We are buying a house! If you have gone through the home buying process, you understand just how stressful it can be. My husband tried to warn me, but nothing prepared me for the overwhelming emotional rollercoaster that house hunting has put me on. I have learned so much since the process began; my head is spinning! I thought I would share the top 7 things a first time home buyer needs to know.
Location, Location, Location
Everyone says that, right? I cannot begin to tell you how true it is. We have been browsing the market for aaaaages, using primarily Zillow.com and Realtor.com to narrow down the location we wanted in Southern New Hampshire. While searching, we have discovered that, despite a house in one town being listed as less than a home in another town, the property taxes could potentially make the home’s monthly mortgage payment more expensive on the home that was initially “cheaper”. Say what?? Do your research on the area and put together a chart like the one my husband put together to help narrow down your search perimeters. Based upon what we have seen in our research, the better the school system, the higher the property taxes in the area. This doesn’t mean that an area that has lower property taxes has a poor school system. Zillow has a section that shows you what the school systems are rated, and trulia.com will give you more detailed information if you need it. Obviously, we all want to live in an area with great schools when we have children, but you don’t want to stretch yourself super thin every month for that 9/10 when an 8/10 rating is equally as good in the grand scheme of things. To create this diagram, I found a town breakdown for the county that we decided on and then did a search on the previous years property tax rate for the same county. To take things a step further and help narrow things down more, you can use Zillow.com or Trulia.com to find school ratings.
Don’t let a house break your heart
I cannot begin to tell you how many houses we have looked at online and fallen head over heals for only to show up for the viewing and want to walk out as soon as we entered the doorway. At one open house, I couldn’t even finish the walk through because I was extremely uncomfortable as soon as we walked through the door. A home inspection is a very smart move because there might be underlying issues that you just can’t [afford to] live with. If the home was recently renovated, a home inspector can tell your if it was done to code. Fixing a leaking roof that you might’ve missed could be a $20,000 fix and most people don’t want an expense that large when purchasing their first home. Scope out the neighborhood. We were head over heels for a house but after speaking with some of the neighbors we found out that there weren’t any other children in the neighborhood, that was a must for us.
Shop Around For Lenders
As soon as you are comfortable with moving forward from the browsing phase, to the shopping phase, meaning you’re purchasing within 6 months or so. When you begin looking for lenders, ensure that your finances are in order. Just like you can shop for lenders, you can shop for insurances too. Don’t be afraid to request quotes from multiple sources before making your decision. It’s best to be as informed as possible. I always thought that you had to have a huge down payment in order to purchase a home but there are plenty of lenders that can offer a zero down payment, or a very little one. Keep in mind that a down payment is an investment in your future, not money thrown away like the money you are paying in rent. My husband has spoken to 3 or 4 different lenders and the rates/closing costs of each vary drastically. This is highly important when calculating your monthly payment. Property taxes as well as your home owners insurance will need to be factored into the cost of your monthly mortgage payment. Just because the lenders says that you can afford a certain amount of home, does not mean that you really can afford that home.
Secure an agent
No one knows the housing market better than a real estate agent. As soon as you have gone through the pre approval process with your selected lender, contact a real estate agent as you continue house hunting. When meeting your agent, bring your pre approval paperwork as well as a list of your needs and wants in your new home. When compiling these lists, focus on what you are looking for in a house. Ask yourself what you don’t like about your current home when compiling your lists. You do not have to work with the first agent you speak with. Meet with them in person and get a feel for how you will work together; you’ll want to work with someone who is focused on your best interests and not just their paycheck. My husband and I were lucky enough to find a real estate agent that treated us as if we were the only clients she had and were top priority. If she was unable to attend open houses with us, she called ahead to make sure the seller’s agent were aware we were coming. Every time, we were given the full attention of the seller’s agent because they knew we were serious about buying.
Consider the market when making your offer
When you find the home that you want, don’t insult the sellers by coming in with a very low offer. The typical rule of thumb is for you to stay within 5% of the home’s asking price. However, you can ask for concessions to be made. As bizarre as it may seem, you can request things like having the seller pay off a credit card for you. If you love the way their sectional looks and feels in the living room, maybe they will include it with the house! There are also the “normal” requests; closing costs, including appliances, etc. Don’t be afraid to ask, the worst that they can say is no. If you are unsure about whether or not your requests/offer is unreasonable, talk to your agent. They live and breathe real estate and have seen it all; I doubt you could totally shock them.
Be prepared to make sacrifices
Can you wait on replacing all the old hand me down furniture if it means you can afford “THE ONE”? If you are a DIY addict like me, a stepping stone home (buying with the intention of selling in the future) might be perfect for you! If it’s a stepping stone home, then make sure the home will appreciate in value with minimal money put into it. For example, we looked at a very contemporary home that was completely renovated on the inside and just needed some TLC on the outside to add curb appeal. Unfortunately, it was in an area that hadn’t appreciated more than $10,000 over the course of a decade. Pick your agent’s brain to find out what will add the most resale value in a home.
Most importantly, DO NOT SETTLE!
Buying a home is a huge investment and one that you want to be happy with long term. New homes come on the market every single day and you will typically find yourself in what they like to call a “buyers market” during the fall and winter months. This means you’ll have a less competitive shopping experience because the inventory exceeds the demand. Who wants to move when it’s snowing outside? Not me, been there, done that. Keep an eye on the market; explore both existing homes and new construction developments. My husband and I discovered that we could build our very own custom home for the same price we would have to pay to purchase an existing home that needed some TLC. Seems like a no brainer, right? 😉