1. First things
first, find a Realtor with experience that can help you navigate the market.
You may think that you can find your own listings and book showings with the
seller’s real estate agent, but it is in your best interest to have a Realtor
who is working on your side alone without any conflict of interest or loyalty
to the seller. Not only will it not cost you anything (the seller typically
pays real estate agent fees upon closing), but you’ll know that all your bases
are covered. One big mistake as a first time home buyer is to try going through
the seller’s real estate agent. Find a Realtor that you click with who can help
alert you to new listings that you may not know about yet, research comparable
homes, advise you on what kind of offer to make, help you negotiate the deal
and help you navigate through the sea of paperwork and legalese. You’ll be
grateful you did!
You may think that
you can find your own listings and book showings with the seller’s real estate
agent, but it is in your best interest to have a Realtor who is working on your
side alone without any conflict of interest or loyalty to the seller. Not only
will it not cost you anything (the seller typically pays real estate agent fees
upon closing), but you’ll know that all your bases are covered. One big mistake
as a first time home buyer is to try going through the seller’s real estate
agent. Find a Realtor that you click with who can help alert you to new
listings that you may not know about yet, research comparable homes, advise you
on what kind of offer to make, help you negotiate the deal and help you
navigate through the sea of paperwork and legalese. You’ll be grateful you did!
2. Get
pre-approved for a home loan before you start looking. Many homes that go
on the market will go quickly and you’ll want to put a bid in right away.
Having a pre-approval will make your offer more appealing because the seller
will be able to see that you are eligible for financing. Ask around for
recommendations on a lender and meet with a few before deciding on one. Cover
what their rates are and compare them against one another. Also beware of
making any big purchases or racking up a lot of credit card debt as these
things can cause your loan to be declined even after you’ve been pre-approved.
3. Don’t buy
based on cosmetic appearance. Just like a granite countertop and new
bathrooms can quickly reel in a buyer, pink tile in the kitchen and shag green
carpet in the bathroom can be a turn off to many buyers. Don’t overlook the
potential of a home based on the cosmetic appearance. See potential, not paint
colours. Similarly, don’t buy a home because it looks nice and new. There are
many homes on the market that have been quickly flipped for a profit and there
may be major issues hiding underneath that shiny new tile. Your “dream home”
may not be the dream it appears to be. Don’t let cosmetics sway you!
4. Get to know
the neighbourhood and the neighbours. The home buying process is the
limited amount of time that people typically spend “trying out” the house
before buying it. We spend more time test driving a car than we do checking out
a house before we buy it. Get to know the neighbourhood, check out the school
district, pay attention to the neighbours and the crime rate. Is there a dog
next door that barks all day and night? Pay attention to the neighbours and the
activity in the neighbourhood. You can even go as far as talking to the
neighbours and asking questions.
5. Beware of
bidding wars and know your top number. It can be so easy to get caught up
in a bidding war and before you know it you’ve over-extended yourself and your
budget. A house is a long term investment and you don’t want to spend the next
15–30 years making payments that are outside of your budget. Just because the
bank approves you for a certain number doesn’t mean that it’s a comfortable
number for YOUR budget. Know your number and stick to it. Don’t let the
excitement draw you in and get you bidding more than you should be.
6. Be organized
and ready for a boat load of paperwork. One thing that was a huge help to
us in navigating the sea of paperwork was having a Realtor. They helped us
navigate everything and interpreted all of the legal forms that looked like
Greek to us. There were so many expenses that we didn’t understand and by
having a Realtor we were able to get thorough explanations of everything. Not
only that but a Realtor can help you navigate current laws pertaining to your
local area. We bought a home in the country and we weren’t aware of the current
laws for the septic system. At closing it almost became an issue that caused
our sale to fall through however having a Realtor that knew what he was doing
meant that he was able to negotiate a deal with the seller so our septic could
be made compliant and our deal could close. He was essential to our successful
purchase of our dream home.
7. Find a home
inspector to inspect the home before you buy. We were always blessed with
family members that had a myriad of talents from construction to electricians
to plumbers so we would bring them along to conduct our home inspections. You
can hire an experienced home inspector as well. They can uncover major issues
that could save you from big expenses down the road. It can also be useful in
the negotiation process. If the home requires major repairs then you can
negotiate a lower price on the home or ask the seller to pay for the repairs.
8. Think ahead:
“longevity in home
buying”. Even
though you may not have kids yet, or a dog, or fill in the blank, try to think
ahead to 5 years down the road or 10 years down the road and envision how the
house would function for you in those situations. If you are strictly buying a
starter home then think to 5 years down the road and make sure you can last in
it at least that long if you need to. By thinking ahead you’ll save yourself
the pain of having to move more often than you want to in order to get enough
house to suite your current lifestyle.
9. Secrets to
look for in your home buying process: When you are making monthly rent
payments it can be easy to compare that to a mortgage payment and wonder why
you are throwing your money away on rent each month. While it’s true that when
you rent you aren’t gaining anything in return, it’s simply not wise to compare
it to monthly mortgage payments. There are many costs associated with owning a
home that you wouldn’t consider if you were renting. These include property taxes,
repairs and maintenance, utilities, home owners association dues, upgrades and
renovation costs, etc. Make sure you adequately budget for these costs and can
afford the mortgage PLUS these costs comfortably.
10. Quench your
emotions and go with your instinct and smarts instead. The moment you let
your emotions get involved in the home buying process is the moment you will
make a mistake. Try and remain objective and avoid falling in love with a place
before you’ve carefully considered everything. From the structure of the home
to your own budget, you need to keep emotions out of this deal and remain smart
and objective. Don’t let those emotions out until you’ve closed the deal or you
risk making decisions that are based in emotion instead of common sense.
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