Buying a house can be a scary experience for anyone, especially so if it is your first home purchase. Below are a few tips that can help make the experience less stressful.
• Preapproval – Many banks will pre-approve you for a loan before you actually apply for the mortgage, often free of charge. Not only will this give you an idea of how much house you can afford, but the bank will also run a credit check, which will alert you to any issues you may have in your credit history that need to be addressed before you actually apply for a loan. Including a preapproval letter adds strength to your offer and lets the seller know you have the ability to finance your purchase.
• Consider all of your expenses – Your mortgage isn’t the only payment you will be making as a home owner. Real estate taxes, utilities, repairs, and insurance are all expenses that may have been less or nonexistent if you were renting prior to buying a home. Make sure to factor in all of those things when determining how much house you can afford.
• Appliances – If this is your first home, you probably don’t have any. The listing will let you know which, if any, appliances are included with the home. Make sure to consider the price of any appliances you need to add or replace when deciding on how much to offer on the property. Also, while touring the property, if you see something you might want (lawnmower, snowblower, etc) don’t be afraid to ask about it. The seller may be willing to part with whatever it is if it helps close the deal.
• Get A Home Inspection – This will usually be done after you have an accepted offer. It costs a few hundred dollars, but can be extremely helpful in finding things in the home that need to be fixed, including potentially dangerous safety issues. It is not required, but recommended that attend the home inspection. A good inspector will point out things to you as you go through the property , offering suggestions and ideas that go beyond what ends up in their final report.
• Use Your Home Inspection – Did the inspection find foundation issues? An electrical problem? The seller is obligated by law to disclose any material defects in the home. If your home inspection uncovers any such defects you can amend your offer to have the seller fix the issues or reduce the purchase price. If the seller will not fix the defects, you can get out of the deal. The seller would then be obligated to disclose those defects to any potential buyers. A buyer could run into trouble trying to get financing for a home with defects, so the seller is usually going to need to fix them before a deal can be reached. Because the seller is going to have to fix the defects for someone; it might as well be you.
While it can be intimidating, buying your first home can also be an extremely satisfying experience, not to mention a good investment. With a bit of planning and forethought, you can jump into the real estate market with confidence, and will soon be on your way to home ownership.