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Tips on Preparing for a First Home Purchase
Buying a home is a formidable task. If you have never purchased a home before, the task might seem completely overwhelming. Not to worry! Here are 10 great tips for first-time home buyers that can make the experience completely doable.
Whether you are considering getting a home within the year, or simply want to prepare for buying one in the distant future, these guidelines can help you get started. No matter where you are in the process of purchasing a home, you can certainly benefit from saving as much money as possible. Finances play a huge role in home purchases, so having your finances in order will make the entire process much easier.
Home Price Research Sites
Allows you to search for homes and can even connect you with a real estate agent when you're ready to take action. Hubber livelonger (see the comments) used this to successfully find the home in which he currently lives :D
Offers real estate listings, school and neighborhood information, and additional information and statistics that will equip you to make knowledgable decisions with your home purchase
A resource for finding local real estate agents and comparing home prices
A site showcasing real estate for sale, home prices, and general real estate values
10 Tips for First Time Home Buyers
- Evaluate your personal finances: Review your financial situation. Check your credit score. Are you in debt? Are you living from paycheck to paycheck? If so, it is important that you first take care of your major financial problems before taking on the large task of buying a house. Improving your financial wellbeing now can save you from a ridiculous interest rate with your future home mortgage - not to mention reduce the risk of future financial hardship in the future
- Start saving now: The more you save, the better a financial situation you will be in when it comes to getting a mortgage loan or making a downpayment on the house. Establishing a fund for closing costs and down payments will be extremely helpful later on. To find out how much you might be paying in closing costs, you can research annual closing cost surveys from sites like Bankrate.com and other local realty sites.
- Take things one step at a time, and be organized with your research: You are about to embark on a rather complicated process. Do not let the details overwhelm you, and do not let all the information you take in get lost in the shuffle. Take notes and keep them in an organized place- be it on your computer or in a file folder. And finally, KEEP CALM throughout the process - letting yourself get stressed or over-emotional will only compromise your ability to make sound judgments and decisions
- Research home mortgages: Becoming knowledgable about the different types of home loans you can get can help you decide what kind of loan would be best for you. ALSO- Get pre-approved for a home mortgage loan, if you need one: Doing so will allow you to know what your general budget for a home is, as well as handle the task ahead of time, so you can dedicate more of your focus to other things down the line
- Know your bounds: Calculate what you can afford to pay monthly for housing: This would include not only the cost of your mortgage, but also homeowners insurance, property taxes, maintenance, and the like. You can get a general idea of how much your homeowner's insurance would cost by calling a local agent and asking for a quote for a home in the area in which you'd like to live - as well as giving a general description of the size and age of the home you might be interested in getting
- Research home prices: Using sites such as Homegain and Zillow (showcased to the left), research the prices of homes in neighborhoods where you would like to live. Determine whether or not they are within your budget, and look for good bargains
- Consider consulting a professional: Working with a real estate agent or another professional to help you navigate listings, finances, and the like might mean spending a bit more, but it might also save you from making too high an offer on a home, as well as spare you the opportunity cost of researching a lot of things on your own
- Pace yourself when visiting homes for sale: Visit no more than six homes in one day- less if you think you will get fatigued. Being water and snacks with you so that you do not get dehydrated or hungry, and make sure you get a good night of sleep before a big day of house hunting. Viewing the places where you may potentially live - and trying to evaluate whether or not they are right for you- is mentally taxing. Acknowledge that and treat yourself to something nice and relaxing after visiting open houses.
- Follow your intuition: When it comes to actually choosing a home, your research plays a big role, but in the end, you need to follow your gut instincts. If a home feels 'right', then go with it. Over-thinking things isn't always the best way to go
- Make an offer: The offer you make on your home will depend on the current real estate market, the neighborhood in which you want to buy your house, and several other factors. Be aware of what the current real estate market is like when considering what offers to make, and also be prepared to be presented with rejection or a counter-offer
BONUS TIP: For after you buy...
Insure your home: You are going to be spending a lot of money on your home, so it is worth the investment for you to insure the place once you have it. There are many types of insurance: title insurance, homeowners' insurance, home warranties, flood insurance, earthquake insurance, etc... Carefully research your options and choose insurance plans (or a plan) that goes well with your budget, location, and home