Home Buying Tips for First Time Buyers

Home buying can be a daunting and stress inducing process. Potential buyers go through a myriad of emotions when even considering a new home. There is a lot you need to know before you purchase a home. So you want to proceed with caution before you make any long term decisions regarding home buying. Here are a few tips that can help make the experience a whole lot better.

Tip #1 Find the right price range

While dreams of having a big home with a pool and spa may be enticing, they may not be very realistic when it comes to the price tag. You need to take a hard look at your personal finances before buying a home. Home prices fluctuate at a constant rate. The real estate market can be very volatile during certain periods. Fluctuating interest rates may affect what you can afford. So realistically look at every dollar you spend and how you spend it. Just because a bank can finance you at a certain rate or amount doesn’t necessarily mean that is how much you can afford.

The first step is to note down how much income you bring home monthly. Then take into account everything you spend your money on. Besides the basics like rent, transportation and utilities, you may have extra bills such as credit card payments, personal loans and education expenses. In addition you need to look at any extras you spend on such as entertainment and shopping. Once you total it all up you can get an idea of what you are able to spend on a monthly home payment.

Tip #2 Obtaining financial pre-approval

Getting a financial pre-approval is very important. You should look at several different lenders before deciding on one. All lenders have different qualifications and can make you various offers. So carefully review each one then obtain your approval. It is better to get your pre-approval before you go out and start trying to negotiate an offer with a home seller. Your pre-approval letter will give you some leverage to work with when it comes to negotiations. Before you get a pre-approval you will need to get pre-qualified first by a lender. This is basically the lender taking a look at your financial status to see what can be done for you.

Tip #3 Deciding on needs and wants in a home

Your “needs” should contain those points that you must have in a home. This can be something like being near a school for your kids, having local transportation in walking distance or being close to a hospital or park. Other points to add would be having a certain amount of bedrooms, bathrooms or even needing two car spaces. These are your must have items.

Creating a list of “wants” is next. This list includes things are basically optional or can be changed. Having a certain color scheme, a hot tub, a finished basement or even landscaping is considered to be a want. Having a list of wants and needs can help you narrow down potential homes. It also can help you when you are looking at home prices. Homes with more wants than needs can be more expensive to purchase.

Tip #4 Obtain a real estate agent

While anyone can go out and pick a home for purchase, it is not recommended that you do it alone. Obtaining an agent can be very helpful. Agents can take a lot of the hard work off your hands. They can provide listings of available quality homes. Agents are specially trained and can help you with your wants and needs before hand. They also have access to homes that may not be listed for sale. Many well trained and season agents can spot overpriced homes and can advise you accordingly. Some can even recommend services for obtaining financial backing for your home and help with home negotiations.

Tip #5 Choose a decent neighborhood and residents

Issues such as crime, fuel and energy supply, insurance rates, property taxes, medical facilities and quality schooling are important when choosing a home. Living in a decent area can add or remove value from a home so you need to choose wisely and carefully. You should also consider driving distances to and from work, traffic issues, and accessibility to churches, shopping centers and banking when reviewing neighborhoods.

The best way to check out a neighborhood is to visit one during peak and off peak times. Driving through areas in the evenings when people are home can be beneficial. Stop and talk to people if you can as well. Get an idea of what to expect before you move in. Ask questions about neighborhood security and other neighbors. It doesn’t hurt to know these issues before you make a purchase. Neighborhoods can change drastically from one hour to the next. Living in a bad neighborhood can affect home prices and insurance rates.

Tip #6 Find the right professional home inspector

A home inspector is vital to every home purchase. You should never buy a home that wasn’t professionally inspected. You never know what could be wrong with a home. And if you don’t get it inspected you could be in for costly repairs in the future. The inspector should be able to review the overall condition of the home including electrical issues, building construction, heating, cooling and plumbing. Check with several inspectors on their services before you pick one. Check out their qualifications and get referrals if you can. If an inspector finds any problems with the home before you buy it, you may want to back out of the deal. Or you can use what problems you find as leverage for lowering the costs of the home.

So always take your time when considering a home purchase. There are many options available and you should evaluate them carefully. But be prepared before you buy. Ask questions when you can and do as much research as possible. Home buying can be hard but it doesn’t have to be if you are well informed.