First Time Buyers Guide: Everything You Should Prepare For When Investing In Your First Property
Buying your first home can feel like plunging into the deep end of a pool for the first time. You’re hoping you’re not making a big mistake, and you’re worried about getting pulled under into something you can’t handle.
Fortunately, most homeowners end up with happy stories about their home buying process, so chances are this is going to be right for you. The best thing you can do is be educated on what it takes, and do what you can to be patient with yourself and those you’ll have to work with along the way.
Here’s everything you should know about buying your first home!
Realtors and Real Estate Agents, or Not?
First of all, there’s a difference between realtors and real estate agents. Realtors are registered professionals who have been heavily trained on local laws and essential strategies to sell and buy homes. Real estate agents also receive in-depth training, but they’re rarely registered to any organization, and work with real estate companies and banks to help sell properties.
Although many home buyers and sellers forgo them these days, opting instead to buy or sell via listing sites like Zillow, that’s not always the best option for first-time homebuyers. Working with a professional to buy your first home will walk you through the steps necessary to make an educated decision on a property.
What’s a Buyers’ and Sellers’ Market?
These boil down to supply and demand. In a buyers’ market, the supply is higher than the demand, so buyers get to have their choice from tons of homes and bid as lows as they’d like to try and get a good deal. On the other hand, in a seller’s market, the houses are far outnumbered by people wanting to buy them, and because of this, bidding wars break out about properties.
Is The House Price Set In Stone?
Yes and no! If a seller tells you they’re not budging on price, or giving you anything like paying for the closing costs, it’s not worth trying to convince them out of it. On most homes, though, the price is more flexible. Most sellers, especially in buyers’ markets, are desperate to sell and are more eager to accept lower offers. Work to barter and lower the price, but don’t go too short, or the seller may back out, and their generosity could stop there.
How Much Are Closing Costs?
Closing costs are fees and expenditures that come up during the home buying process. Usually, these amount to fourteen to sixteen percent of the value of the home. These fees cover everything, including property tax, staging your home, and your realtor fee. As I said earlier, you may be able to convince a seller to give you the closing cost to ensure you’ll buy the home.
How Do I Get A Mortgage?
A mortgage is a large loan that exists to allow you to buy a home, as long as you agree to pay it back in monthly installments. The average mortgage runs between ten and thirty years, meaning that you can break it down into being around the same cost as an average rent payment. Make sure your credit is good, that you have a downpayment, and that you’re ready to move forward on a house before you apply for a mortgage. This loan is a significant financial decision you can not take lightly.
How Much Does It Cost To Furnish A House?
The cost of furnishing a room depends on taste and location. If you don’t mind second-hand things, you could get a bed frame at Goodwill for $30, or if you want something more excellent and brand new, they could go upwards of $1200, including headboard. Consider your budget and look for things that speak to you. Don’t buy the first couch or sofa you see; compare furniture like Lovesac to other brands to try and find the best fit.
Where Should I Aim To Live?
Look for a home in an area close to those you love, and places you frequently go like your job or your children’s school. Try to find a spot that fits within all of these locations, and aim for a neighborhood or area that suits your tastes. If you aren’t tied down, and you want to move, you can get more bang for your buck in states like Kentucky or Missouri, but moving just for an inexpensive house isn’t a great idea and could leave you seeming financially unstable when you apply for a mortgage.
A homeowners association is a board of people who live in your neighborhood and help keep it in order. This board ensures your property values stay high by checking that lawns are maintained, homes are well looked after, and nothing flashy or trashy is in your yard. Some people like them, but others see them as a waste of money.
If you want to be as individual as possible, and have freedom of your home and freedom from payment, you should avoid areas with homeowners associations.
How Much Of A Down Payment Is There?
Your down payment depends on your credit, how much the home you want is, and how much you can afford. It’s always better to pay as much as possible into your down payment since it lowers your monthly payments, but that’s not possible for every homeowner. The average down payment ranges between ten and twenty percent of the home’s cost and has to be paid upfront.
Why Do I Need An Inspection?
An inspection protects both you and the seller. You get to buy the house with peace of mind knowing that it’s safe and in good condition, and they can sell it knowing you won’t sue them for trumped-up damages later. The cost of this is part of your closing costs in your home.