A Quick Go-To Guide for First-Time Home Buyers!
Owning a home is the American dream. It’s also the largest investment most of us will ever make, so go into it knowing what is and isn’t required.
- House Hunting
Before you begin house shopping, you will need to have an idea of what kind of neighborhood you want to live in and the style of the home you want. Look past the junk and see the potential! Remember buying a home is not just a place of residence, it’s also an investment! The best place to invest in is an up-and-coming neighborhood! (Keep in mind your dollars down the road). Real Estate can be fast paced so if you’re trying to buy a hot property you have to move quickly or you may possibly lose it!
The ugly truth is that financing can be very tricky! It’s always best to have your financing in place BEFORE going to view properties. You could end up missing out on the home of your dreams while waiting to secure the financing. Typically you should be able to afford a mortgage that is 3Xs your income! Another really important reminder is to SET ASIDE MONEY FOR CLOSING COSTS!! Don’t forget to include this in your budget! It typically can take anywhere from 1-1/2 to 5 percent of the home’s PURCHASE PRICE. Often times, many of the fees that make up closing costs are negotiable, and some are completely unnecessary, especially things such as high administrative fees and mailing or courier costs charged by your lender. Remember that you can shop around and you may be able to find other lenders who are willing to offer you a loan with lower fees at closing!
- Making An Offer
When you’re house shopping, be informed and know what’s going on in the surrounding area. Find out what other homes in the area have sold for, how long ago the sale was and what amenities they have. Sometimes it makes more sense to look at the price of the home in terms of monthly payments instead of focusing on that big number and when making an offer, you want to go as low as possible without insulting the sellers. The three most important matters when it comes to negotiation are information, preparation and realism.
- Home Improvement And Resale
A simple renovation after the sale can boost the value of the investment by thousands. Curb appeal goes a LONG way!!!! But you also want to make sure you don’t over improve for the area. Some houses have a cap on them, which means it is only gonna be worth a certain amount no matter what improvements the homeowner’s make! When a house is empty, buyers can see the actual size of each room and can better visualize their things in them, but on the flip side, home staging is BIG BUSINESS. It can add thousands of dollars to the selling price. An un-staged house that HAS NOT been properly prepared for sale will sell for much less than the asking price.
So my fellow beycomers, when you’re a first time home buyer, be prepared, get informed and keep an open mind! Continue saving $$ because sometimes with home-ownership comes major unexpected expenses! Keep an emergency fund for the unexpected! Perform regular maintenance on the home doing this will help decrease your repair costs! IGNORE THE HOUSING MARKET, it doesn’t matter what your home is worth except the moment when you sell it! And last but not least, don’t RELY on making a killing on your home to fund retirement! If you want to look at your home as a source of wealth in retirement, consider that once you’ve paid off your mortgage, the money that you were spending on monthly payments can be used to fund some of your living and medical expenses in retirement.