Home buyer tips should be the starting place for anyone looking to purchase real estate for the first time. Get the facts and options available to you and use them to your advantage. Buying a home is big deal! It is one of the biggest investment decisions we make in life. Naturally, this creates a mix of emotions such as excitement, anxiety and anticipation. While not all stress can be prevented, educating yourself on the process will give you the insight to make your purchase with confidence.
Do the research and only follow the information as it applies to you. Let these tips for 1st time homebuyers be the guide to finding your dream home!
You’ve decided you want to own a home, now what?
When you make the decision to start your first home purchasing endeavor; chances are you will receive advice from a number of family and friends, many of them having gone through the process themselves. Tips for first time home buyers are plentiful from various sources. It is very important to keep in mind some of the advice might be coming from sources that have only purchased a home once or twice in their lives. This makes them familiar to the process, not an expert in real estate.
Always rely on the pros for the hard decisions and market information. It takes a team to purchase a home. Your Realtor, Mortgage Broker and title or Escrow Officer comprise your buying team! These professionals know the ins and outs of the industry and will be with you every step of the way. While family and friends might have good intentions, do what makes sense for you.
What features in a house makes it home?
Have a general idea of what type of home you are looking for. There are different markets depending on what your needs are. Are you looking for a high rise condominium, a suburban home with room to grow or a 10 bedroom mansion? Take the time to think about what your needs and wants are. The basic factors to decide are neighborhood, size and the number of bedrooms and bathrooms. Consider what is most important to you- a garage to work on your car, a play room for the kids or maybe a space for your craft supplies.
A big question for my buyers in the Dallas/Ft. Worth area is “How do you feel about living in an HOA Community?” A Home Owners Association can protect your property values and they sometimes have amenities like a community pool, gym or parks. However, there are yearly fees to live in one of these communities. For more information about HOAs, please visit Neighborhood Link.
By prioritizing your needs and wants you can easily recognize them when you find them. While, it is unlikely to find a home that has it all, prioritizing your desires might mean you are happier with your purchase because it meets your preferences.
Another one of the biggest steps toward buying a home is getting your finances in order. It is hard to really start shopping without knowing how much money you can spend. Get with a lender and find out what your maximum loan amount will be and then consider how you want to use that money. It is important to note that getting pre-approved and being pre-qualified over the phone are very different.
Majority of Realtors and sellers, especially in the DFW area, will not consider an offer without seeing a pre-approval or proof of funds (if paying cash). This could cost you the home you had your eyes on because pre-approvals take time, sometimes even days, giving other buyers a chance to put a complete offer in first.
Being pre-approved will put your mind at ease too. Perhaps you get pre-approved for $200,000 when you had $300,000 in mind. You might also be surprised and qualify for more than expected. Another important detail is the additional costs of buying a home. Taxes, insurance, inspections and other needed household items can add up fast! Keep these other expenses in mind when deciding how much money you want to spend.
Hire a Realtor and Start Looking
My biggest tip for any home buyer is to hire an exceptional real estate agent! The Realtors sole purpose is to use their market knowledge and negotiating skills to guide you and help you locate your ideal home in a sea of possibilities. Realtors live in the MLS and having one working for you means you will get inventory updates sooner and could have the first chance at a home not yet on the public market. Choosing your Realtor is a very important decision as an inexperienced or unmotivated Realtor could mean a poorly negotiated contract or having to wait days to view that home that was just listed. The best real estate agents are not worried about where the next sale is coming from. A stumbling agent that needs a sale will give you different advice than one that doesn’t.
If you need help finding a realtor please contact me, I have several referrals for Realtors outside the DFW and in other states.
Make the Right Offer
Think this house could be the one? This is where your Realtor really starts showing their merits! Make sure you and most importantly, your real estate agent, understand local market values. Negotiation is a fine tuned art and not something that can be learned in a day or learned as you go. A savvy Realtor will be able to identify any number of items that can give you an edge in the negotiation process. This could be anything from pet damage to defective appliances.
The negotiation process can either be simple or stressful depending on your Realtor. The best of best will be looking out for your best interests and will ensure you are getting fair market value or less for the home that you are interested in. If you get the feeling that your agent is more concerned about their pocket book than yours, drop them fast!
Consult the Home Inspector
Now that the seller has accepted your offer, it’s time to give the inspector a call. Hire a reputable inspector. Many Realtors have inspectors that they can recommend or give references for. The inspector will look over the entire property, taking note of any faulty or defective structural aspects or appliances as well as anything else out of the ordinary that you need to be aware of. At this time your Realtor should double check with your lender as some loans require additional inspections. For example, VA loans require a separate termite inspection.
Do not let emotions blind you to what the inspection report says. Even if you are madly in love with a home, serious issues such as foundation or leaks under the slab (foundation) can quickly ruin the enjoyment you would get out of your new home. If there are problems that are not deal breakers, your Realtor will advise you the best way to move forward with further negotiations. This could mean requesting the seller to make repairs or lowering the price.
At closing you will sign loan papers and title docments. Remeber that you have the right to understand 100% what you are signing. Ask questions until you feel comfortable. The home becomes yours as soon as the purchase has funded. In the DFW market you can expect to close on your home and take ownership within 30-45 days if financing a mortgage. Cash buyers can close as quickly as two weeks. There are other variables that might affect your closing day, any special circumstances will be added to your contract by your Realtor. In the days leading up to closing day, your Realtor will coordinate with your buying team to make sure all the necessary documents are ready and that your loan (if financing) has gone through underwriting and has final approval.
Every closing is different and your financing situation will dicate what you need to bring with you. You will be asked to bring a state-issued photo identification and certified or cashiers checks (or scheduled wire transfer) for any payments that will be due.
Congratulations you’re a New Home Owner!
Once you leave the closing table and get settled in, it might feel like the work is over. Actually, your duties of being a responsible home owner have just started! Owning the home means that instead of the landlord covering your repairs, it is now your responsibility. Home maintenance can be costly, so it is a smart idea to start a repair/maintenance fund immediately. Hopefully you had an all-star Realtor who secured a home warranty for your first year. Every home warranty company is different but they cover a wide varitey of home malfunctions and can save you thousands of dollars! A well cared for home can last lifetimes, but by ignoring proper care you could find yourself losing your investment and living quarters.
As a side note to Texas home owners, foundation issues are a big problem here and repairing them is often quite expensive. In order to protect your resale value and wallet, water your foundation for about 15 minutes once or twice a week depending on any applicable watering restrictions. Watering the foundation can help prevent shrinking soil. For more information on foundation including the repair process please visit Cornerstone Foundation Repair.
Stay on top of your home insurance and make sure the insured amount will cover your losses in the tragic event of a fire. I hope this guide will help you make confident decisions for a smooth and enjoyable home buying experience!