13 Things First Time Home Owners Need to Know
Posted By Macey Farnsworth on March 25th, 2019
According to 2018 statistics from the National Association of REALTORS, a third of home sales involve first-time buyers. If you’re a first-time home buyer, you may quickly find yourself overwhelmed by the experience.
It may seem as though everywhere you turn, there’s more and more information about which you haven’t learned. Fortunately, we’re here for you. Below, you’ll find 13 things that first-time home buyers need to know.
1. Definitions of Common Terms
Real estate agents, mortgage brokers and other people involved with the home buying process will likely use terms that you’ve never heard of before.
The legal website NOLO provides Real Estate Terminology for Home Buyers, which should keep you well-informed.
2. How Long the Process Takes
The length of time it will take you to buy your home will vary. However, you can typically expect to spend a month or two shopping for homes. Once you find your dream home, you’ll spend anywhere from two weeks to two months closing the deal.
Upon closing, you will likely need to make your first mortgage payment within six weeks.
3. Location Matters
When you first start looking for a home, you’ll likely be concerned with both location and space.
Both are important, but many people find location far more critical, especially if you plan to be in your home for a while. Consider things such as:
- Crime and safety reports
- The schooling system
- Your commute to work
4. Look for Signs of Neglect
Once you start looking at homes, one of the most obvious things to see are signs of neglect. For instance, look to see if large appliances have rusted. Take notice of whether the previous owners have left the house messy or dirty, which could be a warning sign of potential problems down the road.
You may also see signs of neglect on the exterior of the building as well. For instance, if bricks are crumbling or the shingles on the roof are not well-maintained, the current owners may have let the house go.
Lastly, check whether there are numerous houses for sale on the same street or in the same neighborhood. If there are, there could be a more significant issue with the location or local economy.
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5. Look for Signs of Moisture Problems
Moisture could lead to mold, which is not only hazardous to your health but quite expensive to eliminate as well. Consider bringing a moisture meter with you when you inspect a home. This could tell you whether there is a problem in the house.
Furthermore, don’t be afraid to trust your senses either. If you notice musty odors in the home, this could be a sign of mold.
6. Evaluate the Landscaping
The exterior of the home can matter just as much as the interior. If you need to overhaul the existing landscaping, your costs will add up quickly. If you don’t have much room in your budget for renovations or upgrades, keep the garden and lawn in mind as well.
Poor landscaping will quickly become an eyesore and could prevent you from falling in love with your new home.
7. Determine If You’ll Need Renovations
When inspecting a home, try to determine what renovations you’ll need to have done. Ask the current homeowners to provide a list of existing repairs and a list of contractors who performed the work.
If your new home needs extensive renovations, you could potentially lower your closing cost.
8. Ensure You’re Ready to Commit
Your first home is likely the most significant investment you’ll have made to date. Your monthly costs could rise considerably, especially when considering that you’re now responsible for replacing anything that doesn’t work.
Make sure that you’re comfortable with your home before buying.
9. Pad Your Down Payment
Adding money to your down payment could potentially improve your mortgage rate. If you are flush with cash, consider putting it toward your down payment.
Your home is not a bad investment and paying it down beforehand will pay dividends in the long run.
10. Invest in a Quality Inspection
The money you spend to hire a quality inspector will be well worth it. Before closing, you could require the previous homeowner to pay for mistakes, no matter how minuscule.
If not, you’ll acquire these expenses upon closing.
11. You Can Always Negotiate
Don’t be afraid to negotiate with the current owners of the home, even after the inspection. Often after examination, you may be able to knock the total price of the house down by a few thousand dollars.
Doing so puts cash in your pocket that you could put toward a down payment or renovations.
12. Monitor Your Bid Strategy
If you fall in love with a home, you may need to get creative with a bid strategy.
For instance, you could tell your realtor that you’re willing to go $1,000 over any offer up until a pre-determined price point. Doing so could help ensure that your bid is continually the most competitive.
13. Leave Yourself a Buffer
You always want to have enough money to up your final offer. Too often, people bid their maximum offer and don’t have additional cash to increase the offer or renovate the home.
You should not buy a house that will strap you for money or put you in a dire situation should an emergency arise.
Be Prepared Going into Your Home Buying Experience
If you’re a first-time home buyer, the experience can be quite overwhelming. However, preparation can go a long way. With the above 13 tidbits, you should be much better off going into your first home buying experience.