1. It costs more to own a home than just the purchase price. In addition to the money needed for a down payment at closing, you should factor in additional cash needed, such as home inspection costs, termite inspection, financing, attorney, title insurance, prorated property taxes, and insurance. homeowner, all of these combined will be your closing costs. The future costs of owning a home are the ongoing expenses for insurance, taxes, utilities and maintenance. Make sure you’re comfortable with these numbers, or lower the purchase price to stay within your budget.
2. Just because it’s a buyer’s market, don’t assume it’s okay for you to buy now. Homebuyers need to make sure their jobs are secure, that they can qualify for financing, and that their reason for buying is based on facts, not emotions. If the answer to these questions is “yes,” consider moving forward with the home buying process.
3. Before looking at any home, get pre-approved for financing. This accomplishes three important goals: it will help you find the best deal for you, it will keep you focused on the right price range when looking for homes, and the seller will take your offer more seriously.
4. Select a competent real estate agent by asking friends for referrals, researching the Internet, and calling real estate agencies in the area where you want to buy. Interview at least three agents and select the one you think is the most knowledgeable and the one you think you can work best with. First-time homebuyers must select an agent with an ABR (Accredited Buyer’s Representative) designation, which means the agent has additional training and experience representing buyers.
5. When making an offer on a specific home, be sure to get an estimate for any maintenance or upgrades you may want to do to make sure the purchase price plus any additional work costs are within your budget.
6. VA Loans and US Rural Home Loans require no down payment. Down payments on FHA loans range from 3.5% to 6% of the home’s purchase price, while conventional loans are 20%. There are local, state, and federal loan programs to help first-time homebuyers with assistance with down payment, loan terms, and interest. Be sure to check out these options.
7. Make sure your new home has good resale potential. Factors that affect property value include specific location, school district, community amenities, proximity to shops and restaurants, etc.
8. Potential sources for finding lower-priced homes are for-sale-by-owner properties, foreclosures, and short sales. In most cases, these homes are sold “as is”; always do a home inspection. The new homebuyer should not walk this path alone. Consult a real estate attorney or use a real estate agent. In most cases, the real estate agent can negotiate so that the seller pays her commission.
9. When buying a house, do your research before making an offer. Have your real estate agent complete a current market analysis of similar homes in the immediate area so you know what the fair price is. If possible, walk around the neighborhood and talk to current residents to see what they like about the neighborhood and drive around the area at different times of the day to see firsthand if it suits their needs.
10. When submitting an offer, make sure your agent has included all contingencies that would allow the buyer to be released from the contract with the return of a bond. Contingencies may include buyer satisfaction with financing terms, appraisal, home inspection, or ability to obtain homeowners insurance.
11. Immediately before closing, ask your real estate agent to arrange for one last showing to make sure the house is in satisfactory condition.