If you’ve ever owned a home, then you know the feeling of accomplishment, pride and joy that comes along with it. There are almost always some inevitable obstacles that you must overcome as a homeowner too, however and you have to take those into consideration when buying your first home. Setting yourself up for failure is the obvious thing to avoid here, so let’s talk about your goals. Not your short term goals about when you’re going to deal with the scratch marks on your car door, but about your long-term homeowners goals. Buying a home is a big responsibility and a whole lot of work and you have to be ready for the unexpected.
If you’ve been renting, you may feel like you’ve been throwing money away on a place that will never be your own and you may be correct, but you need to know your boundaries. Especially the financial ones. First, you have to consider how much of your income is going to your rent currently. We’ll say you are paying $1200 to rent your condo per month. Your other bills may push your total “home” expenses up around $1600 per month. You look at a nice little house just outside the city and find that your mortgage will only be $1000 per month, with utility bills around the same. So you could potentially be saving a few hundred dollars per month, while building equity in your very own home. Now here’s the thing that most first-time home buyers don’t think about. Do you remember all of those “problems” that you could just call your landlord about? Dish-washer died, AC Unit stopped working, leaking shower is draining into downstairs wall, etc… All of those repair problems, are now yours. You need to have a smart budget and have money set aside for said emergencies.
That leads us to knowing your limits. You need to set a price range for your dream home and stick to it, no matter the circumstance. You want to be completely independent and own your own home and you can do it, but you must be smart about it. When you go to talk to your bank about how much money they will loan you, you have to remember these important factors.
- What kind and size of home do I really need?
- How much can I truly afford? Other debt, property taxes, neighborhood fees, utilities
- What features do I want / need in my home?
- What is my cut-off price for the home I’m bidding on?
- Who is going to help me with all of the ins and outs of my purchase? Your Realtor is going to be a huge part of your ultimate decision. Don’t forget them.
After you have worked out what you can afford, there are going to be some very important things that you have to consider and be prepared for. It is indeed a rare occasion that everything goes according to plan, so here are some pointers to help smooth out the bumps of your first home buying experience.
- Search areas / neighborhoods that you like, check the listings, both online and on paper. Make sure your realtor has a vivid description of what you want and it’s always a good idea to let your connections know that you are looking as well (family, friends, co-workers, church, etc).
- Make sure that you can afford the down-payment on any home you are interested in. It is always a good idea to try and get the closing costs taken care of in the initial bargaining too. That alone can save you a truckload of money and time.
- Be ready for the ping-pong game of offer vs. counter-offer. We stated this earlier, but mak
- evious homeowners down, but stick with your plan and stay within your budget.
4) If you reach an agreement on the price of the home, there will be an Escrow period, when you will have usually a month to get the house inspected and finalize the offer. If everything is good and both parties have reached a final agreement, then you can close.
- The last few responsibilities that you will have will probably include checking the title to ensure that no other person(s) have a claim to the home and then having the house appraised.
e sure you know your limits. Have a price plateau and stick with it. You may be able to talk the
There are a million other things to do after you move in, but that will be for another time! Congratulations on your new home and taking such a huge step in this amazing thing that we call life!