10 Tips for First Time Home Buyers
Purchasing a home can be somewhat difficult for a first-time homebuyer. Ultimately, there are so many tasks, requirements, and steps to take which might leave you anxious not to make expensive mistakes. However, understanding the processes involved will help fist time buyers to get the most out of their purchase. Below are tips to make buying a home easy for a first-time homebuyer.
1. Understand your credit and get preapproved
Pay attention to your credit and understand it. Lenders look beyond just your credit score when assessing your mortgage application, they also evaluate your credit report to estimate your balances, habits, and general financial situation.
A preapproval letter is provided by a lender to indicate that you have been granted a certain amount as the mortgage. A seller believes that you are a serious buyer when they see a preapproval letter in your offers. It indicates that you can truly afford the home. This will help your cause in case of a bidding war.
2. Identify the ideal location
Consider the location of the house when buying a home. When conducting your search, there are few things to have in mind.
For instance, buying a home near a highway or a busy road might mean that you will get it at a cheaper price, however, selling it later on might prove difficult. This may be also applicable to houses close to commercial properties such as gas stations, grocery stores, community centers, and large churches.
The location that catches your fancy will be largely down to personal choice. Nevertheless, an ideal location should have some of these factors in common: amenities, appearance, and accessibility. Consider locations with good school districts. Regardless of you having kids or not, choice of location is usually a top priority for numerous homebuyers. A good location goes a long way in determining your property value.
3. Set a realistic budget
Setting a realistic budget will help you ascertain whether you are prepared to own a home and help you avoid financial worries as you go along. It is advisable to set a price that matches your budget and stick to it. This will help you when you are faced with making crucial decisions. Such as a lender offering to loan you more money than you can comfortably afford, or when you feel pressured to spend beyond your comfort zone in an attempt to beat the offers of other buyers.
4. Work with an experienced realtor
Although it is possible for you to buy a home on your own, however, it is not advisable – especially for a first-time buyer. Homebuyers, especially Chicago home buyers should hire an experienced realtor that will help them examine homes and neighborhoods, draw up contracts, negotiate, schedule tours, and so on.
5. Ask your realtor for ways your offer can stand out
A realtor will help you find homes that suit your needs and are within your price range, then schedule time with you to visit those homes. These professionals can help you ensure that your offer stands out. Beyond that, once you have selected a home to buy, they can help you negotiate the whole buying process, including preparing an offer, acquiring a loan, and finalizing the paperwork.
6. Determine your “must-have” and “nice-to-have” wish lists
It is important that you identify your needs. After taking your time to search for homes online, create a list of features your ideal home must have and things you would like it to have. Be realistic. Setting expectations and knowing what you want is good, however, it is important to not be unrealistic with your expectations.
Having a “perfect home” is near-impossible, this means you have to make compromises. Identify your most important needs or things that matter to you the most and think of what you can do to make your dream home a reality.
7. Drive around the neighborhood and spend time there to make sure you love it!
The neighborhood your home is in can make or mar your experience as a homeowner. Make sure you spend time moving around the neighborhood once you see a home you like. Have conversations with your potential neighbors and get a feel of the environment.
Spend time researching the amenities in the neighborhood, school quality, crime rates, proximity to grocery stores, work, playgrounds, and so on.
8. Think about how long you want to be there and what life changes may happen along the way
How long do you want to live in the area? Life’s circumstances may rapidly change the answer to this question. If you know you might be moving to another area in a short time, then it might just be better to hold off home buying for now.
Avoid buying a home based on the current life you have. It is possible that purchasing a home might be one of your lifetime’s biggest financial commitments. It is therefore essential to think about your long-term plans including changes that may occur before buying a home. Some of the thoughts include: Are you getting married? Will you be having kids? Do you have plans to change your current job? If you are unsure whether you’ll still be living in the house in a few years, you might want to keep looking for the best fit.
9. Explore mortgage options to better understand your cash position
When buying a home, several people believe that a conventional loan is the only option they have, however, there are different available mortgage loan options also. These include VA and FHA loans. Many lenders provide the option of selecting between an Adjustable Rate (ARM) or Fixed Rate loan. Ensure you work with an advisor to understand the mortgage option that best suits you.
10. Tour as many houses and open houses as you can until you see what you like
Although open houses might appear somewhat casual, however, experienced buyers understand that checking out a home before buying is not just about a quick view or aesthetics. Tour as many houses and open houses as you can until you see the one you like. Do not make the mistake of attending open houses only just for window shopping. Instead, make the most of the opportunity by getting sufficient information about the home.
Always have multiple questions ready for the seller’s agent whenever you visit an open house. Also, ensure that you have conducted some research ahead of time. Before leaving, you should feel like you have sufficient information to make a knowledgeable decision.
Conclusion
These tips should help your knowledge of the homebuying process. Always have it at the back of your mind that the more you familiarize yourself with the process beforehand, the less the stress, and the more the likelihood of you getting a house you desire at an affordable price. When you finally buy a home, you will have the confidence and assurance that comes from being successful in negotiating a huge step in your life.
Buying a home comes with a lot of things to deal with, however, it is all worth it in the end. It is an exciting journey, and one way to enjoy the journey is to know what the process entails, and ways of handling whatever comes up. First-time and Chicago home buyers can trust their homebuying process to our expert realtors.
