10 Tips for First-Time Homebuyers
1.Be picky, but don’t be unrealistic. There’s a general rule of thumb when it comes to buying a home: two-and-a-half times your annual salary. There are also a number of tools and calculators online that can help you understand how your income, debt, and expenses affect what you can afford. Don’t forget, too, that there are lots of considerations beyond the sticker price, including property taxes, homeowner’s insurance, association fees, energy costs, etc.
2.Do your homework before you start looking. Decide specifically what features you want in a home and which are most important to you.
3.Get your finances in order. Start by getting a full picture of your credit. Obtain copies of your credit report. Make sure the facts are correct, and fix any problems you find and be sure you have enough money to cover your down payment and your closing costs.
4.Don’t wait to get a loan. Find a suitable lender and get pre-approved for a loan BEFORE you start looking. This will put you in a better position to make a serious offer when you do find the right house.
5.Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.
6.Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?
7. Think long term. Obviously, you shouldn’t buy unless you’re sure you’ll be staying put for at least a few years. Beyond that, you should buy in a neighborhood with good schools. Whether you have children or not, this will have an impact on your new home’s resale value down the line. When it comes to the house itself, you should hire your own home inspector, who can point out potential problems that could require costly repairs in the future.
8.Don’t let yourself be “house poor”. If you max yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance or decoration or to save money for other financial goals.
9.Don’t be naïve. Insist on a home inspection and, if possible, get a warranty from the seller to cover defects within one year.
10.Get help. Consider hiring a REALTOR® as a buyer’s representative. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. And often, buyer’s reps are paid out of the seller’s commission payment.