Buying your first home is stimulating, and full of hope. It is also the most expensive purchase you will make besides your first car. A considerable amount of thought should be put into your first home purchase before you hire a real estate broker. With some thoughtful investigation and decision making before starting your search, here are some mistakes you can avoid before buying your first home.
1. Be Clear About The Kind of House You Want.
Make a list of housing attributes that are important to you. For example, do you want porches, a fireplace, a large back yard, or central air conditioning? If you do not know what you want, the broker will show you what he has available. This may not necessarily be the type of home you are seeking, and it will waste both your time and that of the real estate broker.
Decide if you want a single-family home, or one with tenants. If you buy a rental income house, how much of a landlord do you want to be? Will you buy a two-family or a three-family house? Calculate how much monthly rental income you will need to help pay the mortgage. Resist the efforts of your bank or real estate broker to buy a more expensive house than you can afford. Resolve to stick to your own priorities in a home.
2. Get Pre-Qualified for Your Mortgage.
The preferred agency should be your bank or mortgage entity rather than your real estate broker's finance company. Your broker will try to commit you to as much house as you think you can afford. A bank in turn, will want to make sure you can afford a house for the long term. Regardless of how much house you are told you have the funds for, always decide to get a house for a few thousand dollars less than what you are told you can afford. Think of your first house as a starter home. You want a house that you can live in comfortably for at least the next five to ten years.
3. Have More Money Than Just the Down Payment.
Do not spend every dime of your life savings on the down payment. There will always be something you will need to have repaired or replaced after you purchase your home. You need to have a reserve of money for emergencies. The hot water heater may go six months after your purchase. You may decide to remove the wallpaper in several bedrooms and paint them. Unless you were able to obtain warranties or written guarantees to repair or replace specific items up to a certain period of time, in the first year, you will have to come out of your pocket to take care of miscellaneous repairs.
4. Have the Home Inspected By a Professional.
This is not the time to have your friend who owns a few buildings look over the house you plan to buy. You need to hire someone certified to inspect real estate, a person who knows what to look for. The inspector will be able to determine if the house has termites, if the heating system or pipes are in bad condition, or other conditions not noticeable by the naked or unprofessional eye. An official home inspection will put the seller and broker on notice that you plan to buy a house in good condition.
5. Do Not Let Fear Rule Your Decisions.
You finally find a house you love. You love the house, the street, and the neighborhood. The real estate broker is very positive about the condition of the house, and talks about the ability of the property to increase in value. At the same time, the broker tells you there are several interested parties that also like the house. Perhaps if you offered a little more than the asking price, you could get a leg up on the competition.
Remind yourself of your initial goals for a house. Review your list of financial priorities. Is the broker working for you, or for the seller of the house? Depending on which person he or she represents, paying more for the house may only be in the broker's best interest.
You cannot be afraid to lose a house just because you have been looking for a long time, and you are afraid the seller will pick someone else's bid over yours. Especially if raising your bid will put you outside of your pre-determined, affordable monthly mortgage payments.
Avoid these five mistakes, and it could save you thousands of dollars in unanticipated expenses or losses.
Certified Property Manager Carolyn Gibson of Boston, MA writes articles and books based on her more than 30 years of experience as a property manager and company owner. Her web site is devoted to the challenges and answers to the property management industry, including leasing, marketing, attracting and screening good tenants, property maintenance, and how to have a successful property management business.
Carolyn's books, "How to Pick the Best Tenant", and "Secrets to a Successful Eviction" can be found at her web site at synergyprofessionals.com synergyprofessionals.com and at Amazon.com Amazon.com
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