Buying a home is one of the biggest financial decisions a person can make. As a first time home buyer, there are so many things to take into consideration. For example: Ask yourself “why do I want to buy a home?” If your answer sounds anything like “well, it’s a buyer’s market”, or “everybody is buying a home” (they’re not), then you may want to reassess. Now, don’t get me wrong; IF you are 100% ready to purchase your first home, then yes, making the move in a buyer’s market is a great way to get the best bang for your buck. However, the task of being a first time home buyer can be daunting.
What steps can we take to ensure that we enter into this new life chapter prepared, educated, and financially certain?
First, as I like to say, check yourself before you wreck yourself. Really dig deep and ask yourself “is it really time for me to buy a home?” While the thought of throwing easily over 10k a year toward something that you see no return on your investment (renting) is enough to make your stomach turn, sometimes it can be the best temporary option. From a life lesson standpoint, it prepares you for the real world of living alone. Did you know that baseboards don’t clean themselves? Did you know that dust collects on top of the toilet paper roll holder? Unfortunately, unless you have a helicopter mom, there is no dust fairy that magically cleans all of the nooks and crannies for you. Keeping up with your own home goes way beyond vacuuming, doing dishes, and taking out the trash. Did you know that most stoves LIFT UP at the top, for you to clean under them?? Yeah my….friend…didn’t know. *Points to self*
All of those points are miniscule, however, when you consider the upkeep that comes with actually owning a home. When you move out of your childhood home and become a renter, you are still only really responsible for keeping the place clean. If something breaks, in most cases you just call up your landlord. As a homeowner it is your sole responsibility to either tend to these issues yourself, or call up a professional. My advice to you is to do your research. Do not settle for anything less than a licensed contractor. Ask your friends, neighbors, etc. Over time, you will be able to have a list of reliable contractors at your fingertips, and fixes should be mostly hassle free.
Now, let’s cut to the chase. Can you actually afford a home? If so, what is your budget? What do you need to factor in when you are crunching numbers? How much of a down payment do you need? Familiarize yourself with the word “mortgage” because that is going to be your new +1 for the next 20-30 some odd years. Aside from having an income that allows you to make your mortgage payments, pay all of your other bills, and have some extra, the next most important thing is your credit score. I wish eighteen-year-old me had considered the fact that twenty-six-year old me would want to buy a house one day. With hard work, education, and discipline, I have finally worked my credit score up to a number I can be proud of. However, if I could go back and make better financial decisions in my young adult life, I would have put down the charge card because darn it, my dog didn’t need to be a skunk, skeleton, and noble steed for the same Halloween, and my college “freshman fifteen” would nix all of the clothes that I added to the bill.
Exhibit A: Noble Steed ———->
Numbers are so important. Buying your first home should be an enjoyable experience, which is why it is imperative to talk with a good lender. Lenders can really break down your cash flow, incoming and outgoing, and see what price point will be comfortable for you. A lender will be able to direct you toward the right type of loan. After you get the go ahead from your lender, I highly advise you to seek and interview a solid Realtor. Did you know that as a buyer, a Realtor is completely free to you? Take that bit of knowledge and run with it, because who wouldn’t want a professional on their side? These people mean business. Realtors are such an awesome tool to have, because they know the answers to the questions you are bound to come up with. Check out these helpful articles, which will give you a breakdown of how to save for a down payment, how much you’ll need to put down, and the tools to get approved for a mortgage.
Once you have covered all of your financial bases and found the right realtor, the fun begins. What are you looking for in your new home? What are you planning for the next five years of your life? What is important to you? Do you want to be close to work? Will you be considering school districts for your young children? What type of neighborhood fits your desires? A good agent will help you determine the difference between your wants and your needs, when searching for your perfect home. Wants are things that can be added or changed once you become a homeowner. One road block that many first time home buyers seem to hit is that they will stray away from purchasing a good home, due to small preferences such as flooring, or the fact that a home doesn’t have a covered patio. These are not needs, so it is important to keep the mindset of what is a need, especially based on your budget.
Now that you have found the perfect (or potentially perfect with some love) home for you, it’s time to seal the deal! Yet again, I stress to you, a good realtor is key. It is so important to have a professional representing you in your offer, and ultimately, at the closing table. In a perfect world, you fall in love with a house, and you dream of making it a home. You can picture how you would decorate, what paint colors you would choose, etc., you put in an offer, and it is accepted! Now, this is not uncommon, but it is also not always the case. If a home is perfect for you, in your price range, and exactly what you want, chances are, you’re not the only one who feels this way. You may find yourself in a situation where someone else has put in a higher offer. Do not get discouraged, as you will be given the opportunity to adjust your offer. This is where your realtor can help you make the best moves, to ensure you stand out in the crowd.
How can you make your offer more appealing? There are a few ways. First, reassess any special contingencies you have attached to your offer. Another option is to up your earnest money. Earnest money is the deposit that you are willing to put down on the home. This is why it is so important to have a financial plan early in the game, and this will show the sellers that you are serious. As I mentioned earlier, getting pre-approved by a good lender is KEY. Sometimes a seller may accept a slightly lower offer because the competition has been approved for a loan that is more financially advantageous to the seller. I cannot stress to you enough the importance of having a solid lender and realtor. This is their profession. They will bend over backward to get you in the home that fits your needs, and for the best price possible.
As you can see, there is a lot to being a first time home buyer. Prepping to buy should start months, if not years before you decide to dive in, when you consider your down payment and credit score. Some key notes to take from the information I have given you are: shop for the best lender, interview multiple realtors, and pick one that best represents you. Get ahead of your finances. Be sure to understand every step of the home buying process. Know how to differentiate your wants from your needs, when it comes to finding the perfect home. Make sure you have a solid group of professional contractors in your sphere of contacts. Be as educated, and as knowledgeable as you can be. Learn about the surroundings of your potential home. These are all important things to consider, but most of all, enjoy your experience! You have made it over the threshold, and you are ready to become a home owner! Congratulations! You rock! The world is your oyster, so go, go pick out paint colors; throw those paint chip samples up in the air and dance around like nobody at the home improvement store is watching! (Just be polite, and pick them up, because if you’re buying a home, chances are, you’ll be in there a lot more often). Walk the light fixture aisle, all bright eyed. Run through the tile section, guns a blazin’. Touch the granite display counter tops! Smell the air vent purifiers! Turn your nose up to the outdated linoleum flooring options, and make your home exactly what you’ve been dreaming of!
Written By: Ashton McKee (Property By Ford)
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