Deciding to buy a home for the first time is an exciting step! When starting the journey, first-time homebuyers have visions of hosting holiday gatherings in their new home, cooking meals in the kitchen, cozying up in the living room, and maybe watching kids or pets run around in a yard or relaxing on a front porch. But their minds are also swirling with questions about what the process will entail, where and how to start their search, and who will guide them through all the steps along the way. It can be overwhelming!
Planning ahead and being super prepared when undergoing the purchasing process for the very first time is crucial for making the road to home ownership as smooth as possible. Here are some key tips and insights that are essential knowledge for first-time homebuyers:
Get pre-approved for a mortgage. Obtaining pre-approval is a key step for first-time homebuyers because it does two crucial things: it gives you an idea of what you can afford and it demonstrates to sellers that you are serious about buying, which can increase your chances of making an offer that will be accepted. During the pre-approval process, be prepared to demonstrate proof of income, assets, and employment to a lender. You’ll also need to go through a credit check, so if you have any credit issues, be sure to do everything you can to resolve them before beginning your homebuying journey.
Create—and stick to—a budget. Use the lender’s pre-approval amount as a guideline, but be sure to create a budget that makes sense for your entire financial picture. When calculating the budget, include all the costs associated with owning a home, such as mortgage payments, property taxes, homeowner’s insurance, maintenance, and utilities. Also, make sure you are calculating the money needed for both the down payment and the closing costs. Having a budget in place will help you stay on track and ensure that you don’t overspend.
Determine your needs, wants, and dealbreakers. Whether you’re set on buying a home with a certain architectural style, living in a specific school district, or finding a neighborhood close to work, certain factors will weigh heavily on your decision. Make sure you have a very clear idea of what you can’t live without and what you’re willing to let go of in order to find the home that best suits your needs. Knowing that ahead of time will help make your search more effective and efficient.
Find a trusted and experienced realtor. Picking the right realtor is essential! They will be your guide through the entire homebuying journey so it’s absolutely critical that you can rely on their expertise and advice. The right realtor will make the process easier for you by handling crucial details like negotiating pricing, arranging home inspections, corresponding with the seller’s agent as well as banks and lawyers, and walking you through every question or problem that arises. Be sure to look for a realtor with great recommendations, a strong reputation, and deep knowledge of the area in which you are house hunting.
Get educated. Even with the assistance of a realtor, it’s valuable to learn as much as you can about the homebuying process to educate yourself. There are tons of online resources for homebuyers, such as real estate websites and magazines, as well as instructional videos, all providing free content. In addition, first-time homebuyer courses are available in many locations through the US Department of Housing and Urban Development.
It’s also important to be patient—the process of buying a home can take a long time!—and have fun. You’re only a first-time homebuyer once, and the rush of finding a home that you love to call your own is something you’ll always cherish.