Buying a home entails making big decisions. It can be a very demanding experience for first time home buyers, and can be financially and mentally debilitating.
If you are looking to purchase your first home, you must be prepared and knowledgeable of the steps you need to take so it will be a great and fulfilling experience. And who knows, you might end up buying for more properties.
Here’s a guide to make the buying process much easier for first-time home buyers like you:
Save Up!
It is only logical for you to save up so you’ll have financial resources if you want to buy a house. It is an expensive commitment so you’d better be prepared for the costs. You will most definitely need money for down payment, taxes, and other fees. Don’t forget closing costs and additional charges for decorating and repairing the house.
Check your credit.
Aside from saving up money, if you are a first-time home buyer, you should check your credit scores to determine where you stand in terms of financial capacity. Check if you need to improve your credit score. You may do so by paying all your bills on time. Having a great credit score definitely helps in getting a better interest rate and better chances of getting your loan approved should you need to apply for one.
Determine your budget.
Knowing your budget is imperative, especially when purchasing a new home. You need to calculate how much you can actually afford. It is key to set a budget, especially for first-timers. If you set a budget, you can get an idea on how much money you have and how much more you need to borrow. To help you determine how much you can afford, you can use any of the mortgage calculators available online.
Get pre-approved for your loan.
Buying a home can be quite confusing for first-time home buyers, so it is best to select a trusted mortgage banker and get pre-approved for a mortgage. This will help you determine how much you can shell out on a house and still get a loan. To apply for a pre-approval, you just need to submit your basic financial information
Why is getting pre-approval for a mortgage even important before buying a home? Well, to put it simply, when you, as a first-time buyer, are pre-approved, it basically means a mortgage lender or bank has already verified your information and agreed to let you borrow a certain amount of money to purchase a new home.
Hire a real estate agent.
After knowing your budget and getting pre-approved for a mortgage, get a real estate agent to guide you through the process of shopping for a home. A real estate agent will help you find the home of your dreams and would make sure you go through the whole process with ease. Your agent can advise you on what’s available in the market and which homes are priced attractively. Your agent will help you, as a first-time buyer, to negotiate the pricing and the terms of the house being sold, making sure that your choice is within your budget. It is alright to seek advice from friends, family, or colleagues when buying a home, but hiring an experienced real estate agent to guide you will save you from all the hassle.
Know what type of house you want.
Typically, after sorting out your finances and hiring a real estate agent, you would need to decide what type of house you want. Determine if you want a house or a condo, and where it is located. It would be better if you create a list of criteria for the property you want to buy. While you are at it, also list down items you would like to have inside your home. Doing this will make it much easier for you and your agent to search for your desired house.
Research the market.
Once you have defined the type of property you want, it’s now time to research the market for available homes. You can also visit property listing sites or ask for recommendations from people you highly trust.
When searching for potential homes, your real estate agent comes in really handy. Your real estate agent will help you identify homes that fit your criteria by giving you some options and will schedule appointments for you to visit open houses. Compare and contrast your options. Narrow down your choices.
Quick tip: When you visit open houses, take photos and make notes. You can use these as references during the decision making process.
Ask a lot of questions.
After finding a house that matches your criteria, you and your real estate agent will eventually have to deal with the seller. It is important that you get to scrutinize the property and everything that goes with it.
Don’t just ask questions, ask relevant questions that would help you decide if you should make an offer or not. In fact, during the whole purchasing process, be as inquisitive and involved as possible.
Make an offer.
When you have fully decided to purchase a house, it is now time to make an offer to the seller. Your real estate agent will have to help you with this one and will act as the negotiator. Beforehand, you need to discuss with your real estate agent the price to be offered. You can rely on your agent's expertise to come up with a price to offer when purchasing a home for the first time. Your real estate agent will then prepare all the paperwork for you.
Do a final walk-through.
Do not skip this part of the process. As the final step draws near, many issues can still arise. Before closing the deal, it is always a good idea to do a final walk-through of the house to ensure that it is in the condition which you and the seller agreed on. It is best if during the final home inspection, there is a professional home inspector with you and your real estate agent to check the condition of the house.
Make sure to inspect every nook and cranny of the house. Check the doors, the lighting fixtures, water pipes, bathroom fixtures, ceilings, floors and walls, windows, heating and air conditioning, and more. If in case the inspector finds any issues with the home during the final walk-through, your real estate agent will help you negotiate for a better price will make sure problem will be resolved before you move in. The final walk-through will help you identify any last minute changes or repairs that need to be addressed prior to closing the deal.
Seal the deal.
Congratulations! If you’ve made it this far, it means you’re moments away to becoming a proud owner of a new home. It is during the closing of the deal when you need to sign a bunch of legal paperwork and make sure your payment has been transferred from the bank to the seller. This is when the house keys are given to you, making you a proud first time owner of a house.