When you're planning on purchasing a home for the first time, it is an exciting process. You’re getting ready to move into a new place that you can call your own. However, if you’re unfamiliar with the process, it can be difficult to understand what to expect. To ensure that you're prepared as a first-time home buyer, there are a few important steps to take to avoid any complications.
Although most buyers are prepared to save an average of 20 percent of the property that they purchase for a down payment, many forget to save for closing costs. Closing costs cover appraisal fees, pest inspections, attorney fees, recording fees, and underwriting fees. You can expect to pay two to five percent of the selling price of the home, but this can also be negotiated if the seller agrees to cover the fees.
Before you begin shopping for your dream home as a first-time home buyer, it's important to get pre-approved for a loan through a bank or financial institution. Sellers will take you more seriously if you're already pre-approved when you make an offer. This can also allow you to have the advantage in a bidding war because it offers assurance to the seller that you have the necessary funds to purchase the property.
The area that you live in will determine how comfortable you are in the residence long-term. Visit the neighborhood at various times of the day to determine how safe and quiet it is. Although the neighborhood may be quiet during the day, there could be a high level of crime or noise at night. You'll also want to consider how far the home is from your job, which will influence how much time you spend on the road each day.
If you have - or are planning on having - children, you will want to consider school ratings in the district and see how well your local schools perform. You'll also want to consider how close the home is to nearby grocery stores, malls, freeways, and banks.
It's important to hire a real estate agent when you're new to the home buying process. Although a real estate agent is considered an extra expense, the professional can provide you with listings that may not be available to the public yet. This gives you an advantage and access to more listings. You'll also have more negotiating power when you make an offer with the help of an agent who has gone through the process hundreds of times. They'll be able to offer their assistance on a fair offer price that you make to reduce your risk of turning off the seller.
Buying a home for the first time is a big commitment. Thankfully, with the help of local loan lenders, mortgage brokers and real estate agents, you will have the professional expertise you need to help you make the best decision for you and your family.