Tips for the First-Time Homebuyer

As seen in the Edwardsville Intelligencer's "Real Estate Matters" column. Purchasing a home for the first time can be thrilling but with all the excitement also comes a lot of questions about legalities, finance and how to find the right home for your budget. Did you know the National Association of Realtors reported in 2016 that 34 percent of all homebuyers were first-time homebuyers? Since it is likely to be the single biggest investment of the early stages of your life, it’s crucial to begin the process with the right knowledge and advisors in your corner.

Before anything else, you must determine if now is the right time to purchase a home. Make sure you have a stable income, good credit score, and the job security to assure you will be able to afford a long-term investment of this nature. Sit down and begin to track your spending by calculating all of your current expenses, minus rent, to determine what you will be able to spend on a down payment and what’s left aside to pay a monthly mortgage, plus the other home expenses like home insurance, mortgage insurance and real estate taxes. Also consider if you will still have money to set aside in savings for any incidental expenses needed to fix minor repairs around the home, decorate to your taste and for other needs that may require you tap your savings such as car repairs.

Now that you’ve established it’s the right time to purchase your first home, choosing the right real estate professional is the next stop in the journey. Pinpoint the area in which you are interested in owning a home, then choose a local Realtor® who has an abundance of knowledge of the housing market in that location. Try to choose a Realtor® who is motivated to find the perfect house for you, has the experience and references to make you feel confident, and is someone who you can trust playing such an important role in your life. Their knowledge of neighborhoods within the region will help you determine the right initial offer and prevent you from overpaying.

While it’s easy to fall in love with the first house that meets all of your criteria and more, it is critical that the home falls within the price range you can afford. Always get pre-approved for a mortgage to figure out what type of mortgage you qualify for. Look at different lenders to decide who will give you the insight on which mortgage loan products best suit your specific needs. Sellers and listing agents will favor your purchase offer over others because they know you’ve done your homework to determine a price you can truly afford, and therefore will most likely be able to close on the deal.

Next determine what type of house you are looking for. Sit down and write out all of the characteristics you want in your new home – number of bedrooms, number of bathrooms, garage, deck, etc. Armed with your wish list, the real estate agent will have a better idea about which neighborhoods you can afford to meet the criteria you have outlined. When making your wish list, also consider the size and style of the home you want, its proximity to work, schools, and other attractions to help your real estate agent hit the mark in finding your dream home.

When visiting neighborhoods, don’t base a decision off of only one visit. Make several trips to that neighborhood and figure out things like its safety, commute times, things to do on the weekends, where the nearest parks or grocery stores are, and other things that will leave you feeling confident you have chosen the right spot. Also, don't be afraid to ask potential neighbors how they like living in the area. They could give key insight on what they like about living in the neighborhood and also what they dislike. Buying a first home is too big of an investment not to be completely sold on where you will be coming home every day after a long day of work.

Once you've found a home that meets many of your non-negotiable “must haves” and other items on your checklist, your Realtor® will guide you through writing the offer, successfully negotiating, and then will guide you through inspections and the closing date.

While timing comes into play, so does the validity and strength of your offer. When you’re working with a seasoned Realtor®, you will benefit from their experience and knowledge of the market and its pricing. Discuss openly with your agent what the market values are in the subject’s property neighborhood and collaborate on how to make an appropriate offer.

Closing on your first home is a great feeling as you know that all of the preparation, research and patience paid off with a reward of a home that meets most, if not all, of your criteria in a location and price range that is perfect for you. While at times the process may have seemed confusing and stressful, always remember your Realtor® is there to help you every step of the way.

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