Buying a home can be an exciting and rewarding process for first time home buyers. There are a lot of things to consider and first time home buyers will be on a learning curve. Do your homework, have a Realtor that is acting as your “Buyers Agent” to assist you. Buying a home has do’s and don’ts. Don’t go at it alone. First time home buyers need to make sure they consider these things when looking for their first home.
Here are 7 tips first time home buyers need to consider:
1. Look at all the expenses when budgeting for a house. Look beyond principal, interest, and taxes. You must consider utilities, commuting costs, upgrades that may need to be done, and insurance. Call the utility company that services the house you are considering and ask for an estimate of what the costs are.
2. Think big picture, the long term, and re-sale. Are you planning to grow your family? Will you have to care of an elderly parent down the road? If you are planning to buy your first home how long do you plan to live there? 3 years? 10? Who will want to buy this home when you sell it? Is the home in an undesirable school district? IS the home you are considering located next to a high traffic area? When you are ready to sell your home most families that have kids may not want to look at your home. In addition, if you buy a one bedroom home, you limit the re-sale value and demographic of who will want to buy the home. Those things should be considered.
3. Have your lender’s pre-approval letter BEFORE you start going on showings. In this real estate market, there is a shortage of homes for the amount of people looking to buy, especially starter homes in Madison. If you go around looking for homes and find one you love, most sellers will not consider your offer if you have not been pre-approved by a lender since it is more than likely other potential buyers are also making an offer.
4. Location, location, location, or more space? First time home buyers should consider what is more important to them. Living downtown in the heart of everything will cost more per square foot compared to moving to a suburb and possibly getting a little more space for the money. Before shopping for a home, it’s important to set your priorities and decide which is more important to you: space or location. If you settle on this ahead of time, you can make thought-out decisions during the home-buying process and avoid the unwanted feeling of buyer’s remorse.
5. You can continue to negotiate even after the inspection! If you discover something during your inspection you can attempt another round of negotiations. Use flaws to your advantage in the negotiation process. A solid Realtor will do this on your behalf and have a strategy should something unforeseen show up in an inspection. I have had success with this practice for many clients.
6. A higher price point may save you money over time. After renovations, many homeowners find that their budget has been stretched beyond what they initially wanted to pay for a home. With that being said, it can be smart to adjust your price point a little to help you save money over time. By paying a little more upfront for a home that has all of the upgrades and extras you want, you won’t have to worry about paying for them down the road.
7. Save money for a down payment. It is a very good idea to put money down on a home. Your offer will look stronger to the seller, and you’ll have more leverage during negotiations along with equity in the home from the start!
There are many other things to consider. If you would like more information please contact Martin Colver full time real estate professional and blogger at 608-335-8798