The first time you buy a house is one of the most stressful and confusing moments in life. It can be hard to know where to start, what questions to ask, and whether or not you are making a good decision.
It’s easy to get overwhelmed by all the choices available: should I rent? Should I buy now? What if prices drop again? Buying your first home is an exciting yet daunting process that requires careful consideration. In this blog post we will cover some things every first-time homebuyer should know before they put pen to paper on their offer.
How much can you afford?
Buying a home is a serious commitment. It’s important to take some time and think about the long term decision that you are making. Think about all of your expenses: how much debt do you have right now, what will monthly payments feel like on top of that amount, and how will it fit into your budget? Take a hard look at all of your expenses and carefully consider what it will mean for you to be responsible for paying your mortgage every month.
What is the neighbourhood like?
Before you get into all the numbers, take some time to make sure that you are comfortable with where this property is located. Is it close to work, family, and friends? Is it in an area you think is safe and appealing to live in? These are all important questions that will impact your happiness every single day.
Has the property been recently renovated or updated?
It’s important to get a sense of what kind of shape the property is really in. Is the property in good repair? Does it need work done that you are willing to do, or do you plan on hiring a contractor? If the seller has been renovating, what is the next step and will they help you take care of it?
Do your homework!
It’s always important to be prepared before you are going into any contract negotiation. This is especially true when it comes to buying a home. Before you even start looking for properties, take some time and do an online search to learn about the type of area that you plan on buying in. Find out who your neighbours are, find out crime rates, talk to friends that live there or have lived there before.
4. How long have you been in your home?
You might be ready to make the leap from renting to buying, but if you’ve only been at your address for a year or less, take a moment and think about why you want to buy now . We are all guilty of getting caught up in the excitement of wanting a new place, but take some time to consider whether or not this is actually the best financial decision for you.
5. Should you go with a realtor?
The first time you buy a home is one of the most exciting times in your life! It can also be overwhelming and complicated, especially if this is your first home buying experience. Although it might seem like common sense, a realtor has the experience and knowledge to help you make an informed decision.
6. What about a home inspection?
If you aren’t using the services of a realtor, your first step should always be to get a home inspection. A certified home inspector will take an inventory of all the major systems in your prospective property and let you know what needed repairs or updates might cost. You can also use the report to negotiate with the seller.
7. What about renovations?
Remodelling can be a huge investment, but it should reward you with a home that is more energy efficient, more functional and much more appealing than what you started with. Make sure to keep any options for future remodeling in mind when looking at your potential properties to purchase – having them all in a row on your spreadsheet is not enough. You are going to want to break out paint colours and flooring options and think about how those things will affect resale value in the future.
8. What’s your purchase timeline?
Before you get started with anything in the buying process, make sure that you are realistic about how much time you have to buy a home. Especially if this is your first home buying experience, take some time and think about what might come up that will affect your plans. Don’t put yourself into a situation where you are going to lose the home of your dreams.
9. What about condo vs single-family home?
You have probably heard that it is impossible to generate equity in a home if you buy a condo, but this isn’t necessarily true! Although, depending on what area of the country you live in, it might be slightly more challenging to get the average resale value that you would if you bought a single-family home. If you are looking at properties in your first purchase, try and find one where there aren’t many condos around it – this is an easy way to increase your potential for resale value. Also, think about what the condo fees tend to be like, and if they will increase in the future.
10. What are you planning on doing with your home?
No matter how much fun it is, buying a new home isn’t really an experience that only lasts one day! Whether it’s renting out your property or using some of that equity to pay off your mortgage, you want to keep in mind what your plans are for the property after you own it. Your new home is going to be more than just a place to rest your head – make sure that you know how you plan on making use of it!
In conclusion, the most important thing you can do when buying a home is to make sure that you are staying realistic with yourself and your expectations for the property. Try and take a moment to consider all the reasons that you want to buy a home, and if those reasons are still there when you really think about it.