April 06, 2021 at 3:57pm | BBHST Admin

By Kyle Spearin

As a first-time homebuyer, you are going up against something completely new: the real estate industry. Most people don’t know much about the real estate industry until they have a reason too—like buying their first home! Before you start this life-changing process, there is something that you should know. To help you out, we wanted to share our first-time homebuyer guide tips for a smooth transition.

Not Defining Your Price Range

Before you start looking for homes, you need to realistically define your price range. Knowing your range in advance can help you find a home quickly—and it can help you avoid a broken heart if you look at a home that is outside of your range. You should always take the time to look at your financial situation so that you can provide an accurate range that works for you.

Not Knowing Your Limits

Knowing your limits is a great way to avoid awkward conversations in the real estate industry. Unfortunately, some people begin looking at homes before they know what they can realistically afford. Instead of simply making your own estimate, you should get a confirmation of your limits. The best way to go about this is to get pre-approval to learn the maximum mortgage amount that you can afford. Knowing this information makes everything else much more approachable, and it gives you the ability to prove why the seller should choose you if there are other interested parties.

Not Exploring Rates

Rates can be fairly deceptive, particularly if your only reference is what the company is offering. As a first time home buyer, you need to be aware of your options. Instead of taking the first offer that you receive, ask around and check out some of the available options. Every  lender will have their own offerings and might be able to offer different incentives. Take your time to talk with these companies so that you can end up with the right deal for you. A better deal might just be one simple email away!

Making a Small Down Payment

Making a small down payment is like sparing yourself today to cause problems for yourself later. Since it offers an immediate incentive, a lot of people make the choice to put down a small down payment—and it is a mistake. You should always try to make a well-sized down payment on your home if you have the option to. By doing this, you can save on interest and even pay your home off sooner. It helps you to really invest in your future, so consider choosing a home where this is possible.

Not Searching for First-Time Homebuyer Programs

First-time homebuyer benefits are no joke—and they can save you a lot! If you don’t research what is available to you, you will likely end up getting a much worse deal. The reality is that we want more people to buy homes. It is good for the economy. This is why so many lenders offer first-time homebuyer programs that can bring you incredible savings. There are so many different options for every time of person, so make sure you shop around.

Emptying Your Savings and Leaving No Emergency Fund

Wanting a home can be a powerful urge and sometimes it leads people to make poor decisions. One of the biggest mistakes that first-time homebuyers make is to empty their savings into a new home. Some people are expecting to pay less on their mortgage than they were while renting, which can help with savings. However, the reality is that there is a high chance of unexpected expenses when you buy a home. You might find that you need more than you have, which will be even more difficult if you no longer have savings.

Not Focusing on Neighborhood

Sometimes people get so focused on the house that they overlook the neighborhood it is in. Before you invest, remember to take a look around the neighborhood at different times. You might notice that there is a dealbreaker hiding in plain sight. No one wants to find out after they move that their neighborhood isn’t a good one.

Not Doing Home Inspection Properly

Failing to do an effective home inspection is one mistake that can leave a lasting impact. As a first-time homebuyer, this can make or break your investment. When you do a home inspection, be sure to work with a professional to ensure that the house is properly inspected. They will know how to ensure that you are getting a good deal and can save you from investing in a bad home. With their help, you might even be able to negotiate the end price. 

Not Involving a Real Estate Agent

The real estate industry is tricky, and it is much easier to navigate with company. A good real estate agent is worth their weight in gold. They can ensure that you have an easy shopping experience and will be able to track down your dream home. More importantly, they have the knowledge and expertise needed to safely navigate the market. This can play a big role in keeping you safe as the market changes. People who do not work with a real estate agent can run into some very real problems and will spend much longer finding their dream home.

Buying an Overpriced House

When you begin looking for homes, you will notice that most real estate websites have a specific tool: a mortgage calculator. With these calculators, you have the ability to gain a general estimate on how much a home is worth. These tools can be helpful and troublesome too. While they can generally tell you if someone is asking too much, they might not be all that accurate in every circumstance. Still, this is one tool that can help keep you from obviously overpaying on a home. Don’t miss out on long-term savings by overpaying for a home that should have sold for less!

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