First Time Home Buyer Survival Tips
Buying a home for the first time is a big deal. There is a lot of preparing that goes into this milestone, both mentally and physically. We’ve all seen the sometimes misleading advertisements of prospective buyers. There is a lot more that goes into this process behind the scenes. But if you come prepared and follow a few simple tips, you may be able to skip happily into the sunset after all!
First, let’s review the most common mistakes that first time homebuyers can make. The top mistake made by first time homebuyers is searching for homes outside of their price range. To avoid this problem, put pre-approval on the very top of your to-do list. Once you are pre-approved for a mortgage by a qualified lender, you will be able to find a home more suitable to your budget.
Another common mistake first time buyers make is getting too emotionally involved in a sale, which can give the seller’s agent an upper hand in negotiations. Even if you are head over heels for the house, keep your poker face on! You can easily avoid this mistake by selecting a seasoned Realtor to represent you. This is another common mistake first time homebuyers can make. Be sure to find a trusted, recommended agent who will be sure to get you through the process in the most efficient and caring way. Source reputable reviews online or seek referrals from family and friends when searching for your real estate agent. It’s important that you feel comfortable with your agent and that they have your best interests at heart.
The next two mistakes involve budgeting. Many buyers fail to factor in the additional costs of owning a home, such as maintenance and repair. It is recommended to save a small percentage, 1% at most, of the home’s purchase price for annual repairs and upkeep. You’ll also need to anticipate the likely possibility of property tax raises in the years to come. A good way to prepare for this cost is by simply talking to the neighbors.
Staying positive and patient is important. Don’t get discouraged if your first offer isn’t accepted. Many buyers make the mistake of assuming the offer process is simple. There are plenty of houses on the market and if one doesn’t work out, another will. Also, be sure to hire a professional inspector before buying. Although agents & sellers are required to disclose anything wrong with the house, it’s always a possibility that there are damages or quirks unknown to both. It’s always best to have multiple & professional opinions before taking the financial leap of home ownership.
Patience is important after the home purchase too. A very popular mistake many buyers make after purchasing their first home is becoming overly ambitious with improvement projects. Be patient, and make changes over time- the house isn’t going anywhere.
The final mistake that is commonly made by all homebuyers, but especially newbies, is failing to include a mortgage financing contingency clause in the contract. This is a ‘just in case’ clause that will protect you in case something drastic happens, like losing your job and not being able to close your loan, or the appraisal price coming in over the purchase price. This will save you from losing the money you used to secure the property.
You should expect the entire home purchase process to take 6-8 months. Don’t panic if you’d like to move sooner, this includes every aspect of the search and is very practical. It’s wise to start the process slow with some basic research to get a feel of what you want, and it’s likely that most of you are already there. This is the time to figure out what you want regarding the neighborhood, school district, and home features like the yard, kitchen, and storage.
As mentioned earlier, it’s important to get pre-approved before you go any further. A pre-approval is appropriate as much as 6 months out from your envisioned purchase date. As your pre-approval is heavily influenced by your credit score, it’s crucial that you don’t make any large purchases from this point on. The next 2-3 months should be spent with an agent, touring homes. Within the next month or two after this you will be making an offer! Keep in mind that the last stages of the process take more time than you would expect. So, about 1-2 months later, you’ll be signing the papers and taking that picture with the keys in your hand!
Although this timeline is based on industry averages, it’s important to remember that every situation & housing market is different. Some markets are flooded with inventory, some sellers difficult to deal with, and sometimes the mortgage process gets messy.
The only way to be fully prepared for your personal situation is by working with people that you trust and taking it step by step. You are not alone in this process; the Union Home Mortgage team and the Berkshire Hathaway agents are here to guide you through a smooth, exciting, and efficient home buying experience.
Overall, the process is what you make of it; staying open-minded, positive, and patient.