Most first time home buyers experience at least some levels of anxiety when buying their homes. You shouldn’t feel overwhelmed, but it is natural not to feel comfortable when doing something new, especially when that something cost more than you will make in income for many years. Believe it or not, it’s actually a good thing to have some anxiety when spending that kind of money, you would be crazy not too. So, let me set your mind at ease its normal.
When I bought my first home I was the same way. It was all that I could do to simply find a home I liked in the market. There was so much competition it was a challenge to find a home and has only gotten greater. So fear not, you are in good company. To make the anxiety a little more manageable you need to develop a simple checklist to work through the steps. You’ve heard the question, “how do you eat an elephant?…One bite at a time”. The same is true in home buying. Take it a step at a time.
This is where it is important to work with people who are experienced working with first time home buyers, and understand that you need direction and a level of grace during the process. Lets work together to develop that list to make it easier for you to get it done.
Once you have a plan in place, buying a home for the first time can actually be fun.
First, understand that this is not the home you will be buried in. Many home buyers are very particular and want to only buy their “forever home”. I am telling you that this is not realistic. Life changes, economies change, families grow and shrink. A home has to change as you grow and change. That’s ok, you have the ability to do that. Home typically gain in value, so there is usually some equity when you make a move. even if it doesn’t, the greatest change when moving to another house will be changing the loan. The payments will still be there, you may need a deposit, but other than that its not that big of a deal so don’t worry about getting the perfect home. Studies show that most people will own an average of 3 homes over their lifetime.
Next, you need to determine what you can afford. This means monthly mortgage payment, but also the deposit requirement. If you don’t have a budget, you really shouldn’t be buying a home until you do. So take a moment to create one based on income and expenses. This will give you the room you have to budget for a payment. If you are renting, there is a good chance your rent payment would be similar to your mortgage payment. Also remember that you will have expenses in your budget for electric, water, gas, trash, and insurance. Save some for surprise expenses as well, homes require some maintenance and budgeting for it will save some headaches.
Now that you have your home plans, and budget setup, lets talk about where.
You will want to live close to work, school, grocery stores, ect. You know your needs. Here in Seattle home prices are so much higher in and around the city, that people are getting better homes 30 miles from home for less money. You should consider this as an option, just keep in mind the commute. The freeway can be a time suck on daily life in rush hour.
Ok, we’re doing good. Now you know what you need, where you want to be, and how much you can afford. It’s time to get approved for some financing. Once word gets out that you are looking for a home, and believe me the word will get out, you will be inundated with financing options. Many of these are bad options, so do your homework here. For me, I only work with companies I know. Commercials, billboards, my bank, or referred by a friend. This is a big investment and you need a company that you can trust. Check their reviews, get to know them, get to like them, then get pre-approved for a loan. Once that’s done its time to start hunting for that home!
You will need a real estate agent.
You will need a real estate agent. They do take a commission, but I have seen to many buyers get cheated without an agent. Its worth the protection to have qualified experienced professionals in your corner. Coming from me that should mean something, as I am always looking to cut costs, but in this instance It will cost you not to have an agent. Again check reviews, get references from friends, get to know them. If you don’t trust them, get another agent. They should be experienced working with first time home buyers. This will make the process a lot easier for you.
Once you find the home you want to live in work with your agent to put in an offer. They will know what would be a reasonable offer to give to get results and be aware you will probably have to counteroffer with another bidder. This can be stressful, so be prepared for it. Once your bid is accepted complete the loan and paperwork. You’re almost home.
Now its time for an inspection. You want to know the quality of the home and if there are any defects. You don’t want to be surprised by damaged foundations, backed up sewer lines, or failing roofs. These type of expenses can cost $10,000 to repair. It’s fine for you to choose to take on that responsibility, just not to be surprised by them. Often times if an inspector finds them, your agent can ask the seller to reduce the price or repair it before completing the sale. So a qualified Home inspector like Home Resource Solutions at HRSinspects.com is key.
First time home buyers Conclusion
There are plenty to consider when buying a home, but it doesn’t have to be scary. The key is being prepared and understanding to take it a step at a time. Use professionals who know how to help you every step of the way. Know the expenses, and budget for them. Last, Choose a home you feel comfortable with. Having a place of your own gives you a place to be yourself and live your best life. So be prepared for it and make it happen.
By: Daniel Arnett, CMI/IAC2
Home Resource Solutions