6 Tips for First-Time Home Buyers
If you’re a first-time buyer in the market for a new home, congratulations. Your timing couldn’t be better. Home prices are still low and financing rates are at historic lows. You shouldn’t, however, enter the buying process without a well thought plan in place. In order to get the best deal and land yourself that dream property, you’re going to need to do a bit of homework, and fall back on some common sense as well. Read on for need-to-know essentials before setting out to land your first home.
1. Research Nearby Comparable Home Sale Prices
No matter where you’re looking to buy a home, it’s important to research what other homes recently sold for in that area. The market is still fairly volatile, and this research can be very helpful during the negotiation process. Your best bet is to contact a local real estate agent and use a website such as Homes.com.
2. Research What’s Most Important to You
Next, you have to decide what’s most important to you in the home that you purchase. Is it the number of bedrooms or bathrooms? What about other amenities like an attached garage or a pool? Local schools? Distance to work? Are you concerned about crime? It all depends upon your personal situation, but doing this research beforehand can help you nail down the properties you’re most interested in. The Homes website can help with many of these items.
3. Choose Your Home Inspector Carefully
By all means, you want to have any property you’re interested in inspected by a trusted professional. However, if your real estate agent offers you a list of inspectors, be wary. They may have pre-existing relationships with these people and the results of your inspection could be biased in order to streamline a quick sale. Not to sound alarmist, but you may want to develop a relationship with an inspector you find on your own.
4. Thoroughly Investigate Your Mortgage Options
Rates have never been lower, so you certainly have plenty of financing options available – a thirty-year fixed, fifteen-year fixed, adjustable rate mortgage, and more. Be sure to consult with several mortgage professionals beforehand to make the best decision on which mortgage is most in line with your needs.
5. Improve Your Credit Score
One of the best ways you can reduce what you pay for your new home is to improve your credit score before the process actually begins. Pay your bills on time, reduce your debts (especially those with high interest rates), and keep unused lines of credit open. All of these strategies can improve your score and allow you to qualify for the best mortgage interest rates available.
6. Make a Reasonable Offer
Making an absolute low-ball offer just won’t work anymore since the housing market is starting to recover and competition has increased. Instead, try to inch your sellers down somewhat, without offending them. The last thing you want to do is to price yourself out of the negotiations because you started too cheap. Be sure to listen to your real estate agent’s suggestions when it comes to making that first offer.
When choosing a real estate agent, do your research. The Homes website has great resources available that allow you to choose the real estate agent most suited to your needs. Check with family and friends to see if they’ve had success with an agent they used previously as well. Make sure your agent is licensed by the state, is a member of the National Association for Realtors, and has a healthy sales record. Buying a home is one of the most important financial decisions you’re ever going to make in life, and it’s important to partner up with a qualified professional.
What tips can you think of for first time home buyers?
David Bakke is a homeowner currently living in Atlanta. He shares his tips related to real estate, banking, and money management on the popular financial blog, Money Crashers.