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Tips for First-Time Home Buyers


1. Pay Down Debt and Build an Emergency Fund

Owning a home is expensive- even if your monthly house payment will be similar or cheaper than your current rent amount. That’s because when you own a home, you’re responsible for all the maintenance and upkeep costs. And those can add up fast! So, before you even think about buying your first home, make sure you don't have a ton of debt and have an emergency fund of three to six months of expenses in place.

When you get into a home with few monthly payments and have a nice big emergency fund, you’ll have the cash to pay for huge expenses that suddenly come your way. You’ll be able to love the life you’ve set up for yourself because stress and worry won’t be part of the equation!

2. Determine How Much House You Can Afford

Before you get emotionally attached to a beautiful house, check your monthly budget to determine how much house you can afford. You need to leave room in your budget for other things, so make sure your monthly housing costs (including property taxes, insurance, etc.) are going to need to be around 25% of your monthly take-home pay.

Don’t forget that property taxes and homeowner’s insurance will affect your monthly payment. You’ll also need to factor those numbers in before settling on a maximum home price.

Since property tax rates and the cost of homeowner’s insurance vary, check with Kay and your insurance company for estimates to calculate how much house you can afford.

3. Get Preapproved for a Loan

Get prequalified for a loan and take the extra time to get a preapproval letter before you start your home search. Preapproval shows sellers that you’re a serious buyer, which is a great way for first-time home buyers to get ahead in a competitive market.

To get preapproved, your lender will need to verify your financial information (proof of income, taxes, etc.) and submit your loan for preliminary underwriting. 

4. Find a Home for Sale in Your Price Range

Find homes you like online and send them to your real estate agent so they have a good idea of what you’re looking for. Then they can use the multiple listing service (MLS) to find homes that meet your criteria in your desired areas.

An MLS is created, maintained and paid for by real estate professionals to help buyers view the largest pool of properties for sale in the marketplace. Real estate agents also provide valuable market expertise and can help you find great deals on homes as soon as (or before) they’re listed.

5. Research Neighborhoods for Best Fit

After you’ve found some homes for sale in your price range, be careful not to make a decision based on the property alone. According to a NAR survey, 78% of home buyers believe neighborhood quality is more important than the size of a home. And 57% of buyers would opt for a shorter commute over a larger yard. So make sure you factor neighborhood quality and location into your decision.

Ask your real estate agent for information on crime rates and the quality of schools around your prospective neighborhoods. Visit the neighborhood at different times and days to check for traffic conditions, noise levels, and if people are comfortable being outdoors. Only choose a neighborhood that you and your family feel good about.

6. Make a Competitive Offer 

Let’s say you found the home you want and can afford. Since you’re already preapproved for a loan, you’re ready to make an offer. If you’re a first-time home buyer, it may be hard to know how much you should offer. That’s when you can rely on the expertise of your real estate agent.

Ask your agent to help you make sure your offer is competitive but also within your budget and the home’s value. Be careful not to make an impulsive offer that’s higher than you can afford just to knock out the competition. A personalized letter might help your offer stand out among multiple bids in a hot market.

7. Prepare for Closing

Once a seller accepts your offer, the closing process will begin. Keep things running smoothly by knowing what to expect when closing on a house. The average closing process takes approximately 31 days, which gives you plenty of time to tackle closing items. A real estate agent will schedule the remaining steps, from home inspection to final walkthrough, and keep you informed about any road blocks.

As you prepare for closing, make sure you read every document and ask your real estate agent to explain anything you don’t understand—especially before you sign the official contract for the home transaction. It’ll be your signature on the documents, so you’ll be the one responsible for anything you sign.

Ready to Get Started?

Your first home is a big purchase—maybe even the biggest one you’ll have ever made up to this point in your life! Because of that, you don’t want to risk messing this up. A real estate professional will take the weight off your shoulders by helping you find a home, negotiate a deal, and see the process through until closing. 

Kay Martin has been in real estate for over 13 years. Let her use her expertise and experience to make the purchase of your new home an easy one. Call her today 256-710-9745 to get started!


Kay Martin
Kay Martin