Bible of the first-time home buyers – Buying a House for the First Time.
There is challenge on buying a house for the first time, people seems to not know Where to start, But…
Don’t worry, if you are reading this, you are starting at the right place, we know it is tempting to either just go with the first Property that meets your price range or to keep renting. So, IRG is going to clear the process for you so you get the most out of the Property investment,
lets study some points to keep in mind before you buy a house for the first time, also you will learn what to expect from the purchase process, and you will receive some very helpful tips to consider after buying a house for the first time.
Part 1: Mortgage
Analyze your goals:
Start by studying and determining your long term goals and how buying a house for the first time affects those goals. Maybe, you are trying to transform those rent payments into a mortgage, or maybe, you see owing a home as an independence sign and you like the idea of being your own landlord, analyze your most important goals when comes to owning a house for the first time and the answer will sent you in the right track
First, ask yourself these questions:
What kind of properties best fits your needs?
There are several options you can choose when buying a property for the first time: a condo, a Multifamily home, town-home, waterfronts, each with its own pros and cons, depending on your personal and financial goals, you must decide what house category is best for you. Also choosing a fixer upper can save you a lot of money when purchasing a property for the first time in any of the previous mentioned home types; although the effort, time, equity and money involved in the process of fixing a home can be more than what you bargained for.
What criteria the first home you will buy must fulfill?
Remember, it is likely that you are making the biggest purchase in your lifetime, and obviously that hard earned money and effort must have some return, and not just financial return but also in satisfaction, the first house you are going to buy must fit your wants and needs, as close as possible. write a checklist with your desires, ideal location, ideal size and even the small details like flooring, appliances and painting, doing so you keep everything that you want and need not just to the memory or the humor at the time but in an very helpful reminder.
How much a lender can give you?
Before you start house hunting, try to get an idea how much mortgage can you qualify to buy a house for the first time. In your opinion you may be thinking that you can afford a $400k home but lenders may think totally different from that, all comes down to factors like how much do you owe, your income and how stable is your job. So try to fix every aspect of this list so you can have more chance to qualify for more,
How much home can you afford?
Sometimes the lender will give you a loan for more than you want to pay, it is essential for you to look at the house cost and expenses and not only the monthly payment, but don’t get me wrong, checking the monthly payment is very important, but it is the combination on how much down payment you can afford, the home taxes, maintenance, fixing if it is required, water and power bills, the insurance cost and the closing cost that all combined will give you the full picture of how much you are going to pay for that first house.
Will someone help you buying a house for the first time?
Yes!, Real estate agents and agencies are going to search and find potential homes that match your buying criteria, and then get your opinion on the homes visited. Once you choose your (future) first home to buy they are going to help you negotiate in the transaction making offers, getting loans, and completing paper-making. A responsible and professional agent (or agency) can protect and prevent you for any pitfalls you might face while the purchase.
Part 2: The purchase Process
You have made your mind and taken the dive, what now? Let’s take a look on what you may face in the final phases when buying a house for the first time. You must be very careful, because you may perceive this as a chaotic roller-coaster, offers and counter-offers everywhere, you better brace yourself because it may not be easy for your sanity, but if you prepare your mind to the hassle to come and hang there you will get through the process and end, pleasantly, buying a house for the first time, so take a look at the regular order of phases when buying your first home:
The House Hunting
When buying a house for the first time, Try to take advantage of the wide range of options when comes to searching a home on the market including contacting an agent or agency, surfing on online listings like this one which gets new properties daily, or subscribing to receive those properties in your feed, (you can subscribe to our VIP Buyers list if you are interested in buying South Florida Properties). Another good technique is to drive through your desired neighborhoods and taking a look on the for sale signs. Also, offer a reward for helping you find a home to buy, make contact with family business contacts and offer them 500$ if they help you finding and buying a house for the first time, a great tip is to contact your pest control/plumbers/fixers that you know and trust, and offer them the same reward, those kinds of jobs often take them into for sale homes and may result very effective, try to advertise it everywhere, you never know where is going to come from the lead that would take you to the very first house you are going to buy.
You can also dive in our guide on How Finding Good Real Estate Deals is Not Impossible!
Financially there is a wide range of options you as a first-time home buyer can take to help you purchase your future home, like loans programs supported by the government for homebuyers who don’t have the 20 percent of minimum down payment. Each estate also has its own programs for first time home buyers; you can also check this article where you can learn on how you can invest with your IRA.
Offers and counter-offers
Your agent/agency are going to help you discover and decide the amount of your offer, and the conditions that you ask for, Your agent/agency are going to send the offer to the sellers agent; they are going to respond with either accepting the offer or making a counter offer. Then you can or accept right away, or play low ball until you find the desired price or to decide to quit the negotiations. If both sides agree, you will make a good-faith deposit and then the transaction will get to the escrow phase, this is a 30 days (normally) period where the sellers take the house out of the market with the legal expectation of both sides of the negotiation that you will be able to buy the house and not to face any problems at the time of the inspection and the subsequent purchase.
You might think that your buying plan is flawless or even that the property is immaculate, you must *NEVER* let your investment without the proper professional inspection, home inspectors will scan the whole house and give tangible and legal evaluation results and insights, on safety, quality and the condition of your potential property, if in the home inspections some serious defects get spotted that the seller did not disclose with you can retire your offer out of the table right away and get your money back, or you can negotiate to have the repair costs or to discount the price of the home.
If every phase of the process gets done pleasantly until this point and you agree with the seller and the inspection didn’t found any defects, by now you should be closing, you are going to check and sign tons of papers in a short period of time, while crossing fingers that no problem blows at the last minute.
In the final phases you may be dealing with a home appraisal which protects the interests of the mortgage companies, you may also be searching for titles, this way you ensure that no one else than the seller owns, also if your down payment is less than 20 percent you might want to obtain a private mortgage insurance and completing the papers of the mortgage.
Part3: You are now a First-Time Homeowner!
You have already completed the whole process signed all of the papers, paid the movers and spending your first night in your new room of your new home, so, it is all done, right? – Nope! There is always room for improvement, and when is about improving your life as a homeowner you might want to keep scrolling down because we have some great tips.
While you are moving to a new house it is likely that you are leaving an empty house alone, take a look at this very helpful checklist of what to do when Moving Out and Leaving your House Alone
With your new home comes now unexpected costs, you might want to start an emergency ‘piggy’ for your home so you won’t be victim of sudden home costs
Take care of your home as you would to your car/body/side-of-the-bed/thing that you appreciate having, you have gone to a very stressful and long process putting your hard earned money into a property, if you want to receive what it is worth you better maintain the property in optimum conditions, you and the people around will be thankful, and don’t leave thing for the next day, it is always easier to fix a problem while it is small.
The Housing Market
Don’t pay attention to the housing market at all at least you are willing to sell soon, when you have the ability to choose when to sell your home because of you wanting it and not due to a job relocation or a financial distress will clearly divide the line between if it was a good or a poor investment.
Is your New Home going to Fund your Retirement? Don’t get too excited.
Even owning a home you should definitely keep saving to your retirement account every year, because selling a house is not a guarantee of receiving tons of money for your retirement, just consider your home as a viable retirement option once you have paid the whole mortgage debt and some years has passed, the money of the payments invest it you’re your retirement fund. That way your retirement is more ensured and it is going to be easier.
Finally you have achieved your goal that is to buy and own a home for the first time, this guide was designed to help you put things in order in your mind and creating a clear track that you can follow to make your buying process more pleasant and for you to not be caught off-guard on any of the phases of the process itself. Keep reading and accumulating knowledge about this theme, remember that the more you learn the fewer problems you are going to have.
If you liked this Bible for the First Time Home Buyer, the Com
plete Guide on Buying a House for the First Time, and want to know more about the real estate world, we have a lot of great content that may be interesting for you on our social media: