5 Initial Steps for First Time Buyers

Working with first time buyers is a passion of mine. I clearly remember my first purchase. At 26 years old and single, I was terrified to buy my first home but knew it was the right decision financially. After my offer was accepted, I panicked! I told my realtor they could keep the earnest money deposit, I just wanted out. Thankfully, my realtor calmed me down and stayed with me every step of the way. In the end, I sold the home two years later and made $40,000 in proceeds. The real estate bug hit hard and I’ve been buying and selling homes ever since. I want to pass on what that Realtor did for me, to my clients.

Buying your first home is a milestone and one of the largest financial decision you’ll make. It can be daunting to make the first steps toward homeownership. I’ll be with you every step of the way.

1)    To start, there are 7 questions to ask yourself before purchasing a home. Will you be living in the home at least three years? Do you have three to six months of emergency savings for living expenses? Have you calculated exactly how much your monthly living expenses are and where it’s going? Do you have enough for a down payment? Will your mortgage payments be on par with what you’re paying in rent? Are you ready to be your own handyman and take care of house maintenance on a consistent basis (or pay someone to do so)? What type of home and location would be ideal? The good thing is there are a lot of programs and government benefits for first time buyers (and some benefits for second time buyers, depending on their circumstances).

2)    Team up with a trusted Realtor who will be able to assist you in negotiating the entire purchase process to include searching on and off market properties, making offers, referrals for local lenders, inspectors, settlement companies and completing all legal paperwork in a timing manner. A realtor’s expertise can help you navigate any pitfalls and challenges. Typically, the buyer agent is paid from the seller’s proceed but be sure to discuss with your Realtor at the onset of your professional relationship.

3)    Make sure to get pre-approved for a loan. Sellers will want to see the lender letter upfront when reviewing an offer. Without a pre-approval, sellers won’t consider your offer. In many markets, it’s best to go with a local lender who understands the particulars of that real estate market and has worked with many of the listing agents. When choosing a lender, it’s beneficial to interview a few to compare interest rates and fees associated with the mortgage. There are mortgage calculator tools to help you compare. Your Realtor can provide a list of referrals.

4)    How much house can you actually afford? If a lender tells you $500,000 is your maximum, that doesn’t necessarily mean you want to commit to that much of a mortgage. Keep in mind not only required expenses such as property taxes, homeowners insurance and utilities but also your lifestyle such as entertainment, vacations, eating out, gifts and clothing. Will you have to drastically cut back if you purchase a home at your max loan amount? 

5)    Once you start your search in earnest, it’s important to move quickly if you want to secure a home. Decide if you’re willing to live with the hideous paint colors or the outdated bathroom for a while if it gets you a home at a great price in your perfect location. If a home fits your criteria in all the aspects except for cosmetic items than it’s a good way to add value which then bumps up the equity in the home. Offer strategies will change depending on the house, seller requirements and if there are other buyers bidding on the same house.

Reach out and let’s get started on finding the perfect first home for you!