Tips for First Time Home Buyers
Buying your first home is an exciting yet daunting experience. Here are several easy steps you can follow to simplify the process and get you on the way to finding your perfect dream home.
Inside the Home - Start by making a list of items within the home that are most important to you. Examples include number of bedrooms, number of bathrooms, kitchen features and other required amenities. This list should be things that you cannot compromise on due to your lifestyle. Second, make a list of items that things are "nice-to-have". This list should be other desirable features within the home that you may compromise on later if necessary. As you view homes on the market, compare each home with two your lists. Using this approach, you will soon find a starter dream home that fits your lifestyle and family.
Outside the Home - When looking at a home, looking outside the home is equally as important as looking inside the home. If you have children, be sure to assess the school system of the neighborhood. Visit the school and talk with the teachers and principal. Research crime rates in the area as this may affect your lifestyle and the resale value of your home. Assess development work and future city plans to ensure you understand what will happen to the surrounding neighborhood and the extended area over the next several years. If the city plans to construct a water tower in the neighborhood, you need to evaluate the impact this tower will have on the resell value of the home before you consider making an offer. If you find a beautiful starter home sitting on a nice cul-de-sac that will be flanked by new four lane street in five years, you probably want to look elsewhere. Further, if there is a nearby company that will be closing a significant office nearby in two years, home values could trend downward as people leave to find new jobs.
Consider Comparables - It's also imperative that you look at recent home sales in the neighborhood. Evaluate the cost per square foot of each recent home sale in the area and compare this to the cost per square foot of any home you are considering. You should also consider supply and demand in the neighborhood or suburb. Supply is the number of homes that are for sale in the neighborhood you are considering. Demand is the number of people looking for homes that area. Supply is relatively easy to determine, but demand is more difficult to assess. As supply increases and demand decreases, prices in the area trend downward. Conversely, as demand increases and supply decreases, home prices trend upward. Location is one of the most important factors to consider as you think about the future value of your home. Great locations are in high demand, but you can find affordable homes with good future resale value if you are patient, understand comparables in the area, and consider supply and demand within the neighborhoods.
Get Expert Advice - It is highly recommended that a first time home buyer use a real estate agent. An agent has the professional knowledge and experience to find your dream home. They have access to market and home comparable data that is otherwise difficult to obtain. A good real estate agent can help you assess both supply and demand for homes in the areas you are considering. They also will have developed contacts over the years that they can share with you. Whether you need a plumber, inspector or appraiser they will be able to put you into contact with individuals they trust. As your agent, they are acting on your behalf and will protect your interests.
Use a Mortgage Broker - Many couples and individuals rent because they do not think they can qualify for a mortgage or come up with a sufficient down payment. In most cases this is a myth. Most lenders have loan programs tailored specifically for first time home buyers, those with little cash down and those with less than perfect credit histories. Seek out a good mortgage broker. They will have access to mortgage programs from multiple competing lenders. While you may have a great relationship with your local bank mortgage lender, working solely with him or her may limit your capabilities and the loan programs offered to you. Your real estate agent should be able to recommend a good mortgage broker. You can also search online.
Knowing your home requirements, properly assessing home market comparables and assembling a great team of helpers will ensure your success and reduce your stress as you search for your first home.
About the Author:
Kristi Cole is a writer for http://www.inhomeimprovements.com