7 Tips for First Time Home Buyers
Buying your first house is an exciting experience. My name is Amanda Peterson and I am very excited to be a contributer to MCG! Before I jump into talking about the a few things I have learned in the past year and a half of buying a house, selling a house and then buying another due to a relocation I wanted to share a little bit about my self.
I am a small town girl from a town called Hicksville, the name itself describes how small it is. It was a great place to grow up but I always wanted to live in a “big city”. So after college I moved to the suburbs of Chicago where I began my “adult” life which included getting married, buying a house and going back to school for my MBA. Only six months after we had finally settled in to enjoying life I convinced my husband to join me on the adventure of a lifetime of relocating to Indianapolis or as he likes to refer to it as the middle of a cornfield (he is from Chicago).
When purchasing our first house my husband and I did a lot of research, however there were a few things we wish we would have known before buying.
1. Understand How Much Buying a Home Really Costs.
This is the most obvious part of buying a house, but just remember it is very important to be sure you think beyond the actual selling price of the home. There are several fees involved throughout the process, such as closing costs, inspections, appraisal fees, Home Owners Association, taxes, maintaince, legal fees (in some states) and your down payment of course. All kinds of factors can affect a properties value, so inspect thoroughly.
It is important to understand the total cost of the house to get a better understanding of what you will be spending each month, and trust me the expenses will add up quickly. One of the first steps in buying a house is getting pre-approved as this will help you understand what you can afford. One thing I would advise after getting pre-approved is to be sure the monthly payment fits into your budget and you factor in your desired lifestyle cost.
2. Know Your Musts and Wants.
Understanding your musts and wants is essential in buying a home and I would highly suggest doing this before going to look at homes. When buying our second home, we discussed our musts and wants such as the community we wanted to live in, the size of the home, the need for a yard, etc… We skipped this step when we bought our first home and rushed straight intolooking at homes and ended up regretting it because we didn’t understand the value of location.
3. Choose the Right Real Estate Agent.
When choosing an agent, I would strongly suggest talking to at least two agents before moving forward. Take some time to meet with a few agents to understand their experience, style and be sure they know the market. This initial conversation will allow you to be sure you are comfortable with your agent as you will be spending a lot of time with them during the process and they will be the one negotiating on your behalf.
4. Remember that Staging Can Be Misleading.
Although pictures are important and seeing furniture and decorations is helpful to see to get ideas, always remember the house does not come with all those decorations and furniture. When house hunting, we realized sometimes we would like a house just because of how it was decorated or we would not like the house because it was not decorated to our style and liking. So always imagine it empty. I will never forget walking into our first house thinking this is not the house we bought, because it looked so different when it was empty and it was time to move our furniture in.
5. Take a Second Look.
Looking at homes is overwhelming and can be an emotional experience. If you think you found “the house”, sleep on it and go back for a second showing. This helped us tremendously with buying our second house. We realized we found the right house when we started comparing every house after it to the house we liked. It also helped us notice things we did not notice the first time and think through how we would incorporate the house into our lives. Having a fresh pair of eyes will help you from making an emotionally charged and rushed decision.
6. Understand Your Mortgage Options.
Meet with at least two mortgage companies. We made the mistake of assuming our local bank, which was part of a national chain, would be the best option when we purchased our first home. When buying our second home, we met with two different mortgage companies to ensure we understood all our options. Be prepared though as this can be an overwhelming process since there are so many things to understand, jargon to decode and several different mortgage options.
Make sure you ask lots of questions and that you actually understand the different options available. Have them run calculations for several different senerios such as number of years, different down payment dollars, etc… When we purchased our second home we were able to better understand our options and ended up reducing our monthly payment by $200!
7. Be Thorough During Your Home Inspection.
Again don’t be afraid to ask questions and make sure you are present. Look in unexpected areas to ensure everything is as you expect things to be. I highly suggest getting referrals when choosing a home inspector as this is critical step in the home buying process to ensure everything is ok.
Buying a home is a great experience. Although it can be overwhelming be patient and enjoy the process.
What did you learn from buying a home? Are you considering buying a home? If so, what are you most stressed about?