As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.
You’re finally ready.
Well, at least you think you’re ready.
At the very least, you’re starting to entertain the idea of purchasing your first home. But you have questions, and you’re not sure where to turn to for advice – look no further, because we talked to a couple of real estate agents to get some helpful advice with first time home buyers (FTHB) in mind.
Real estate agents Joe Delia and Rosanna Rivera both agree that the first and most important step a FTHB should take is to get preapproved through a mortgage lender. Once you have a preapproval letter in hand, you can do a couple of things.
“The first step is getting preapproved through a lender in order to better understand what you can afford and what programs your credit allows you to qualify for,” Delia explained.
“Once you understand that, then you can get in touch with a (real estate agent) to establish your criteria you’d like in a home.”
Rivera adds that having a preapproval also will help a house hunter “identify their priorities.” Once a FTHB has an idea how much they can spend, they can narrow down which of their “must haves” match the amount they were preapproved for.
When getting your preapproval from a lender, it’s also a good time to get information about rates and your options for different type of loans. Delia recommends to “Talk to your lender as to what your goals are with your mortgage and lean on them for advice. Try to be open-minded. A 30-year fixed (mortgage) doesn’t always make sense.”
Rivera agrees, saying that you should “consult with your banker on the different loan programs and down payments.” She also suggests making a spreadsheet to compare all of the different programs.
Find an Agent and a House
After you get your preapproval, the next thing to do is find an agent and start looking at homes as soon as possible. “The homes that you see today may not be around tomorrow,” Rivera warns.
Ask friends and family members if they would recommend the real estate agent they used. If you don’t have any recommendations, Delia suggests to “do your homework” and find someone that “has high ratings online.”
Most likely you have heard the house hunting cliché “Location, location, location.” And with good reason – it’s the most important thing to keep in mind when looking at a home. It’s the only thing you really can’t change, and Rivera encourages all of her FTHB to be sure to drive around and check out the area’s amenities. “Is the home in close proximity to hospitals, grocery stores and highways? Good schools? All of these are very important.”
She also suggests that when buying a home, it’s important to keep in mind how easy it will be to sell down the road.
It’s important to remember that your preapproval letter is only good for 90 days. If your house hunt takes longer than that, you’ll need to get your preapproval letter renewed.
If you don’t find a home within that first 90 days, it’s OK. Taking some time isn’t unusual. Rivera advises FTHB not to give up. “We will find a home, it just takes time.”
Make an Offer
Once you do find a home you want, it’s time to put in an offer.
When putting in an offer, Delia warns “Don’t get caught up in the emotions of negotiations. Follow your agent’s advice but stay true to your values.”
It’s also important to make an offer that is truly your “very best” and to “submit your offer as if there are multiple offers.” It will help avoid feeling discouraged if your offer isn’t accepted, because you’ll know that you offered the best you could.
Get a Home Inspection
Best-case scenario, you won’t have to worry about that and your offer will be accepted. If so, something that you’ll have to do before closing is to get a home inspection. You’ll hire a professional who will come out and ensure that there aren’t any major issues with the house. They’ll also let you know of non-major things to keep an eye on.
During the inspection it’s a good idea to ask questions and learn as much as you can. You’re paying for the inspection out-of-pocket, so make sure to get your money’s worth.
Delia and Rivera recommend paying attention to key info during the inspection; namely, the lifespan of major things like the roof, air conditioner, furnace, plumbing and electrical.
Delia says “People get caught up in kitchens and bathrooms…” but they should more focused on “the age of the mechanicals.” In addition to finding out their age, find out how much longer you can expect them to last and how much it costs to replace them.
Time to Close
If all goes well, you’ll finally be ready for closing. This is when Rivera suggests to a home buyer to “compare secure homeowners insurance” and “decide if they want to order a home warranty.”
After closing, there are some small things to keep in mind, like changing the locks and sending out new address notifications.
The house hunt can be long and frustrating, and there may even be times when you’ll want to give up. But with a good agent and a trusted lender, you’ll be able to get through it. You’ll be glad you did, because as Rivera likes to remind her clients “Buying a home is one of the most important and rewarding decisions … a true American dream.”
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.