10 Things I Wish I'd Known Before I Bought My First Home
Homebuying should be fun, not frightening.
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Buy With Confidence
We get it: buying a house for the first time is intimidating. Besides determining what it is you want and how much you can pay for it, there’s the task of sifting through listings in hopes of finding your dream home and a seller that’ll pick you from the crowd. The key to making this unpredictable, life-changing search more bearable is preparation. Two recent buyers and an online listing expert have spilled their ten best tips on going into the homebuying process with confidence, weathering the unpredictabilities and coming out of it all with a place to call home.
Know What You Want
The question is simple, but it’ll determine your entire hunt. "Start with a list of everything you want in your dream home," says Nate Johnson, chief marketing officer at realtor.com. Think everything from geography to school zones to house size. "Then be diligent figuring out what you need and what you could go without." Samantha Feld, a recent buyer in Oakland, California, knew she needed a move-in ready house she wouldn’t have to renovate. "Be realistic about your needs," she says, "so you know off the bat which properties are worth pursuing."
Stick to a Budget
Be realistic about what you can afford — a number your bank and buyer's agent can help determine — then stick to that price range throughout your search. "It can be tempting to push up your budget once you start looking at homes," says Valerie Stahl, who recently purchased a house with her husband in Upstate New York. "Be steadfast in the boundaries you’ve set for yourself."
Find the Right Agent
A good buyer's agent will be knowledgeable in neighborhood pricing, what’s available on the market and what’s to come — not to mention responsive to your home-buying queries. Use the web to vet agents and don’t be afraid to ask for referrals, says Johnson. "They will be your guide through the experience, so it should be a good fit," he says. Feld echoes the sentiment: "My agent and I really clicked, and she was good at her job, making the experience less stressful."
Get Your Mortgage in Order
Figure out how you’ll pay for the home — before you find it. All cash? Fixed 15- or 30-year mortgage? If you’re taking out a mortgage, shop for good rates and apply for pre-approval before you even begin the hunt. "Your pre-approval is not a commitment, you can still shop around for rates," Stahl says. But once it’s in place, she says, "you’ll be more prepared to put down an offer... and the faster you move the better."
Know Your Market
Ask your agent about market conditions and what to prepare for. "It’s an extremely hot market and inventory is tight," says Johnson. That means more all-cash offers, bidding wars and overall competition. It also means it’s extremely important to prepare your budget, all paperwork and pre-approval ahead of time. "Then be prepared to move fast," he says.
You Can & Should Negotiate
Not all homes, though, will have a line of people waiting to buy. If a house has been on the market for a while, push the seller and their agent as to the reasons why. And if the seller is eager to unload the property, "don’t be afraid to negotiate," says Stahl. "Base your negotiations off the real value of the home."
Order a Professional Home Inspection
How to determine the real value of a home? An appraisal — an unbiased estimate of the home’s market value — is required during the mortgage process. You should also go the extra step with a professional home inspection. That’s because no detail is too small, from the age of the appliances to the plumbing to when the roof was last replaced. "Open every cabinet, see how everything fits together," Stahl says. "Sometimes families will live with some house quirk you might find frustrating. Ask yourself if you can live with it." Another thing to note: home inspections happen after your offer on the house has been accepted. So be prepared to start your search over if something comes up in the inspection that's an absolute deal-breaker.
Contingencies Are a Thing
Let’s say that after you’ve put in an offer, the home is appraised for lower than what you offered. It might open the door to negotiate with the seller, or you might want to back out of the deal altogether. There are types of contract contingencies that allow the buyer to do so at no risk. Ask your agent about the different types, as they vary from state to state. "In a competitive market, it’s common that buyers will waive contingencies," Feld says. "But contingencies give you the opportunity to back out of the deal if there are any issues."
Go the Extra Mile
It’s intimidating shopping in a competitive market, especially if you can’t provide an all-cash offer. But you shouldn’t be afraid to tug at the emotional heartstrings of a seller — one tip all three sources offered. "Write a letter. it’s an opportunity for a personal connection," Feld says. Feld’s note to the seller about her investment in the community "resonated," she says, and her offer was accepted.
Set Up Property Alerts
Let the internet do some heavy lifting. Once you’ve narrowed down your house criteria, punch the details into an online listing marketplace. "If you set up alerts, the site will tell you when a new property with your criteria hits the market," he says. "You’ll be the first to know it’s available." Tip: If you hire a buyer's agent, he or she should offer access to their listing system and send you daily alerts, ensuring you don't miss out on your dream home. If not, just ask.
Read More: : 23 Things Every First-Time Homebuyer Should Know