Buying your first home is a life milestone. It ranks somewhere in between getting your first driver’s license and getting married. And like the final driving test or the proposal, the process of buying your first home can be overbearingly nerve-racking.
Thankfully, the thing about life is that no matter your dilemma, there’s almost certainly someone in the past who has experienced the same that you can learn from.
Here are ten tips that you should know before you begin the process of buying your first home.
Explore Your Homeowner’s Insurance Options
If you’re going to buy a home, you’re going to need to think about homeowner’s insurance. Outside of the purchase of the home itself, this is going to be the highest cost of the process, and it’s best not to go with the cheapest option just because it’s the cheapest option. You could qualify for a discount through an insurance company you work with on another asset if you bundle your package. Even if you do, check your other options, and verify that you’ll get the coverage you need should a disaster occur.
Unless you live an unusually lavish lifestyle, a home is most likely going to be the most expensive individual purchase you ever make. And the sellers that won’t demand a down payment are few and far between. On average, you’ll be expected to pay at least 20% of the home’s value in the down payment. That sounds like a lot, and it is. However, if you start putting money away on a routine basis into a special fund, that fund builds up quicker than you think.
Open Your Mind
Like weddings, people tend to fantasize and dream about their first home when they are children. Most people also tend to abandon some of the characteristics they had dreamed up earlier in life, but not all of the characteristics. It’s easy to be stubborn about a few items that you want to come up with your first home. Unfortunately, there’s no such thing as the perfect home. You will most likely not be able to find everything you were looking for in one home. So keep an open mind when it comes to the home buying process. You may not find everything you’re looking for, but if you are stubborn about your dream list, you will find nothing you were looking for.
Attend the Home Inspection
When buying a home, it’s generally considered to be a best practice to hire a certified inspector to examine the property for potential defects. Many buyers don’t attend the inspection, in good faith that the inspector will provide a detailed analysis. While any certified inspector will usually do just that, it’s still better to attend the inspection and ask questions along the way. You’ll get a more thorough understanding of your prospective that way.
Offer to Help Your Friends Move
No one enjoys the moving process. People who own trucks probably dread hearing the words, “I’m moving,” from their friends, knowing that they will inevitably be asked for help. Moving boxes and reassembling everything within those boxes is an onerous chore. That said, offer to help your friends move when they ask. Not only is it the right thing to do in the context of being a good samaritan, it will incentivize the friends you helped move to do the same for you.
Think Long Term
A home isn’t just the most expensive single purchase you will make; it’s also the longest term investment you will most likely make. So when you buy a home, it’s important to think out of your immediate needs exclusively. Consider your expectations for the future, like whether or not you are planning to have a family. Also, consider the resell value of your prospective home. That means factoring in the schools and the crime rate in your neighborhood. These characteristics always impact home pricing.
Find the Right Agent
Some buyers think they can go through the process without the help of a qualified realtor. Those people usually enter into bad deals and pay too much. Despite the fact that realtors don’t exactly have the best reputation, it’s imperative to find the right one to help you with the process. And there are plenty of agents who are motivated, smart, and dedicated to superior customer service. Talk to multiple agents before you make the decision about who is right for you.
Be Mindful of Your Credit
One of the biggest determining factors in regards to the type of home you can buy will be your credit score and activity. Mortgage lenders will consider your credit score when calculating your mortgage rate, and unfortunately, it’s not uncommon for credit reports to have some error somewhere. Acquire a copy of your credit report so that you can dispute any errors there might be. If there are none, at least you have a credit analysis that will show you where you are currently at and how you could improve your score.
Listen to Feedback
We all know those people who think they know everything. If you *don’t* know that person, then you are that person. Even if you are a generally considered to be a smart person, there’s a lot of the home buying process that is unexpectedly complicated. And home buyers have been known to lose a sense of rationality in favor of emotion when making decisions, especially first-time buyers. Make sure you have trusted family members or friends to give you helpful feedback.
Plan Ahead for the “Extra” Expenses
When you’re buying a home, you’re not just buying a home. There are a plethora of extra expenses that will factor into the process that many first time home buyers don’t expect. Think lawn maintenance. Higher utility bills. Recommended fixes from the home inspection. There’s much more to the purchase of a home than the purchase of the actual property itself. Make sure you consider that when you are putting away money in advance.