Buying Your First Home
Buying your first home is a big step that we all strive to take in our lives but there is a lot that you need to know before taking the plunge. With the state of the housing market at the present time your best opportunity to purchase your first home may just be before you. Interest rates are at an all time low (approaching 4%) and sellers are desperate to move properties, it is a definite buyers market. There are a lot of foreclosures being sold and although terrible for those who lost their homes might just be the deal you are looking for. The key thing is not to rush and make sure you look over everything, personally and property wise. In addition for the first time home buyers there is also the nice compensation for purchasing your first home this spring, an $8,000 rebate from the government, that does not have to paid back, on next years taxes (let it be known though that this money is only available to you if you don’t flip the house within 5 years or so). Search the web about this rebate to find out more information on it. This money can go a long way with helping you get that new home fixed up and help pay for bills and other costs that come along with owning a home. Before we dive any deeper I just want to disclose that I am no expert on the housing market, just a young man trying to give help to others with something he is currently going through at this moment.
The first thing you need to do when pursuing purchasing a home is going over your finances, figuring out how much money you have saved up plus what you can afford to pay. The best way to figure this out is to get pre-approved through a mortgage company, there you can find out your maximum loan range plus they can calculate for you an estimate on what your monthly payments could be. This will get the ball rolling as most homes you are going to look at are going to want someone who has been pre-approved so they know you are not wasting their time, don’t wait till you find a house you like before finding out if you can even get the funding. Talking to friends and family members who are currently home owners can be a good stepping stone to finding out which companies might be the best for you to go through in your area. Also ask any other questions or concerns you may have in owning home as most people are going to be more than willing to give any help and advice then can give. You want to make sure you are as well informed in every aspect of home ownership as you can possibly be before moving forward.
Next you need to decide if you are going to go through your home search with a Realtor or go it alone. A Realtor can be a good decision in helping you search for your first home as you can detail to them everything you are looking for and they can do all the work in lining up some properties to view. The downside is that you are going to have to pay that Realtor a fee for their services, usually around 6%, another cost you will have to budget. It can be a bit daunting to go it alone but can be something to help shave some costs when you are limited on what you can spend. The Internet is your best friend when deciding to do the search alone, there are many websites out there listing all the properties for sale in your area and most of those websites allow you to customize your search so you can find what you are looking for (finding the national Realtors website for your area might be your best bet, it is constantly updated with the latest homes, town-homes and condos from all the listings). This allows you to take your time in your search and look at as many houses as you would like before making a decision. It can also give you a lot of information on the house including room sizes & number of rooms, age, amenities and some pictures of the house letting you know if it is even going to be worth looking at.
Finding the right area to look can be a big decision too. Not only for the area in which you live but there could also be a special type of loan out there that can help you make that home purchase much easier. There are several different types of loans out there all with their own pre-qualifications. Some loans, if qualified, can even allow you to purchase the home without putting any money down and are usually specific to certain areas only. A little research on the loan types that are available for you is something to look at especially if a down payment (usually 3.5%) might be a problem. Just know that a down payment for the house is usually not all due after your offer is accepted. Usually a small amount of that down payment is asked as earnest money, about $500, to take the house off the market and show good faith that you do really plan on purchasing. The rest of that 3.5% is paid upon closing.
Ask plenty of questions, don’t be afraid of asking the wrong question. You need to find out everything you can about the house before you can make a definite decision whether or not it is going to be something you want to put an offer on. Finding out the age of the house can be one of the first and biggest questions. The older the house the more work may need to be done to it before moving in. The furnace, air conditioning unit, water heater, roof, flooring, plumbing, wiring and more may need to be replaced. If the house is over 15 years old these are definite check points you need to ask about. Finding out the last time that any of these had work to them can help you decide if you are going to have to replace any of them before moving in which could add some big costs. Ask about what the average cost of utilities for the month are and if there are any home owners association fees. Also find out what you can about the previous owners such as why they are selling and how many other owners the home has had. Ask questions about the neighborhood as well so you can be well informed on what to expect. Don’t be afraid to contact the neighbors around the home you are looking at to find out what information they can give you about the house, neighborhood and previous owners. If the property is a foreclosed home make sure you find out if it is being sold as-is and if they know of any issues with the house. If it is a fore-closer being sold as-is then the lender/bank who owns it usually does not know everything that might be wrong with the property. When dealing with a fore-closer you need to make sure you get a general home inspection, termite, radon (in most areas) and any other test to see what is wrong with the home before closing. Sometimes the banks you are dealing with can be a bit generous and help replace and fix some problems that may be present. Usually the Realtor you are dealing with for the sale will be helpful in giving you just about all the information you are going to need.
Once you have found “the one”, and are satisfied with everything then it’s time to make an offer. Talk to the Realtor that is selling the property to try and figure out what the best route for making an offer would be. Taking in the initial price along with any issues or problems you have found in what your offer will be. Try to feel out if there have been some genuine offers on the house and although the Realtor can not tell you much they can, if they are an honest person, usually give you a slight nudge in the right direction. Most of the time you will be able to work the closing costs into the purchase price of the home, paid by the seller, to help elevate any more cash coming out of your pockets. Don’t be afraid if your first offer gets turned down, the selling party will counter offer and you will get a chance to make your own counter offer if you are not satisfied with what they sent back. It will all come down to the final offer standoff where you will make your last chance bid on the house and see if they are willing to accept. Don’t get discouraged or take it for more than you are willing to pay because even though you would be getting the house you might just be getting yourself in over your head with bills if it lands too far outside of your price range. Don’t let the Realtor push you around and make you pay for more than you are willing to pay, especially if you have already had your offer accepted and they want to add some more onto it right before closing. If you don’t think the house is worth that much in it’s current condition then by all means walk away. You always have the ability to walk away before your earnest money is put down, after that something will need to be found to get you out of the contract for the house. Be prepared for a lot of paperwork and signing to be done with making an offer but the Realtor will walk you through everything page by page as you getting everything prepared to submit that offer.
Your first home is well on track to becoming reality once your offer has been accepted. Just make sure, especially at this step, you realize everything that is needed to be done, getting to this point is really going to make you look at what the home is going to cost you. An appraisal will need to be done, sometimes done by the loan company with an approval, plus any of the inspections that need to be done. On top of that research needs to done for any repairs and fixes you plan on doing to the house like new appliances, flooring, paint and so on. Make sure you are looking over all aspects of it all with a fine tooth comb. With those on a limited budget make sure you check out the major store chains for the current credit card promotions. Many stores off 12 months no payments no interest which can help get those necessities purchased. Just make sure if you go that route you read the fine print of it all. Most of the 12 months no payments no interest deals have to be paid back before those 12 months are up or you will be hit some some ridiculous interest rate charges (over 20% in most cases) and they will even go back and charge you interest for those previous 12 months. Good news though for the new home buyers the $8,000 from the government next year can easily help you pay off these cards. On top of all that add on your down payment and setup for cable/satellite, trash pickup, electric, water and gas. Closing will take anywhere from 30-45 days although some inspections need to be done within 10 days of the offer being accepted. Don’t feel too rushed as you will have some time to get everything done.
Once you get past all the stress and are comfortably settled into your new home it is going to more than make up for any of the headaches, hassles and aggravations that you had to put up with along the way here. For most budgets and spending gets a little tighter but still, if staying within a reasonable budget with the house and repairs, will still be able live your lives as you did before. The first night that you have to sit down and relax in your new home is going to be one that you remember for a long time. Make sure you take plenty of pictures throughout the process to keep the memories of it all well preserved.
If you have any questions, comments or concerns about what I have written here feel free to leave a comment on this post and I’ll do my best to help.
Beginnings
The official start date of the blog is Monday, March 16, 2009. I am still getting everything prepared that I need to so I can successfully keep to my blogging schedule with relative topics and sound advice. Hope every stays tuned and joins me on my latest blogging adventure.
- Brad C
An Introduction
Welcome to my new blog, Life, Love and Everything in Between. What you will find here will be some random discussions, tips and other items that I will talk about in an original way. I’m still putting the pieces together of how I am going to do everything but hope you stay tuned. Monday, March 9 should be the start of my blogging. Every Monday, Wednesday and Friday you will find a new entry, Mondays about life (discussions on things such as buying a first home, the economy and so on), Wednesdays about Everything in Between (ranging from tips and discussions on weight loss, movie, television and video game discussions etc.) and on Fridays will deal with topics relating to love, finding love and holding on to it and things of that matter.
This blog will be written in the style of a column, like that of what you would read in your local newspaper and will feature art and images which each entry, mainly featuring pieces from deviantART.
I hope you will check it out once it is fully up and running!
- Brad C
