Top 10 Things You Should Know As A First Time Home Buyer

Being a first time home buyer can be extremely overwhelming.  There is a lot to learn and many factors to consider when purchasing a new home.  You have to think about the house your are going to buy, your finances, how to get a loan, if the home is a good investment and so much more. To help you through the process, we have put together top ten things you should consider as a first time home buyer.

1 – Renovations

You may want to find a home that is already in perfect move in ready condition.  However, its a great idea to find a place that is not in move in ready condition, but has a great layout.  This will allow you to renovate the home to your liking.  This will also ultimately cost you less than if you had found a place that was move in ready.  Also, if you pay $25,000 to renovate the kitchen you will make back double that amount when you sell the home.

2 – School District

You may not have kids yet, but which school district the home you are considering falls in should be a factor to consider.  Living in an area with a school district in high demand will help raise your property value.  These homes typically do well during resale.

3 – Location VS. Space

Before you even begin shopping for a new home, decide if location or the home is more important.  If you absolutely have to live in a specific neighborhood then make sure to only look there.  If neighborhood is not that important to you and the space matters most, then you will be able to conduct a broader search.

4 – Down Payment

Make sure to set aside savings specifically for a down payment for your home.  If you provide the seller with a down payment during your offer, the offer will be more appealing.  Putting a down payment is a good idea because it minimizes your risk and lets you start off with some equity.

5 – Home Inspection

When your new home is in contract, you will have to conduct a home inspection.  Make sure that you find an inspector who will observe every single corner of your new home.  If you find any issues during inspection, you can negotiate a price reduction.  You can also ask for the the damage to be fixed.

6 – Low Balling

Many times, home buyers take a chance and low ball the seller.  They do this because the house might be on the market for a long time and that the seller is desperate to sell the home.  This is not always a great strategy. By low balling, you can miss out on a great home if the offer is not accepted.  A seller may not be desperate to sell and may reject your offer.  Or the seller might have another offer come in at the same time that is better.

7 –  Home Owners Association (HOA)

If you are buying a home in a community, you will have an HOA.  Make sure to read the HOA documents thoroughly.  There may be some conditions and restriction in the documents that you might not be OK with.  Also, you should talk to other residents in the community to see how good the HOA is.

8 – Bank Loan

You will have to apply to the bank for a loan to purchase a new home.  Depending on this loan, you can bid on your future home.  The best thing you can do is not bid the entire amount you are pre-approved for in your loan. This can help you save money and get a better interest rate. When you don’t spend all the money that you qualify for in your bank loan, you give yourself more options.

9 – Commitment

Buying a home is a big commitment, make sure that you know the commitment you are getting yourself into.  You have to be financially and personally ready for the big commitment.  Not only will you have a mortgage payment to pay, but you will have property taxes, HOA fees, homeowners insurance, and utilities.

10 – Bidding

Sometimes getting creative on your offer is needed.  It isn’t unusual to add a note on your offer saying that you will pay an additional amount over any other competing offer that comes in on the home.  A creative bidding strategy can be very effective.  Also if you your bidding strategy is not working, then you have to rethink your strategy.  You may have to think that if you want the sellers to help with closing costs then you will have to make sure to come as close to their asking price.  You have to be smart and flexible in your bidding strategy.

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