Let’s say one morning you wake up and realize that, yes, buying a home is the right thing to do for yourself.. You’re tired of throwing away money on rent and figure that it’s time to get into a home of your own. But you have reservations.
After all, if it’s your first time, you’ve got questions. You might be a little nervous that you’ll mess up, and it’s normal to feel that way. You are probably spending hundreds of thousands of dollars and making the most important financial purchase of your life.
You will find that being an informed individual about the home buying process is empowering for you. Lucky for you that you came to the right place. So let’s get started buying your first home!
Consider if Buying a Home is For You
Many people harbor secret fears about buying a home, and some of those fears are justified. Not everybody is cut out to own a home, and if you’re one of those people, it’s better to find this out now than when you’re under contract.
- You might decide that renting is better for you than buying, because buying a home has its drawbacks.
- On the other side of the coin, there are many more benefits to buying. Keep these reasons in mind if you start to get cold feet.
- Those buying with a partner or significant other before tying the knot, need to know how to handle the financial details of home ownership without plans to ever marry.
Before Buying a Home, Get Your Finances In Order
Line up your financing, set aside a down payment and study the loan programs available. By doing your homework, you will know exactly how much you can pay and what it will cost you.
- Order a Free Credit Report (through me)
Give yourself time to clean up a credit report that contains mistakes. Dispute errors. Try to reduce your monthly debt obligations now by paying down those loan balances.
- Don’t Over Shop
Check out places to get a mortgage and compare rates and fees. Stick to no more than 3 quotes. Keep in mind that rates change every day and service is just as important as rates and fees.
- Determine a Down Payment.
The more you put down, the lower your monthly mortgage payment.
- FHA. FHA loans carry competitive interest rates, come with minimum down payment requirements and allow sellers to pay some or all of your closing costs.
- Get a Pre – Approval Letter.
Showing the seller you are already pre – approved for a loan gives you an edge during offer negotiation.
Pick a Real Estate Agent to Help With Buying a Home
With so much information available online, you might wonder why you need an agent at all. But all local markets vary from one another, and a good agent can guide you by giving you information based on experience and market knowledge.
- An agent with experience can help you to avoid making mistakes such as choosing the wrong home or offering too much.
- Start by asking your friends and family member for referrals. Make sure you are comfortable with your agent before committing to work with that person.
Learn How to Avoid Home Buying Mistakes
The best way to avoid making a mistake it to learn from the mistakes others have made. Buying a home in a desirable location is your best defense. Remember: location, location, location.
- Start your search online, and don’t rely on print because most homes are not advertised in the newspaper.
- Ask your agent to look at homes before showing them to you, and tour only those that fit your parameters.
- Protect your earnest money deposit by writing contingencies into your contract.
Make an Offer and Negotiate Like a Pro
Although buying a home is not like buying a car, for example, you can still negotiate to get a good price.
- Price isn’t the only consideration. Sellers often accept lower-priced offers for other considerations.
- If you really love the home, chances are another buyer will want it as well. Be smart. Don’t overpay.
- It’s common for sellers and buyers to negotiate back and forth through counter offers.
Get a Home Inspection and Read Disclosures
Never buy a home without getting a home inspection. Most states have laws about the types of disclosures you are entitled to receive.
- Go through this list and make sure your home inspector doesn’t miss anything crucial.
- Besides disclosing lead-based paint, which any home built before 1978 can contain, sellers should notify you of major defects.
- Always do a final inspection a few days before closing to make sure the property is in the same condition as when you agreed to buy it.
Closing on Your Home
Transactions generally close within 30 to 60 days after your offer has been accepted. Remember to reserve movers or a moving truck early because many people move at the end of the month.
- Shop for insurance rates carefully. Often, the company that insures your automobiles may offer you the best policy rates.
- You might think you don’t need a title policy, but it’s the cheapest form of insurance you can buy, and you pay the premium only once.