One of the moments that mark an extraordinary passage in one’s life is when you are buying your first home. You are progressing from being a renter to being a proud home owner. First time home buyers are often overwhelmed when it comes to all the decisions that have to be made as to whether purchasing a home is the best decision for them.
One of your biggest challenges of being a first-time buyer would be balancing your livability and profitability in a way that it won’t affect you and your family. The bottom line is there’s no foolproof formula for a first-time buyer success, but there are steps you can take to stack the odds in your favour:
- Start Saving Up. If you want to own a home successfully, you will need to save up your money for a down payment. Most down payments range from 5-20%. This will decrease the risk that lenders face when they approve the mortgage loans and can help improve your interest rate.
- Go out and find your home. It sounds simple, doesn’t it? However, some common blunders will keep first time home buyers from finding a home that is truly right for them. For example, many first time home buyers believe that they will find the “perfect” home. Try to keep an open mind. If you fall in love with a home based on emotional factors, it can lead you to lose focus of other issues with the house that may be hard to deal with once you are living in it.
- Find a realtor. It’s not that you can’t buy your home without the help of a professional, but it will be a lot easier for you when working with someone who knows all about the process. So, do some research and find a real estate agent that has the knowledge and experience to assist you in buying your first home. Interview several, if you want and be sure to ask your potential realtors specifically about their experience in working with first time home buyers.
- Don’t be afraid to negotiate. Some people hesitate to negotiate while some find the process of bargaining to be a natural thing. Buying your first home is an exercise in the art of negotiation. You can ask for a lower home value but cover closings costs or offer full price if they take on your closing costs. The options are endless and if you have a realtor experienced with first time buyers, they can help you a lot on this step.
- Don’t let closing costs surprise you – or scare you. Once you get the scope of the buying process, you should follow and budget for all of the transaction’s costs. In addition to your down payment, buyers pay most of the closing costs when purchasing a home, in addition to things like inspection fees and title insurance taxes. Closing fees can add up to 5-7 percent of the purchase price, and must be paid before you get the keys.
First time home buyers should always try and get as much information as possible. More information will allow you to make better-informed decisions on your purchase. Remember that buying a home is one of the most critical decisions that you will make in your lifetime but it can also be a thrilling experience.