Buying a home for the first time is confusing for most. Don’t be offended by the title, you are not a dummy!
Many first time home buyers don’t have a clue where to start or what they should be thinking about when buying their first home.
I work with many first time home buyers and I know the importance of explaining the home buying process to them as well as the importance of educating them on certain aspects of buying a home.
If you ask a dozen people who have never purchased a home what they should do first, they would look at you like a deer in headlights. You know that blank stare I’m referring to, right?
Below are some of the most important tips, steps, and advice for buying your first home. First time home buyers who understand the process and know what to expect significantly improve the chances they will have an enjoyable and successful experience!
Understand Mortgages
The majority of first time buyers will be getting some sort of financing for their home purchase. I don’t know many first time buyers who have hundreds of thousands of dollars to buy their first home with.
It’s very important when buying your first home you understand mortgages, what the mortgage process is, and also what it costs to buy a home. There are tons of mortgage products available for buyers. In addition to the numerous mortgage products, there are also many first time home buyer programs and grants.
The first step, before you begin shopping for homes is to discuss your options with a top notch mortgage lender. This is a great way to understand what mortgage product is best for you as well as to learn about the mortgage process. Once you know all about mortgages, the home buying process moving forward will be much smoother!
Interview and Hire A Top Realtor®
It’s obviously extremely important to hire a top Realtor® when selling a home because real estate marketing is extremely important. Many buyers don’t take hiring a top Realtor® serious enough though!
A top real estate agent who has experience working with first time home buyers will know the importance of explaining everything in extreme detail. Hiring a top agent when buying your first home can make all the difference between an enjoyable home buying experience or a miserable one!
Learn About Real Estate Contracts & Contingencies
Now I realize you’re not an attorney and you don’t need to know the wording in a real estate contract verbatim. When buying your first home you should however understand real estate contracts and also contract contingencies.
A purchase and sale contract is in place to protect all parties. It’s important that when buying your first home you at least understand the major points of a contract. A top Realtor® should explain the contract so that you understand what you’re submitting to a home seller.
One of the most important parts of a real estate contract is the contingencies section. There are many contingencies that home buyers should include in a purchase offer. Some of the most popular real estate contingencies that first time buyers should include in their purchase offer (or strongly consider including) are home inspection contingency, attorney approval contingency, and mortgage approval contingencies.
Contract contingencies are placed in a purchase offer to protect a buyer. It’s very important when buying your first home you understand which contingencies you can include!
Have Realistic Expectations
One of the biggest mistakes made by first time home buyers is they set unrealistic expectations. Whether it’s because a buyer thinks what they’ve been pre-approved for can buy them a mansion or because they think they can offer a homeowner $20,000 less than market value, it’s important to have realistic expectations when buying your first home.
When purchasing your first home it’s important to set realistic expectations in terms of the size of a home you can buy, the condition, the upgrades, the location, and many other things. A top real estate agent will be able to help you determine what is realistic and what is not.
Don’t Make Any Silly Moves Along The Way
Too often do first time home buyers make silly moves during the home buying process. Have you ever heard of a friend who was denied for their mortgage after they begun the process? Well believe it or not, some buyers make silly decisions after they’ve begun the home buying process.
For example, a buyer who gets approved for a mortgage who goes out and buys a nice shiny new car could potentially be costing themselves their new home. Adding additional debts is one of the most common reasons why buyers are denied for their mortgage.
Once you’ve been pre-approved to buy your first home, don’t make any silly decisions, period! If you’re unsure how something may impact your home purchase, ask your real estate agent or mortgage consultant!
Research, Research, Research!
With any major purchase that I make I do a ton of research, in fact, probably too much! Since buying a home is one of the biggest purchases you will make in your lifetime, doesn’t it make complete sense to do a ton of research?
For example, if you were thinking about making an expensive home improvement to your home, wouldn’t you want to know how do home improvement projects impact home values? Yes, you should absolutely want to know this information!
When buying your first home it’s highly recommended to do a ton of research. With the internet it is extremely easy to find quality information relating to home buying!
If you were wondering if you should have a home inspection when buying a home, do a simple a Google search with your question. There should be tons of resources that provide information about the PROS and CONS of having a home inspection. By completing this research it should help you be able to determine if you should or not. This is only one example of why researching a ton makes a lot of sense!
The Bottom Line
Buying your first home can definitely be difficult and confusing but with the proper steps, it doesn’t have to be! It’s extremely important when buying your first home you understand the process and are comfortable with the major decision you’re about to make.
The above guide is a great start to educating yourself on the purchase of your first home. I always stress to first time home buyers that no question is a dumb question.
