5 Things You’ll Wish You Knew Before Buying Your First Home
The home buying process is incredibly daunting. It seems like you have a million tasks on your plate and wonder if you will ever get to the finish line and get those keys. Everyone is giving you advice, but what should you really spend your time worrying about? I asked one of my recent first-time homebuyers what she wishes she knew before she bought her home. Here are the 5 pieces of advice she thought were worth sharing.
Take Your Time With Mortgage Lenders
It’s no easy decision when debating over the many home lender options. First-time home buyers typically do the research themselves or use a loan officer, often referred by their real estate agent. Want to see my list of recommended lenders? Check them out here. Whichever route you decide works best for you, don’t be too hasty. Reading the fine print of every offer you receive is a must.
If you take the time to consider various lenders, ask as many questions about fees and discounts. A major first-time buyer consideration is that of Private Mortgage Insurance (PMI). If your down payment is less than 20% of the home sale price, then there is a very high chance most lenders will require a monthly PMI fee.
Ask about the lender's closing process and how much time they need to close a loan. This can make a big difference when putting in an offer.
Everyone’s situation is unique. There are pros and cons to every loan. I'm not a financial advisor and you should always supplement my advice with a professional.
Budget For Unexpected Costs
This may sound obvious, but plenty of first-time buyers do not fully comprehend the amount of money that is spent before getting the keys to their future homes. Things like inspections, appraisal and deposits, all come into play for upfront cost before you even purchase your home.
Also budgeting for utility costs (electricity, water, gas, tv, internet, garbage, lawn care, etc) and yearly maintenance (termite contract, HVAC cleaning) comes into play after you have purchased your home.
While it’s essential to determine your future mortgage allowances, it is equally imperative to save an emergency fund. Things break in homes so having an emergency fund for these things will make homeownership a lot smoother.
Also, if your current living situation does not allow a month to month lease agreement or you find the home you can’t live without prior to your planned moving timeline, you will need a financial buffer. More often than not, buyers find themselves stuck between their current living expenses and those of their new mortgage agreement. Moving costs and the possible use of a storage facility can become very costly even over a relatively short period.
For direction on how much to set aside for these extra costs, speak with an experienced local real estate agent.
There Is No Such Thing As The “Perfect Home”
According to real estate mogul Barbara Corcoran, “Buyers decide in the first eight seconds of seeing a home if they’re interested in buying it.” While following your gut is important, too often new buyers tend to make rash judgments. Before starting your home search, brainstorm a very detailed list of deal breakers. Is having a large yard a must? Are you only interested in homes with updated interior features? Do you require a minimum of 4 bedrooms and 2 bathrooms? Now narrow that list of must-haves down to the most important 3-4 features. This may take some serious flexibility. If you have the time and freedom to look at every available option, do it. We know this sounds daunting, but your earlier expectations may change during the house hunt. Sometimes it’s tough to find the home that has everything you ever dreamed of -- in the ideal price point -- in the perfect area of town.
It might be impossible to find a home that checks off all of the boxes upfront. But as time goes on, you can check the rest of the boxes off.
Always Consider Return On Investment
It’s relatively easy to factor which type of home and location suits your current lifestyle needs. A townhouse or a condo may offer a cheaper mortgage upfront… it might even within walking distance to your favorite coffee shop or gym! While these are all things to consider, do not lose sight of the long-term investment. If and when you decide to rent or sell your first home, it is extremely valuable to consider your future buyer. One key factor to consider is the area’s school district. Would your home be attractive to a family? If the answer is yes, there is a good chance you’ll have a more successful selling experience when the time comes.
Pay Close Attention To The Home Inspection
Once you’ve chosen the home you want to make an offer on, and the seller has agreed to terms, you will need to hire a licensed home inspector (or sometimes multiple home inspectors) to evaluate the home's condition. Keep this in mind: no home, no matter the age, is in perfect condition.
A good inspector will point out all the issues about the four main inspection points: HVAC, electrical wiring/panels, plumbing, and roofing. These four areas of concern will directly affect your home insurance coverage and more costly short and long-term repairs. The status of the inspection report will also play a role in the negotiation process between the buyer and seller. An experienced realtor will know exactly how to advise your next steps. out
Check out my post all about inspections in detail HERE
While not every scenario is highlighted here I am happy to answer any questions you have during your home buying experience. I even have a well-rounded list of vendors if you are in need of a referral.
Now it's your turn. Have you bought a home before and there's something you wish you knew ahead of time that I didn't talk about here? Send me an email to [email protected] so I can add to the list!
We're happy to answer any questions you still have, or if you need our list of trusted vendors for a referral!
Find a home that checks (most) of your boxes.