4 Tips for First-Time Home Buyers

Buying a home
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Finally, the decision has been made to buy your dream house! This is one of the biggest investments you will be making in your life and it helps to do your  research, attend open houses, and study your options before arriving at a final decision. You can even get your dream home for a bargain – consider buying a fixer-upper!

The task of finding your dream house may seem daunting at first but it can also be a fulfilling experience… once you know what to watch out for before committing to the sale and signing that contract.

You can make use of this Homebuying Wishlist to help you materialize what you really want.

Here are a few tips that may come in handy for first time home buyers:

Identify Your Needs

If you are single or living alone, a condo might suit your present situation. Purchasing an investment instead of paying for a rental might be money well spent when you decide to sell.

For couples thinking about the long term, consider getting a house instead. A house would be more suitable if you are a new couple looking towards raising a family or already have several children. Consider these questions before starting the search:

  • How many rooms would you be requiring, bathrooms, a small or large kitchen, a patio, an office, den, etc…?
  • Would you want a house with a yard that requires maintenance? Is that feasible?
  • Will a condo, duplex, or townhome suit you better?
  • What kind of neighborhood or community would suit your needs or would you be comfortable in?

Consider your needs, your wants, lifestyle, convenience, accessibility to shops, schools etc…

CreditPenny Hoarder

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Determine Your Budget

After your mind is set on what you need or want in a house, the next question you need to ask yourself is: Can I afford it? Will I buy in cash or get a home loan? How is my Credit Rating?

After deciding to purchase a home you have probably set aside a substantial amount of cash that would cover the down payment. Standards are usually between 3-10% of the cost of the house. Cash sales are always a great option, but unfortunately most buyers do not have enough to purchase a house right away.

A mortgage from a bank is almost always the chosen option. Getting pre-approved for a home loan will speed the process up and work in your favor when you finally start looking around at houses.

The rule of thumb is that your monthly mortgage should not be more than 30% of your income. Aside from this, a smart move is to set aside contingency funds for repairs and maintenance, property taxes, insurance, utilities… the list just goes on and on.  

So, after the purchase, cultivate a habit of saving. So work hard and save, save, save!

Start House Hunting

Now that you have gotten the financial aspect of purchasing your home in order and studied its implications, you are ready to start looking around for your first home. Soliciting the help of a realtor would be wise, as they can point you in the right direction during your search for your dream home that is well suited to your budget.

Your realtor will present you with options, but nothing beats onsite visits or oculars to check these out. This will help you get a feel for the home and the overall condition, check out the neighborhood, the community, and the facilities around the area.

Keep in mind that you do not have to make an immediate decision or be rushed into making a purchase. Buying a home is a huge step which you won’t likely doing again anytime soon, so it is best to list down pros and cons with each home you visit and take photos of each one.

Looking for a new home

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A Final Inspection is Necessary

After oculars and having narrowed your list to five potential houses that could be for you, a final and more detailed inspection should be done. You may also seek the help of professionals who can check out several things within the property that may need to be repaired and how much these may set you back financially.

Remember, it is best to check beneath the facade or exterior. There may be some things that are not immediately visible or noticeable to the untrained eye.  

Here are a few things you may want to check out especially when buying previously owned homes:

  1. Roofing – Often overlooked, checking out the roof isn’t usually included in site visits. Some roofs may need repair or replacement.  If this is the case you may negotiate for a reduction in the asking price from the owner based on the estimated cost from your contractor.
  2. Foundation – It helps to check if a recent coat of paint has concealed any cracks or problems. It may help to know the history of the house or the area in general so you know that what you are purchasing is sturdy enough to last for years and will not cave in on you during your sleep. Foundations are one of the most costly problems that can often go unseen.
  3. Plumbing – Check water valves, pipes, hardware, flushes etc. Along with good plumbing, the water pressure in the area would also be an important consideration. Consider the waste system the neighborhood uses as well. Sewers run by the city cost a monthly fee but are convenient. Septic systems require maintenance, some as frequently as every year.
  4. Electrical Wiring – This should be inspected to check for safety and any old wiring that should be replaced. The electrical allotment should be able to support all the appliances you intend to bring with you. Some old homes need to rewired, tested for safety, and repaired to make sure the system is up to code.
  5. Flooring – It is wise to check under installed carpets for any defects in the actual flooring of the house which may require immediate repair or attention.  Consider that you may want to replace old tiles or floorboards which may add to the cost of the purchase. Sometimes original wood flooring is found under old carpet, which is usually a plus.
  6. Pests – Check for droppings of mice or rats, cockroaches, and termite infestation. A clear sign of the presence of termites are hollow beams, posts and the like. This situation should be addressed immediately, and can make or break a sale of a home.
  7. Painting – The interior or exterior walls of the home may require painting or you may simply want to change the current paint color of several rooms to suit your taste or preference.

Whatever you see during this final inspection may affect your final choice, especially when you consider the extent of the repairs needed before you can move in.  This may set you back a few hundred dollars or more depending on the work that needs to be done.

Take your time and enjoy the process. Once your decision is made then work towards making your Dream House into a Home that you love coming home to the end of the day! Happy house hunting!

4 Tips for First-Time Home Buyers was last modified: December 30th, 2016 by Raffy Marabut
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