If you’re thinking of buying your first home, you may be worried about typical first-time buyer mistakes or taking on too much. Luckily, we’ve gathered a mix of common misconceptions as well as insights from our real estate agents to equip you with what you need to know.
Buying the Neighborhood
One of our Brokers, Annita Baze Hansen, points out the importance of thoroughly exploring the area before buying a home. “A buyer once told me that they wished they had checked out the neighborhood more. They wanted to be in a quiet area with little traffic noise. It wasn’t until they moved in when they discovered a development under construction nearby.” It is just as important to envision yourself living outside of your home as much as inside of it. Take the time to vet the neighborhood at different times to understand the environment more.
Understanding All the Costs and Fees
We aren’t going to sugarcoat it. There are many costs and fees when it comes to buying a home. Fortunately, we’ve got you covered with a cheat sheet detailing the most common costs and fees you will encounter.
Demystify the Home Buying Process
Buying a home can be less complicated than you think. Though there are many steps to take, a great real estate agent will be at your side throughout the entire process. “Many of my buyers thought that buying a home was risky and complicated. Some didn’t believe they could even afford it,” says Broker Alyssa Ahern from the Ahern Real Estate team. “But after they sat down with us, we showed them that buying a house can save more money than renting in the long run.” It’s so important to work with an agent who will break down the home buying process and the costs involved. That way, you know you’re making the best decision to build your wealth while creating an organized, strategic plan of action to achieve success.
As for the misconception regarding home financing, many think you have to be able to pay 20% of the purchase price as your down payment. But there are many mortgage programs that require 15% to as little as 3.5%. You can learn more about this through our partner Penrith Home Loans.
Buying for Resale Value
One of the most important aspects to keep in mind is the resale value. Even if you plan to live in your “forever home,” there is always the possibility you’ll have to sell in the future. If that happens, understanding the property’s current and potential value will help you plan accordingly and ensure that you’re making a smart financial decision.
Using the Home Inspection to Financially Prepare
Be sure to plan for the fact that you may have repairs and other unexpected costs right after buying your home. Bridget Young, a Broker from the Kimmel and Young team, says, “buyers appreciate a thorough home inspection that they can use as a ‘to-do’ list post-closing. Big financial surprises are always hard on first-time homebuyers because they have likely spent all of their money on their down payment.” Having a thorough home inspection done and getting a list of essential repairs can help adjust your budget as needed.
Calculating Mortgage vs. Monthly Payment
A good mortgage deal sounds nice, but think about how the monthly mortgage payment will impact your overall budget. Keep in mind that just because someone qualifies for a loan doesn’t mean they can afford it. Take the time to calculate your monthly payments. Create a potential monthly budget to see whether or not you can really afford the home you’re eyeing. Check out these financial calculators to help you get started.
Finding an Excellent Local Agent
A knowledgeable, local agent who really knows the local market, and what would be the best fit for you and your budget is crucial. You also want to connect well with this person so that you feel heard, understood, and well supported. Our current seller’s market means there’s a lot of competition amongst buyers. So, having the right local advocate means even more. Feel free to meet with a few different agents in person or online to see if you’d work well together.
Remember, they are serving your needs. If you start to feel like they are not keeping your goals top of mind, don’t be afraid to find a new agent. Otherwise, you’ll wish you would’ve asserted yourself and taken the time to find a better agent after going through unnecessary struggles and stress. The right agent will listen, plan, research, analyze, project-manage, strategize, guide, assist, support, negotiate, and serve your needs so that you won’t have any regrets at all.