Important Lessons for the First-time Homebuyer
It is no secret that the home buying process can be nerve-wracking and full of potential pitfalls, especially for the real estate novice. Before beginning your search, take the time to review the following tips so that you can avoid some of the most common missteps made by first-time buyers.
Decide Between “Must Have” and “Nice to Have”:
It is important to understand from the outset that your home search will inevitably involve compromise. No home will have exact mix of location, size, and features that you envision. You should prioritise your wish list according to the things that are critical, those that would be a bonus, and those that you would be willing to sacrifice. For example, if living close to downtown hot spots is important to you, there is a good chance you will have to sacrifice a little space to stay within budget.
Be Willing to Invest Sweat Equity:
The majority of first-time buyers say that they want a home that is move in ready. They often compare homes within their budget to their parents’ homes without taking into consideration the fact that their parents have probably moved several rungs up the property ladder from their starter home. With a little time, skill, and patience, it is possible to turn a fixer-upper into something beautiful for tens of thousands less than it would take to get the same features in a move-in-ready home.
Consider the School District:
Even if you do not currently have children or plan on having children, it does pay to take the quality of the school district into consideration when purchasing a property. Homes in prime school districts have higher property and resale values.
Calculate the Full Cost of Ownership:
Before taking the plunge into the housing market, be sure you are financially ready to make the commitment. In addition to your mortgage payment, you should remember to include property taxes, insurance, and homeowner association fees. You will also want to have money set aside for renovations and unexpected repairs. The personal cost of home ownership is also an important consideration. For example, if purchasing a home will be such a stretch that you will need to take on a second job or make other sacrifices, you may want to postpone the purchase until you can save more money.
Have a Smart Bidding Strategy:
Every home buyer wants a good deal. Unfortunately, this desire for the deal of lifetime leads many novice home buyers to make lowball offers or to ask for unreasonable concessions from the sellers. Your REALTOR® is a valuable source of information on whether or not a property’s asking price is fair market value based on its current condition, location, and other factors. If you are going to submit an offer well below asking price, it is important to be able to justify the difference to keep your offer from appearing weak. If you are asking the seller for concessions, such as contributing to closing costs, you will be in a stronger position if you submit an offer as close to the asking price as possible.
Finally, do not feel that you have to rush. If the timing or a particular house does not feel right, simply bide your time and continue to save. Rest assured that the right house will eventually come along.