As a first-time home buyer, there’s many unknowns when going into purchasing a new home and even more mistakes that can be made along the way.
A few common discrepancies that happen along the way include incorrect down payment size, unpreparedness for additional costs (such as closing costs), and even budgeting for a home that’s outside of your means.
So to help you avoid the common first-time home buyer errors, here’s a few tips that will guide you through the process.
Get A Pre-Approval Letter From The Bank
We strongly advise getting a pre-approval letter from your bank prior to beginning your search. While this isn’t necessary to get started, it provides many benefits in your journey ESPECIALLY if you’re a first time home buyer.
The benefit when searching on your own is you have clarity on how much house you can afford. Since your pre-approval comes with assessing your finances, credit checks, etc., you have a clear understanding of what you can comfortably afford.
The benefit when working with your realtor is that they are aware of your purchasing power. With this, they can save you time and energy by not showing you properties that are out of your means or don’t accept the specific loan you’re approved for.
The benefit when submitting an offer is more negotiating power and preference. If it boils down to your offer that’s lower than another offer from a buyer who ISN’T pre-approved, the seller is more likely to work with you due to having that letter. Sellers like peace of mind, so knowing you can afford the home and will pay makes them want to negotiate with you before others.
So in a nutshell, getting pre-approval for your mortgage has many benefits to you as a first-time home buyer that can alleviate unnecessary stress down the line. That’s why this tip is the first and arguably the most important in our list.
Understand Your Needs vs. Wants
Another tip that saves time, energy and even money is understanding your needs vs. wants prior to beginning your search.
We see this happen often with a first-time home buyer where they walk into a home search wanting absolutely everything in their home and under their budget. Often times a lack of understanding what’s actually important and what’s just an additional benefit leads home seekers feeling discouraged or overwhelmed in their search.
This is why getting extremely clear on what you NEED and what you WANT can be a game changer.
While everyone’s needs are different, writing out what you will not budge on (i.e. school zone, commute to work, yard for pets, etc.) is important so you can see what you’re actually looking for in a home. Light fixtures can be changed out. Wallpaper and paint can be adjusted. Carpet can be swapped out for tile.
The cosmetics of the home are important, but items such as your location, actual lot space, number of bedrooms, etc. are a bit harder and more costly to adjust. Focus on the core of what you need first and then get into the nitty gritty details to help narrow down your top options. Trust us, doing it this way will ensure your home search is efficient and successful.
If You Love It, Submit An Offer
You’re searching for your dream home, so when the property that melts your heart comes your way be sure to submit the offer. Why? Waiting can cause someone else in the market to submit an even better offer.
In real estate, there aren’t any back up options if you don’t get the first, it’s either you get the home or you don’t.
Submitting an offer initiates the offer negotiation stage of the home buying process. The seller may come back with a counteroffer and you may have to go back again with your final offer. With that, we say it’s important to at least get that process started so you’re in the front of the “competition”.
Additionally, this process of negotiation is not binding. At this stage, you’re still able to walk away in the event that you change your mind or find another property. Walking away once the seller accepts and you sign your offer is when things get tricky and sometimes costly.
So start with your initial offer if your heart is truly set on the property!
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