Tips for First Time Home Buyers

Don't Spend Every Cent

You’ll need a down payment and money for closing costs. Perhaps you’ve already saved up, but if not, another thing to consider is that you should have some savings beyond the purchase price of your home. You’ll also have new expenses like homeowner’s insurance and property taxes, which vary according to state and municipality. Make sure you factor these into your budget before buying a home.

Additionally, even if you think there won’t be any unforeseen catastrophes such as sudden job loss or illness (which we hope will never happen), it’s good to have an emergency fund in case something does go wrong in between the time you’re approved for a mortgage and when the loan closes (and beyond—setting aside enough for 3–6 months’ worth of expenses may prove beneficial in the long term, too). If an unexpected event arises during this time period that causes your credit profile or income to change drastically, the lender may rescind its approval altogether. Also, bear in mind that moving will require spending money as well: whether it’s on movers or just gas money if friends are helping with packing up and carrying boxes over

Get Pre-Approved for a Loan

The first step before you start looking for a house is getting a pre-approval. It’s free, and it doesn’t obligate you to anything—it just shows you much house you can afford. Pre-approvals are always written with the current rates at the time of your application and will have an expiration date (usually 30–60 days from the date of issue), so make sure to check that when shopping around for properties.

Make sure when getting your pre-approval that you’re ready to move forward with buying a property—you’ll need documents like income statements and tax returns to be able to get approved in a timely manner, otherwise, your pre-approval can expire before you’re ready to buy.

Consider the Neighborhood

When you’re buying a home, you want it to be in the neighborhood of your dreams. But what makes a neighborhood “dreamy?”

Here are a few questions to ask yourself:

• Who will be my neighbors? Before deciding on a neighborhood, consider who your neighbors might be. Are they generally the type or age of people you would like to live near? Do they seem nice and friendly? Is there a high turnover rate of residents in the area? If you have children, would this be a good place for them to grow up?
• What kinds of activities are nearby? Are there places to hang out with friends (libraries, coffeeshops) and things to do outside (parks and trails)? Is this an area where you could get involved with the community by volunteering at events or joining clubs?
• How is the commute like from work/school/other important locations? Does it take forever just to get from point A to point B every day because there’s so much traffic and one-way streets around here? Or is it easy for you to get back and forth between home, work and play because everything is close together or well connected by public transportation options such as bus routes or bike lanes?
• Is the area safe where I’m buying my home? It’s always great when people look out for each other in their neighborhoods. But what if someone breaks into your house while you’re away at work or school during the day because no one’s ever around when something bad happens. That wouldn’t feel very safe or secure! You also want there to be competent emergency services if anything should ever go wrong – from medical concerns to natural disasters. Would these issues make me feel unsafe living here on my own in my new house all alone without anyone else around nearby me?

Ask for Help in the Homebuying Process

When you’re busy interviewing, buying, and moving into your first home—and that’s pretty much all the time during a realtor’s busiest season—here are a few essential tips to keep in mind. With these pieces of advice, you’ll be able to ease yourself into the process without getting overwhelmed by techie details and annoying expenses.

• Plan for Property Taxes: When you’re ready to buy your first place, ask if anything is being done to lower taxes before signing the contract. During this period of time, it may make sense to hire an accountant or legal expert who specializes in property tax laws, because they can help you understand how property taxes work and perhaps help negotiate better terms with your landlord on tax payments (you may want to expect an increase in property taxes as your home value increases)
• Enlist the Help of a Real Estate Agent : Even if everything looks good in the short term when buying a house, remember that real estate agents exist for one singular purpose: To make money off of their clients’ dreams. In other words, they’ll often give you information about local city ordinances and restrictions that many people don’t even know about (like whether or not it makes sense for your “shed” to have so many windows). Don’t take everything at face value–knowing too much can lead you down unnecessary path. Start by asking when closing is expected–maybe that’s not something important but maybe it is–because knowing what day is coming up will allow you to plan around it on numerous levels (your “moving day,” door-to-door scheduling with town inspectors, etc.).
• Get Your Home Inspection Done When You Buy Your House: While an inspection must be allowed by the terms of the purchase agreement with the seller, it is a vital piece of the home buying process.  The seller may not even be aware of a catastrophic (and expensive) defect with the property.  And while an inspection may not reveal everything, it can save you in the long run. 

Be Aware of Additional Expenses

Before you can move into your new home, there are a few more things you should consider.

• Property taxes:  the tax rate varies by location, so be sure to check how much your property taxes will be. They are typically paid once or twice per year. In some cases they may be included in your monthly mortgage payment, but in others you may need to pay them separately.
• Maintenance: Are there any repairs that need to be done? Be sure to budget for them!
• Utilities and Furnishings: If your new home is not furnished, budget for furniture and decorating costs as well!
• Homeowner’s association fees (HOA fees):  You might also have HOA fees if you’re moving into a condo or townhouse — find out if these expenses are required before making a purchase decision. If so, get an estimate of what they’ll cost each month or year so that you can adjust your budget accordingly.
• Insurance: property insurance protects homes from floods and other natural disasters; life insurance provides coverage after death while living benefits policies pay out while still alive and can help with expenses like long-term care needs.

Do Your Homework

After all of your research, you know you can afford the home and your credit, finances, and goals are in order. Your offer is accepted. Congrats! To be sure everyone understands the transaction details, get a copy of the buyer’s agent agreement and read it carefully. You may notice some new fees that weren’t part of the original estimate. Be prepared to pay for an appraisal, inspections, and surveys as well as additional closing costs associated with the title company or lawyer’s office. Make sure you have access to cash so that once your offer is accepted, you will be ready to move forward with minimal delays. Paying attention to these details are important in fast moving markets where other buyers may jump in if they sense hesitation on your part.