I promise to do whatever it takes to find the right home for you. My extensive Real Estate knowledge and experience, along with my knowledge of the houses in my area, can assist you in finding the home you've been searching for. Here are some handy house-hunting tips.
Tips for First Time Home Buyers
Buying a home can be a long, complicated and frightening process, and it is important to be prepared. Knowledge is power when it comes to negotiating the difficult world of home prices, interest rates and mortgage loans. For a first time home buyer, there are many factors to consider before you buy. The more information you can gather before you start shopping, the better off you will be.
Look Beyond the Price
When it comes to securing a quality mortgage loan, it is important to look beyond the interest rate to the true cost of the loan, both now and in the future. Read the paperwork, including the fine print, carefully, especially if the interest rate is below market rates. Upon closer inspection, you may find that the interest rate is guaranteed for only a short period of time, or that it is subject to rising sharply in the future. Your mortgage loan may be the most important contract you will ever sign, and it is essential that you understand your rights and your responsibilities before signing on the dotted line.
In many cases, it will make sense to hire a lawyer to review the mortgage paperwork for you. Many communities provide some sort of first-time homebuyer program designed to help renters become homeowners, and these organizations may be able to provide the legal advice you need at a price you can afford.
Every Situation is Unique
Every homebuyer will have a different set of circumstances, and it is important for the lender to consider those factors. Some homeowners may plan to move in a year or two, and they may be able to benefit from a variable rate mortgage. Others will plan to remain in their homes for decades, and those home buyers may benefit from the stability of a fixed-rate mortgage and its predictable and stable monthly payment.
It is also important for those buying a first home to factor in the additional costs of the mortgage when deciding how much they can afford to pay. Things like closing costs and the high price of private mortgage insurance can drive up costs and eat into funds that would otherwise be available for home improvements, furnishings, and other essentials. In some cases, sellers may be willing to pay some of the closing costs, and some lenders will be able to negotiate those closing costs downward. The key is to ask those questions before the closing date arrives and to be prepared to search for a better deal if necessary.
First-time buyers should also be on the lookout for any hidden fees. These small nuisance fees can add up to hundreds of dollars on closing day, so be sure to scour your paperwork for any such fees. If you are unsure about the legitimacy of any charge be sure to ask for a valid explanation. Again, an experienced real estate attorney can provide valuable insight into which fees are reasonable and which are out of bounds.
And of course, first time home buyers should not lose sight of the home itself in the quest for the perfect mortgage. Any defects should be pointed out to the seller well before the closing is to take place. The costs of every needed repair should be carefully negotiated prior to the purchase, and buyers should always follow up to make sure that all requested repairs have been made. A home is a major purchase, and it is important to make sure that everything has been taken care of before moving in.
Buying a home? These eight tips can help make your house-hunting experience positive and rewarding.
- Location counts. You've probably heard the old real estate joke about "location, location, location," but the point still bears repeating. Location is crucial. How far are you really willing to commute to your place of employment? How good are the local schools, shopping centers, public transportation, seniors services, and other public amenities? Will your new home be next to a vacant lot or a commercial property? Even a picture-perfect dream home can be a mistake if it's in an undesirable location, and a poor-location home can be a particularly bad choice if you anticipate reselling the home within a few years.
- Make a list. Do you (and your spouse, if you're married) really know what you need and want in your home? You'll save yourself many hours of shopping (and potentially arguing) if you make a list ahead of time. Zero in on the features you must have, would like to have, definitely don't want and would prefer not to have. Your goal is to find the right home for your family without falling in love with one that doesn't suit your needs. Tip: Start compiling your wish list by thinking about what you like and dislike about your current home.
- Do your homework. Not long ago, consumers had very little access to information about recent home sales prices, market trends, homes on the market, neighborhood statistics and the home-buying process. Today, all this information and more is available on the Web. Go surfing. Get educated. Become empowered.
- Get preapproved for a mortgage. Your top-dollar home price is a function of your household income, your creditworthiness, interest rates, the type of loan you select and how much ready cash you have for the down payment and closing costs, among other factors. Rather than guessing or estimating how much you can afford to spend, ask a lender or mortgage broker to give you a full assessment and a letter stating how much you're qualified to borrow. The true amount may be much more or much less than you think.
- Use a checklist. Touring multiple homes is a confusing experience for most people. Rather than relying on memory, make notes about the homes you visit. Turn your priorities into a personalized home-shopping checklist and use it to track the features of each home.
- Wear comfortable clothing and sturdy shoes. House-hunting can be tiring, especially if you're relocating to a distant community and want to see a dozen homes in one day. There's no sense in torturing your feet unnecessarily.
- Be prepared to make an offer. House-hunting can also be frustrating, especially if you know in your heart you're not really emotionally or financially ready to buy a home. If you're not ready, don't put yourself through the exercise. If you are ready, go through a blank purchase contract ahead of time so you'll know what decisions you'll face when you make an offer.
- Relax. Granted, buying a home is a major life-altering event. But it's not worth making yourself insanely crazy or super-duper stressed. Save time at the end of your house-hunting expedition to unwind, calm your thoughts and emotions and keep the whole experience in perspective.
How to Choose a Home
Here are some tips to help determine which house is best for you.
Once you've settled on a couple of neighborhoods for your search, it's time to pick out a few homes to view. Your wish list can remind you which features are absolute requirements and which amenities you'd like to have if possible. When narrowing down your home search, consider:
- Types of homes
- Home purchase considerations
- Home comparison chart
- What to do when you’ve found the right home for you
Types of homes
In addition to single-family homes (one home per lot), there are other forms of homeownership:
- Multifamily homes: Some buyers, particularly first-timers, start with multiple-family dwellings, so they'll have rental income to help with their costs. Many mortgage plans, including VA and FHA loans, can be used for buildings with up to four units if the buyer intends to occupy one of them.
- Condominiums: With a condo, you own "from the plaster in" just as you would a single house. You also own a certain percentage of the "common elements" -- staircases, sidewalks, roofs and the like. Monthly charges pay your share of taxes and insurance on those elements, as well as repairs and maintenance. A homeowners association administers the development.
- Co-ops: In a few cities, cooperative apartments are common. With those, you purchase shares in a corporation that owns the whole building, and you receive a lease to your own apartment. A board of directors supervises management. Monthly charges include your share of an overall mortgage on the building.
Home purchase considerations
Most buyers' first consideration, after neighborhoods are chosen, is the number of bedrooms. As you begin to view homes, keep the following purchase and resale considerations in mind:
- Weigh your needs, budget and personal tastes in deciding whether you want a home that’s a newly constructed home, an older home or a home that requires some work -- a "fixer-upper."
- One-bedroom condos are more difficult to resell than two-bedroom ones.
- Two-bedroom/one-bath single houses generally have less appeal than houses with three or more bedrooms, and therefore less appreciation potential.
Homes with "curb appeal" (a well-maintained, attractive, and charming view-from-the-street appearance) are the easiest to resell.
- When resale is a possibility, don't buy the most expensive house on the street, or anything that is unusual or unique. The best investment potential is traditionally found in a less expensive, more moderately sized home on the street.