7 Things First-Time Home Buyers Wish They Knew
There’s a lot they don’t teach you in school.
As an undeniable step in the traditional American dream, purchasing a home is something many hard-working professionals look forward to. In fact, according to research conducted by NerdWallet, 36 percent of citizens intend to fork over a down payment on a house and sign on the dotted line for a mortgage in the next five years, a figure that’s grown by 4 percent since 2017. But while the idea of having an address to truly call your own is a major milestone, it’s a process that few truly understand until, well, they’ve done it, with or without the help of a home buying checklist.
If you have fantasized about posting one of those “I’m a home buyer!” photos on Instagram, read these words of wisdom—and caution—before diving into the sea of listings. Though these first-time home buyers are happy to have a home-sweet-home, there are a handful of lessons they wished they knew before they began the search.
First-time home buyer tips (from people who did it)
1 You can’t put a price on a great realtor.
Sure, some people have luck touring For Sale By Owner properties to avoid realtor fees, but the vast majority of homeowners turn to experts for guidance. With any industry, though, reading reviews and asking for recommendations is vital to finding a quality realtor. In September, entrepreneur Victoria Kent purchased her first home in Chicago, and hiring a realtor she could trust proved to be one of the most important factors in her search. Not only did he lead her through the process and answer her hundreds of questions as a first-time home buyer, but he also was able to step in and make strategic negotiations when she needed him.
When you work with an agent who understands the market, has tons of experience, and can be on call when you’re in a bind (or simply need reassurance), Kent says you’ll be much less stressed from day one to close. “There are so many other people [who are] a part of the process [who] are essential, and having an agent who can recommend home inspectors, attorneys, and mortgage brokers that you can rely on is critical,” she says. “I saw my dream house on August 25, 2019, and was moved in by September 28, 2019, and that wouldn’t have happened without my agent.”
2 You have to set financial limits yourself.
When Patrick Gevas, a vice president at GreenRoom Agency, started to think about buying a house in Miami in late 2016, he had been compulsively working to build an excellent credit score. He was also saving and felt confident the bank would give him a figure he’d feel comfortable borrowing. What he didn’t anticipate was just how much he was pre-approved. Though it seems like a perk, being approved for a huge mortgage can actually be a downfall if first-time home buyers don’t manage their finances. After all, you don’t want to be stuck with a mortgage that, ultimately, you can’t afford.
Since the folks at the bank won’t do it for you, it’s up to you to be savvy, Gevas says. “I was intent on never being house poor, but now understand how easily it can happen when you’re under the delusion that the bank says they’ll give you what seems like an incredible amount of money,” he says. Luckily, Gevas was able to find a dream condo in January 2017 that was in his range—and still have enough cash to pay additional hidden fees, like building maintenance, among others.
3 You should always have a home warranty.
Not so fun fact about being a homeowner: You can’t call your landlord when something breaks. (You’re the landlord now!) Typically, during a closing, the seller and buyer will negotiate any adjustments to the listing price based on damages or potential money pits that could cost a pretty penny in the future. One way to protect yourself as a buyer is through home warranty insurance, sometimes offered by the seller.
Erika Sutton, MSW, a home health social worker, purchased her first home in Hendersonville, North Carolina with her spouse in August 2016. They weren’t familiar with this type of quality control, but looking back, it was one of the best decisions they made. Not only did the seller cover the home warranty for the first 12 months of their mortgage, but they’ve continued to buy it themselves ever since. “In the first year of home ownership, our hot water heater died, the electric circuit board on our garage door went out, and the heating element in our oven burnt out. All those repairs would have put a huge dent in our savings, but all we had to pay was the $75 service call fee each time,” she says.
It also takes some of the guess work out of hiring contractors, since Sutton says the warranty company partners with local agencies, so all you have to do is make one call and the problem is solved. Easy, right?
4 You have to be prepared to move fast.
And by fast, James Linney means super-duper speedy. When he and his partner started to look through properties earlier this year in Los Angeles, they were amazed at how quickly listings came and went. “We would set alerts when something new came up, and then go to open houses with hoards of people coming in and out,” Linney says. In the hustle to find the right pad in their desirable neighborhood, they bid on two properties, and in both cases, weren’t the winners, since another buyer offered more money.
Luckily, fate (and a great realtor) helped them to find their perfect nest in Echo Park, and the engaged couple signed in May. That’s when, again, things moved quickly, since they’re based in California. The law in the Golden State dictates everything has to happen in a 30-day escrow window. “This means getting all inspections done the second our offer was accepted—appraisal, termite inspections, mold inspections, and foundation inspections—in addition to getting the mortgage officially approved,” Linney says. “It was a very stressful month.”
Reach out to a realtor in your area if you’re curious about the market in your zip code. He or she can explain the condition of the market, as well as how swiftly the process will move once a bid is accepted.
5 If you see something, say something.
You know how it goes: When something doesn’t feel right, it’s tough to ignore. Our guts are often our best defense during times that require critical decision-making. While it seems like a no-brainer, marketing manager Kim Kornfeld urges first-time home buyers to speak up when going through the home-buying process. “If you see a pinhole leak during your walkthrough? Don’t keep that to yourself. See a brown coffee-like stain on your ceiling? It’s a sign of water damage or a previous issue,” she says.
Why is this so important? Once you sign those papers, these problems are now yours. And if you don’t want to fork over more cash when you move into your humble abode, you have to identify anything and everything before it is officially yours. “Make sure you speak up while you’re still in the process to hopefully put this on the seller to fix and also alleviate some of the homebuying growing pains once you move in,” Kornfeld says. This tactic proved successful and helpful for Kornfeld, who became a first-time buyer with her husband in Long Island, New York, this August.
6 You have to be ready to walk away.
When you’re in a relationship that’s not a two-way street, the choices eventually become clear. You can lower your expectations and try to be happy. You can pretend to be someone you’re not. Or you can walk away.
Though it may not seem like a romantic predicament, buying a home is a lot like determining the right match. There are a plethora of options, and though there are some pads that would be amazing, they could be out of your price range. Having the strength to say no to what you can’t afford is a difficult practice, but one that will protect your assets for decades to come. As Gevas explains, as easy as it is to cave, once you have your limits set, stick to ’em. Sometimes, deciding to turn a cheek and hit the road could help with negotiations.
He experienced this first-hand when he couldn’t agree on a fair price with sellers, who wanted to charge more since they spent cash on renovations. “While I loved the unit, the comps and the neighborhood didn’t justify what they were asking, and the unit had been on the market for nearly three months,” he says. To try to appease the sellers, he offered to meet in the middle. If they didn’t go for it, Gevas decided it wasn’t meant to be, and with a broken heart, was prepared to leave it behind. “Two weeks later, my realtor came back and said they agreed! I went ahead—and don’t regret it one bit,” he says.
7 You have to listen to your opinion above all others.
This March, when Heather Blakley, an elementary school teacher in Salt Lake City, Utah, decided to buy a home as a single gal, it seemed everyone had an opinion. From zip codes to price ranges, styles, and beyond, many people gave their tips—usually, unprompted. “It was shocking to me how people I didn’t even really know or who had never seen my house were giving me completely unsolicited advice,” she says.
Most of the time, family and friends have kind intentions, but once you sign on the dotted line for your mortgage, that’s it. It’s yours—and your responsibility. “I actually stopped talking about my house because the overwhelming opinions began to get hurtful,” Blakley says. “When you only hear negativity, it can sometimes take the fun and the excitement out of buying a home.” While asking for feedback can be helpful, remember to trust your own gut and follow what feels right to you, your goals, and your future.
Source: REALSIMPLE.COM | 7 Things First-Time Home Buyers Wish They Knew