First Time Home Buyers: Tips for Today's Market
Hold on to your wallet though! The paperwork, the finances, the legalities, the homeowner insurance, the adjustments, the whatever else, are all details that need to be squared away before taking the plunge. And that's only if you've actually found that first home you'd like to reside in.
Here are a eight tips from real estate experts on looking for that first home.
1. Get your finances in order.
Before you step foot into a potential home, get your money situation together. That means getting that credit check out of the way, obtaining pre-approval with a mortgage lender, and mapping out a line budget, advises Stribling agent, Cornelia Van Amburg. Before dropping dollars you want to know what you qualify for and can afford in order to avoid bank and heart breaks. Use a mortgage payment calculator to see what your payment might be.
2. Be down with the lingo and the process.
Know the terminology of the real estate market. Learning real estate jargon helps first time home buyers understand the market more efficiently, says Paul Macapagal, vp at The Real Estate Group of NY. You want to be aware of details like what a condo is vs. a co-op; what the prices are per square foot; and what the closing costs are for a property.
"Buyers looking at new developments [may have] closing costs anywhere from 4 to 6 percent of the sales price," says Modern Spaces' Eric Benaim. "In most cases the closing costs cannot be included with the loan amount so it's an extra out of pocket expense."
Due diligence extends to the contract too. "Once buyers find their homes and negotiate their price, they will have anywhere from 5 to 10 business days to review the contract," says Benaim. Definitely review the contract.
3. Find a well-trusted real estate agent.
Take this part of the process really seriously because you're going to be spending a lot of time with your agent. This will ultimately be someone who means a lot to you -- after all they are facilitating the biggest purchase of you life so far.
"[Look for] one that is knowledgeable of how to handle a first time home buyer," says Macapagal. "One that is willing to hold their hand and walk them through every step of the process" is going to make the experience much more pleasant and far less daunting.
4. Create a circle of competence.
There are a lot of professional people involved with the purchase of your new home, so why not have them all part of your team? Macapagal suggess building a scenario where your real estate agent, mortgage broker, and real estate attorney all know each other, to help make the service to the client a seamless endeavor.
The attorney part of the equation is often what can make or break a deal if they don't understand the type of property the purchases is buying. That's why it's important to make sure you work with an attorney who specializes in real estate as well as the area the home is located in. "Sometimes new buyers like to work with an attorney who is a family friend, or, a relative which is fine, as long as the attorney understands the kind of home they're buying," says Benaim.
5. Always think about resale value.
Nothing is forever so you want to make sure you've got the neighborhood amenities and accessories that make your home a hotspot for the next potential buyers. A good school district is a reflection of the quality of a neighborhood. Amenities such as parks, swimming pools, good quality and accessible shopping centers, as well as proximity to transportation are valuable features to look for, says Van Amburg.
Teri Karush Rogers of BrickUnderground.com finds that, "One of the most common mistakes
6. Don't underestimate the cost of maintaining a home.
So much for the good deal on the home if it costs a fortune to maintain. The time spent on maintaining your home on it's own can be staggering to those used to renting. "Yard care, roof repair and eventual replacement, winter time heating costs, and acts of nature like falling tree limbs and floods from burst pipes can come as a big surprise to house-poor budgets," says Rogers.
Those buying apartments should consider that smaller buildings such a townhouse co-ops or walk-ups will have a lower maintenance fees, says Van Amburg. "Likewise, large buildings will offer many services and have a reasonable monthly charge because there are many owners sharing the costs."
7. Cross check everything.
Research the selling prices of comparable homes in your area. Web sites like Zillow and Homegain offer a general idea of prices. Be sure to search actual MLS listings in your area using sites like the National Association of Realtors.
8. Allow a little dreaming into the equation.
It's not a bad idea to create a wish list for listing some on-paper guidlines. "Tailor it as you become more educated on the market inventory," says Van Amburg. "If you are organized, educated and ready with your finances, be prepared to move quickly when you find your dream home."
These AOL Real Estateguides can help, no matter whether you choose to buy or sell:
- First-Time Homebuyer's Guide
- How to Shop for Your First Home
- How to Price a Home to Sell Fast
- How to Get a Low Mortgage Rate