputable firm, like Berry K. Tucker & Associates, Ltd.
Real estate lawyers like those at Berry K. Tucker & Associates, Ltd. offer years of professional experience in residential real estate transactions. When you’re ready to close, the firm’s real estate attorney can attend the closing meeting, answering any questions and simplifying the process along the way. As a first-time buyer, you’ll find that a real estate lawyer can be an invaluable source of security.
Tags: home buyer tips, real estate attorneys, real estate law, real estate layers
