Eight Essential Tips for First Time Homebuyers
Purchasing a home is a major milestone for anyone, let alone a first-time homebuyer. The process is certainly exciting, but it can also be confusing or stressful – and sometimes all of the above. Here are eight tips to ensure your first homebuying experience is successful.
1. Give Yourself Credit
Almost every first-time homebuyer funds their purchase with a mortgage, and getting a mortgage requires credit. The better your credit, the lower the interest rate on your loan, and that can result in thousands or tens of thousands of dollars in savings over a number of years. To achieve a good credit score, it’s important to establish and use credit accounts, but it’s equally important to properly manage those accounts. Pay bills on time and maintain a low balance on credit cards or pay them off in full each month. You can check your credit score online through the main credit reporting agencies. And if you run into a problem, fix it as soon as possible.
2. Seek Approval
Before you start looking for a home, it is essential to get pre-approved for a mortgage, especially in today’s competitive marketplace where there are more buyers than homes for sale. This will let you know exactly how much you can afford and make you a more attractive buyer to sellers who may be entertaining other offers. The lender performing the pre-approval will review your credit report and look at other documentation, such as paystubs, bank and brokerage statements, and tax returns. A pre-approval is not a full loan commitment.
3. Get an Agent
A licensed real estate agent not only provides you with access to the greatest number of listings; they also have the expertise to guide you through the dozens of steps involved in buying a home. Buyers who think they’ll save money by not using an agent usually wind up costing themselves money, and missing out on the home they want, because they don’t have someone to advise them and negotiate on their behalf. With over 3,500 @properties Christie’s International Real Estate agents in the Chicagoland area, Indiana, Michigan and Wisconsin, finding the right one for you is a breeze.
4. Identify Needs vs. Wants
Make a list of the features that are most important to you such as location, type of home, number of bedrooms and bathrooms, and amenities. Then separate them into must-haves and nice-to-haves. This will help you focus your search and make sure you’re looking at the right listings, especially if you’re sticking to a strict budget.
5. Know Your Neighborhood Necessities
Make sure you carefully research neighborhoods as well. Consider things like schools, nearby amenities, and access to transportation. It can be helpful to visit neighborhoods at different times of the day to get a better sense of the area. Don’t forget to consider what you’ll want in a location over time as your lifestyle evolves.
6. Understand Hidden Costs
There are many costs associated with buying a home beyond the purchase price. You’ll need to budget for things like closing costs, property taxes, home insurance and, if you’re buying a condominium or townhome, assessments/HOA dues. You’ll also want to furnish that home and budget for maintenance and repairs. Be sure to factor these items in when determining how much you can afford.
7. Slow It Down
Buying your first home is a big decision, and it’s important to take your time. Don’t feel pressured to make an offer on a home before you’re ready, and don’t hesitate to walk away if it doesn’t feel like the right fit.
8. Make Closing Time Easy
Once you’ve found a home and your offer has been accepted, you’ll need to navigate the escrow process. This can typically involve significant paperwork and deadlines, but at @properties Christie’s International Real Estate we’ve eliminated much of the hassle with Closing Milestones, our proprietary client-facing homebuyer portal. The technology guides buyers through the critical steps from contract to close, helping you keep track of key tasks and dates for items like the home inspection, attorney approval and mortgage approval.
