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Tips for First-Time Homebuyers
That exciting day has finally come: you are ready to buy your very first home. Before you leap through the front door and start painting murals, make sure that you have done your homework and, most importantly, that you have identified what you can afford. Here are some tips for first-time homebuyers, including the benefits this opportunity gives you and guidelines on the best way to go about the process.
Great Reasons to Own Your First Home
If the thought of becoming a first-time homebuyer makes you feel pressured, overwhelmed, or just out and out stressed, you are not alone. Your first home is one of the largest investments you will ever make in your life. Take a deep breath and remember why purchasing a home is a solid choice:
- Stability and Pride: Though buying a home might make you feel forever bound, it actually allows you several freedoms you can't have while renting. You don't need to ask permission to paint walls, remove cabinets, or replace tiles. Your home is yours to make as you want. It's the place where you will have friends and family visit, where you will raise your children, or even where you might work. Your home is the place where every night ends, and where every new day begins.
- Value: Historically, real estate has always appreciated over time. The longer you stay in your home, the more equity you can accrue. Many financial experts regard home or property purchase as a healthy guard against inflation.
- Home Equity: As you build equity in your new home, there are many home equity loans and line of credit products available to draw against it, at a much lower interest rate than standard loans, credit cards, or other credit lines charge.
How Much Should a First-Time Homebuyer Shop Around?
The length of time a first-time homebuyer should spend shopping depends mainly on two factors: level of motivation and current market conditions. In a buyer's market, lots of houses are available, and they're not selling quickly. In these markets, you will have the luxury of time while shopping around, and you will likely get a better deal on the price of the house. In a seller's market, you won't have the same luxury of time. Houses tend sell faster in a seller's market, and in a lot of cases you may be forced to put in an offer quickly, otherwise you may miss the sale.
Some real estate agents say that a motivated buyer who knows exactly what he or she wants in a home will usually find one within two weeks. This is really up to you. If you have children starting school or a job that begins on a set date, you may have a more rigid, tighter timeline. If you are amid a buyer's market however, and have no urgent need to move, you could conceivably search for months.
It is generally inadvisable to see more than seven homes in a day. After viewing more than seven in a day, most people become over-exposed, and they will not clearly remember the pros or cons of any of the homes they viewed. When you set out on a tour of homes, you should be well rested and well fed. Don't forget to bring your camera and don't forget to take notes along the way. These will help you remember the features you liked and didn't like when you review everything. Don't forget to examine a home's surroundings, such as the yard, neighbours, amenities in the neighbourhood, and proximity to busy streets.
Get Pre-Approved for a Mortgage
A mortgage pre-approval will save you time, narrow your search and will ensure that you know exactly what will fit in your budget. It will communicate to the seller that you are a serious buyer with your finances in line, and not just kicking tires. A mortgage pre-approval will reduce the number of homes you are looking at by allowing you to hone in on houses that you know you can afford, and it will encourage a seller to expedite their consideration of any offer you make.
Utilize a Professional
Employing a reputable expert to lead the hunt is of great help to the first-time homebuyer. Real estate agents can point out features or flaws that you might overlook, and will ask the questions you might not think to ask. Real estate agents have much more experience in home shopping than you do thus far. So long as you select someone you trust, and who specializes in finding homes for people like you, you should find their help a large asset.
Ensure that you have your real estate agent properly research the properties they show you. Are there schools nearby? Malls and stores? Has the neighbourhood been known to have environmental hazards or high crime rates?
When you have narrowed down your search to two or three properties, go to revisit them. With a fresh view, you should be able to make a firm, secure decision on which property is right for you; one that satisfies all your objectives for homeownership.