For many people, a new year evokes careful evaluation of the year ahead; resolutions, ambitions, and goals. For some, that goal may be to purchase their first home! If you have never purchased a home it can be overwhelming to know where to start. Some will jump right in and start calling phone numbers on signs, clicking on websites, or popping into open houses. Although, all of those are useful tactics, here’s a few tips on the best first steps of purchasing a home.
The home buying process truly begins by determining if you’re ready. This isn’t just a question about finances either. Are you in a job that you like? Do you see yourself having some job security (or income security)? Do you like the area enough to want to set up some roots for at least the next three-to-five years? Do you have friends, family, and/or community that surrounds and encourages your well-being? Those are some of the intangible qualities to consider. Our sister company, ForRent.com, outlines the home rental landscape and give mores insight on the things to think about when moving.
You should also carefully evaluate your personal finances. Although buying your first home vs renting is statistically less expensive on fixed amounts, homeownership can be more costly when it comes to maintenance and repairs. You’ll want to be careful to not drain all your bank accounts just to get into a home that may require a costly repair within the first several years of ownership. Realistically establishing a home buying budget is an important first step to take. Saving up for a down payment is also key when starting out. You may not need as much of down payment as you’d think. Here’s a helpful article on down payments.
Once you’ve determined that you are ready to buy a home, it’s valuable to employ the help of a professional to guide you through the process. Buying a home nowadays is more complicated than ever and there are individuals who specialize in these transactions day in and day out. And best of all, traditionally the buyer does not pay for a realtor’s services. In order to find a qualified and competent real estate agent, it’s best to ask people whom you trust to recommend a few. A word of mouth referral is likely the best endorsement of someone to consider.
Once you’ve chosen a real estate agent the next step (even before looking at homes) is to get pre-approved. Knowing the price range and the estimated monthly expense that you’re most comfortable with spending is vital to the home buying process. Your desired price range may radically impact the locations and neighborhoods of your search. Again, a referral to a lender/loan officer from a trusted friend is the best starting point. Your realtor can also recommend folks that they’ve had good experiences with. There’s much that could be said about pre-approval and if you’re interested in more tips about the step, check out prequalifying tips when buying a home.
One of the last beginning steps in the home buying process is to scout the potential locations that you are most interested in and within your price range. Driving by during different times of day and different days of the week is helpful in discerning how you feel about various neighborhoods. It may also be beneficial to get out and walk around as much as you can. If there’s a specific house that you see online, a quick drive-by may drastically increase or decrease your interests in that home. Once you’ve narrowed it down to a location and specific homes, the fun begins!
If you’re just beginning to dabble your feet into the pool of buying your first home these are four great steps to getting things started. Determining if you’re ready, finding a qualified realtor, getting preapproved, and scouting out locations/homes, will get the ball rolling. These beginning steps are also super helpful in creating a nice/smooth transaction all the way through. If this is your year to buy your first home or if you know someone considering it, feel free to pass this article along.