Here’s what every First-Time Home Buyer should know so they can dive into house hunting with confidence–and so that they don’t get blind sided along the way!
1. Pick the right Real Estate Agent
The first place to start is to find the right Real Estate Agent for you. You want to have a trusted real estate agent to explain the ins and outs of the process, to advise you and guide you so that you make the most effective decisions at each and every step. Make sure that you find a real estate specialist familiar with the area that you’re planning on purchasing. These specialists are going to have a clearer idea of proper expectations and realistic prices, says Chris Wulff, an agent with Nest Seeker in Beverly Hills, CA.”Finding a Realtor is not hard, but finding one that is best-suited for you personally and your purchase is a challenge,” he adds.
A real estate specialist understands hyper focused information such as the quantity of homes sold, client reviews, and more. Make certain that you interview at least a couple of agents, because once you invest, you may sign a contract barring you from dealing along with other buyer’s agents–this ensures the agent’s hard work for you personally pays off.
2. How much can you afford as a First Time Buyer?
Homes in the San Fernando Valley cost a lot money, so chances are you’ll require a home loan, aka a mortgage to foot the bill, along with a hefty down payment.
There are home loan calculators available on the web that provide a ballpark figure, but for a far more accurate assessment, head to a lender for a mortgage pre-approval. This will put home sellers at ease, simply because they know you have the cash to back up your offer.
You buy the majority of things yourself–at most, sifting through a few online reviews before pressing the Buy button. However, buying a home? It’s not that easy. Buying a home requires an effective purchase contract which can include several contingencies, a legal transfer of a deed, and lots of other paperwork that can get overwhelming. Plus, there’s the home itself–it may look great for you personally, but what if there’s a termite problem inside those walls along with a waste plant currently being built down the street?
2. Know there is no such thing as a Perfect Home
It’s your first home–we know that you’ve dreamed about the ideal house and do not want to pay for anything less. We get it! But realistically, you can only expect to achieve a few of those “must have” things. Buying a house in 2019 will have its up and down. You may find a nice-sized house in a great neighborhood, but the price is a bit higher than you’re hoping for. Or you might find a home in the perfect neighborhood at the perfect price, however it’s a tiny bit, and um, comfy. Whatever those small sacrifices are, remember that your first home is never perfect.
Finding a home is a lot like dating: “perfect” can be the enemy of “good” So find something that you can live in together, and grow into, and renovate to you taste.
3. Do your homework
Once you find a home you love and make an offer that gets accepted, you might get anxious to move forward. But don’t be hasty. Do not purchase a home without doing your own research and add some contingencies to a contract–which basically means that you have the best to back out of the deal if something goes wrong.
The most common contract contingency is the home inspection, that allows you to ask a resolution for issues (e.g., a weak foundation or leaky roof) found with a professional.
Another important first-time home buyer addition: a financing contingency, that provides you the best to back out if the bank does not approve your loan. A pre-approval makes this opportunity much less likely, but a pre-approval is not a guarantee.
You also may want to consider an appraisal contingency plan, which enables you to bail if your lender values the home at less than what you offered. This may mean you’ll have to come up with money out pocket to make up the difference–a tough gamble if cash is already tight. For a guide on “How to avoid a low home appraisal,” key things appraisers look for to determine a house’s value, click HERE.
4. Know your Tax Credits
The first-time home buyer tax credit may no longe be available, but there are a variety of tax breaks new homeowners might not be aware of since recent tax law changes. If you purchased discount points for the mortgage, essentially pre-paying your interest, these are also allowable. Check with your CPA to find out if any of these credits apply to you before purchasing.