Tired of leases and monthly rent checks? Homeownership may be right for you, but it’s nothing to take on lightly. Many first-time buyers wonder: How does buying a home work? The process can be long, and it includes a number of important to-dos. To get you started, here is a home-buying how-to with items to check off your list early:
- Set a reasonable timeline: Make sure you start early. If your lease expires in less than a month, you’re going to have a hard time moving seamlessly from a rental property into a new home. Another reason to start early: You don’t want to make a rushed decision. A new home is probably the largest purchase you will make in your lifetime, and you want to ensure you find something that fits your needs.
- Find a realtor: Sure, you can try to go it alone. But there’s real power in having an expert on your side. Experienced realtors possess a deep understanding of the home-purchase process, and they can help prevent you from making any first-time mistakes. A good realtor knows neighborhoods and homes that fit your criteria. He or she handles offers and negotiations. And a good realtor can also provide guidance on inspections, financing and other important home-purchase tasks.
- Secure financing: When you get preapproved for a mortgage, you go into the house hunt with knowledge of what you can afford and authority behind your offers. Lending terms will depend on your credit profile, and rates are constantly changing. A good rule of thumb is that homeowners can typically finance about two-and-a-half times their annual gross income.
- Consider the full cost: Your monthly obligation includes more than the principal and interest payment. When you purchase rather than rent, you find yourself responsible for homeowner’s insurance, property taxes, repairs, maintenance and more. These additional costs can double what you spend each month (or more). When creating a budget, include the full cost to ensure you’re comfortable with the purchase price.
- Narrow your search: Depending on where you live, you may have thousands of options at any given time. No prospective homeowner can effectively filter this array. Decide early on where you want to live. Perhaps proximity to work or relatives is important. Or, maybe the public schools need to be of a certain quality. Determining where you want to live will help you narrow your many housing options.
- Decide what’s vital vs. optional: Another tactic for filtering your options is to decide what is a must-have vs. a nice-to-have. If you need at least four bedrooms, a two-car garage and a swimming pool, that will help narrow your options significantly. Don’t waste precious time looking at homes that do not include your must-have features.
- Be patient: Searching for a home can be frustrating. This frustration can tempt some into settling for less than what they want. Exercise patience and understand that finding the right home for you and your family can take time. There’s one caveat to this: If you hold out for perfection, you may find disappointment. Make sure you’re getting reasonable must-have features and be flexible on anything that’s optional. It takes time, but the right mix of patience and flexibility should result in an outstanding home that meets the needs of you and your family.
Purchasing a home is a big decision, but it’s not one that should intimidate you. If you’re ready to start the process, an agent from CENTURY 21 Core Partners can help. We provide home-buying tips for first-time shoppers. Contact us today.