This post brought to you by National Association of REALTORS®. As always, all opinions are 100% my own.
Before we bought our house two years ago, I had no idea what was actually involved in the home-buying process. I sort of assumed we would go look at houses, find one we loved, and buy it! In reality the process was sort of like that, but with about twenty additional and important steps thrown in there as well. 🙂
Luckily we had a Realtor® to help guide us through the whole process, and we found the perfect home for us! So today I’m going to share 11 important tips for first time home buyers, and hopefully it’ll help you if you’re starting on the path to buying your first home!
11 Important Tips For First Time Home Buyers
There are TONS of tips out there for first time home buyers; just Google it and you’ll be overwhelmed with information! But these 11 tips are the ones that I think are the most important for a first time home-buyer to really know and understand.
1. Think long term
What are your plans for this house? Do you think you’ll be in this house for three years, ten years, twenty years? Are you planning to have kids (or more kids) and will you need more room within the next few years? If you move out of the house, will you sell it, or try to rent it out? All of these are important questions to think about before you really get started searching for a house. A house is a huge investment, and you want to make sure that it fits into your long term plans: you don’t want to be “stuck” with the wrong house a few years down the road!
2. Find a Realtor® to help you
You can find a TON of information about real estate and houses available for sale in your area online, and it may be tempting to just browse some websites and DIY the whole home-buying process, but it’s not that simple! Realtors® have a ton of experience and knowledge that makes them an invaluable asset when looking to buy a house.
This is their job, so they know all the ins and outs of the whole process. They can also do a lot of the legwork for you so that all you have to do is show up, tour the houses, and make a decision! And they are a great resource as you are looking at houses. As first time home-buyers we didn’t have anything to compare against, so it was super helpful to have a Realtor® to offer advice and insights about each house we visited! And once you’re near the end of the whole process, they can help you negotiate; they’ll know when and how far to push, and when to back down.
Visit Get REALTOR® to find a Realtor® near you!
3. Figure out how to get out of your old place
Many first time home buyers will be moving out of an apartment and into their first home, which means they probably have a lease. Unless the fates are perfectly aligned, or you have amazing planning abilities, the day you close on your first home will probably not be the same as the last day of your lease. So get ready for that; figure out what your options are for getting out of your lease. See if you can negotiate an early exit from your lease, but be prepared for additional costs. Typically, you should expect to cough up at least 1 and a half months of rent and give up your security deposit, but this can vary wildly. Don’t be surprised!
4. Stockpile some cash
Make sure you have access to a lot of cash before you start the whole process. I was totally surprised at how much cash we had to spend to purchase our house. I sort of assumed most of the costs would be rolled into our mortgage, but you need cash on hand for the down payment, home inspection, appraisal fee, earnest money deposit, and closing costs (which usually also include upfront HOA fees, property taxes, and homeowner’s insurance). Closing costs can be as much as 2-6 months of your new mortgage payment, in cash. (Quick note: by “in cash” I don’t mean you literally have to hand over a stack of hundreds; usually closing costs are paid via certified check or wire transfer. I just mean that you need to have access to this much actual money in a bank account; you can’t pay for closing costs with a credit card!)
5. Expect a lengthy process
The important thing to remember is that this isn’t necessarily and quick and easy process. The national average for house hunting is 12 weeks; we searched for six months before we found our home. You might be lucky and find your perfect home the first day, but if you don’t, don’t get discouraged!
6. Be practical and remove emotions
Once you’re ready to start actually looking at available houses, you have to try to remove emotion from the equation. Before you start visiting houses, sit down and make a practical list of your “must-haves” and “nice-to-haves”, then print that list out and take it with you to each house you visit. That way if you show up at a house and it doesn’t have all of your “must-haves” you can easily cross that house off the list. Remember, though you will hopefully love your home once you find it and live in it for a while, homes don’t have emotions; you aren’t hurting a house’s feelings by not choosing it. It will be perfect for someone, so just leave it on the market so that they can find it!
Another place where you should try to remove emotions is in the staging of the house. It’s definitely true that a nicely staged house will look better than one that is completely bare or is still being lived in. But try to take the staging out of the equation and focus instead on things like the layout and other practical aspects (are there enough outlets, are they in useful places, how much closet space is there, etc.)
7. Learn about the neighborhood
The house you buy is only part of the equation; the neighborhood is another big part! If you have kids, are there good schools nearby? Are there grocery stores nearby? Are they large chains or small markets? Who lives in the neighborhood; is it mostly families or singles? Are there apartment complexes or just single family homes?
8. Get educated about the financial aspects
This one is super important! If you don’t know how mortgages work, educate yourself! There are tons of great resources online to help you learn about the whole mortgage process. And make sure you find a good mortgage broker. Get recommendations from your friends and family and Realtor®.
Figure out how much of a loan you qualify for before you get too invested in anything. And make sure you look into things like first time home buyer grants and see if you qualify for any of those!
9. Update your budget
There are two types of expenses that can sort of sneak up on you: costs associated with the home-buying process and costs associated with the house itself. Costs that are part of the home-buying process are things like appraisal fees, home inspection fees, and closing costs (which usually include the initial payments for homeowner’s insurance, HOA fees, and property taxes).
But after you’ve bought a house, there are several other ongoing expenses that you need to account for. The most obvious new expense you will have is your mortgage payment, but it’s not just principal and interest. Your mortgage payment can also include property taxes, homeowner’s insurance, and private mortgage insurance (PMI); your monthly payment may be much higher than the cost of the mortgage alone. Also consider the cost of basic home maintenance (gutter cleaning, radiator or HVAC service, etc.) and any larger repairs or upgrades you’ll need to do in the next few years. And don’t forget about smaller things like an increased gas budget if your new house is further away from your work, etc.
10. Buy your house!
Once you’ve found the perfect home, it’s time to put in an offer! This last phase of the home-buying process is another place where a Realtor® can really help you out. They have a lot of experience and knowledge and can help you figure out how to make a competitive offer, whether to make your offer contingent on certain repairs or changes, and how to negotiate if your offer isn’t accepted straight away. Don’t get discouraged if your offer isn’t accepted; on average you’ll put in 3 to 4 offers before one is accepted. My husband and I put in offers on four different homes and the first three weren’t accepted!
When your offer is accepted, make sure you get a home inspection (a Realtor® can give you referrals). Once you’re ready to close, a Realtor® will be a huge help! They can help get everything ready so that all you have to do is show up at closing and sign about 8000 sheets of paper. 🙂 Then they’ll hand you the keys, and you’re a homeowner!
P.S. Make sure to get the locks changed as soon as you get the keys!
11. Keep up with regular maintenance
This is one of the most important tips for first time home buyers: keep up with regular maintenance on your house! If you were living in an apartment previously, you may have gotten used to calling the super or the landlord when something broke, but now it’s all on you! Invest in a good set of tools so that you can fix small things like loose hinges or leaky toilets. And be sure to keep up with larger things like gutter cleaning, radiator or HVAC servicing, etc. throughout the years. Houses are complicated, and the sooner you fix a problem with your new house, the less time there is for that problem to spiral completely out of control!
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Disclosure: I received compensation from National Association of REALTORS® in exchange for my participation in this campaign. But these tips are 100% true and we were so happy to have the help of a Realtor® when we bought our house. All opinions in this post are 100% my own. I would never write a post about something I didn’t think was useful or interesting for you guys, and Practically Functional will only publish sponsored posts for companies or products I love and believe in! 🙂