Five Considerations for First-Time Buyers
by Cormac Foster
Your first home purchase is exciting, but it can also be stressful. Here are some tips to limit the trauma and help you find the home of your dreams the first time around.
1. Set your budget
The most important step in selecting a home is knowing how much you can spend. If you already use an electronic budgeting system, you’re ahead of the game. If not, track your expenses for the past several months to a year. Try to quantify the “gray areas” of cash withdrawals that disappear on small purchases. Now add up your current rent and other related expenses. If you’ve been saving money toward your down payment, note that, as well. Finally, ask yourself where you can tighten your belt with your existing discretionary purchases. This is the maximum amount you could pay per month.
Now ask yourself if this is reasonable, given your current savings and possible expenses. Only you know the answer to that. When you’ve arrived at a comfortable number, write it down, and save your calculations. You’ll take this to the bank when you apply for loan pre-approval. For now, you have an estimated payment you can use while shopping online.
2. Set your Criteria
A home is the biggest purchase you’ll probably ever make. Stay focused and don’t let emotion guide you. If you have one child and no plans for more, four bedrooms are probably a waste. Write down a list of must-haves, nice-to-haves, and can’t haves before you start visiting homes. You’ll save time, help your agent work more productively, and keep yourself from getting carried away—into the wrong house.
Important criteria include:
- Age of house
- Number of bedrooms and bathrooms
- Size of lot / yard
- School district requirements
- Type of street (Are busy streets OK, or do you want a cul de sac? Do you need to be near a bus or light rail line?)
- Type of home (Single-story? Mutli-level? Are there any dominant architectural styles in your area that you refuse to buy?)
- Central heating and cooling
- Expensive additions, such as in-ground pools
3. Make a list of Homes
After you’ve made this list, search online and find several representative homes. If you have time and you’re fairly local, drive by a few of them to get a feel for the neighborhoods. Write down your impressions. This will help you understand home much of a home’s description is fact versus fluff, and give your real estate agent a good idea of your likes and dislikes.
4. Find a Realtor®
Most home buyers select a licensed Realtor® to represent them, and they are almost always happy they did. Realtors® are real estate agents who subscribe to a strict code of ethics and are acknowledged experts in the field. A Realtor® knows your local market, and can help you through every step of the home buying process, from finding your dream home to negotiating the best possible terms, explaining everything along the way.
5. Bring a Camera
Your Realtor® will take you on a number of open houses, and your opinions can be lost in the blur. To keep things straight, bring a digital camera on your trips. Take a picture of the street nu,ber of each property, then photograph each room during your walk-through. Photograph a house even if you decide it’s wrong for you—there may be furnishings, construction tips, or other features you notice later that could come in handy when you find the right home.
by Cormac Foster