The number one thing most first-time home buyers think about is their finances. While knowing your budget and sorting out your down payment are key, they are not the only elements you need to consider when you’re getting ready to buy a home. Anyone looking to break into the world of home ownership should actually be taking each of these 8 points into account…
Its fine to have a wish list but flexibility is key
Be reasonable, you’re not likely to get everything on your wish list, especially when you’re looking for a starter home. Try to narrow your list down to some key “must haves” and be prepared to compromise on some others. You’re much more likely to find a property successfully that way.
Deal with your debts
You’ll have a much easier time when you visit a bank or mortgage broker if you get your finances in order ahead of time. It will also make the adjustment to mortgage payments and unforeseen home ownership expenses (maybe your washer and dryer will die within days of each other, maybe you’ll have a plumbing issue or spring a leak in the roof during a heavy summer storm…those responsibilities are all yours now that you own the house!) much easier to manage.
Find yourself a team of experts
Whether you’re dealing with finances, finding the right home to bid on, wondering how much insurance is really necessary or trying to line up a lawyer to handle your affairs, you want the best advice you can find. Find some experts you trust and feel comfortable with and rely on them to help you make sense of things.
Think carefully about what you want vs what you can afford
You may like the idea of being in the midst of things in an urban area but that has to be weighed against the reality that you’ll get more “bang for your buck” outside of prime areas. Sometimes the trade off of getting a larger property in a less than trendy area is well worth it…especially if you don’t plan to stay put forever. By the same token, it may not be realistic to think you can find the perfect little starter home on 50 acres in the countryside. Most of us have to work our way up to that ideal property, not start out there.
Don’t get taken in by furnishings
A well presented home will show you the house in the best possible light. Everything will look fantastic and it will be easy to see yourself lounging on that cushy couch watching that big flat screen tv and entertaining friends. Just remember that the couch and tv won’t be there when you move in. Think about what the place would look like when full of your stuff. Is it still fantastic?
I always recommend buyers get a home inspection so that they can be as informed as possible about the property they’re about to own. There is a real benefit to knowing exactly where you stand, what repairs are looming and what they may cost. It’s always best to avoid a nasty surprise.
Find out about closing costs
It always surprises me how many first time buyers haven’t taken into account the fees and costs they may have on top of their deposit and down payment. Find out as much as you can about the extras (things like land transfer tax, lawyer’s fees, home inspection costs, appraisal fees, insurance, possible utility fees, etc) ahead of time so that you’re not scrambling to come up with the necessary cash at the last minute.
Don’t expect to have a fully furnished dream home right away
When my wife and I got our first home, we owned a bed, the major appliances that came with the house, a tv and that’s about it. We used lawn furniture in our living room for the first 6 weeks or so because we couldn’t afford to completely furnish the house we had just purchased. The extras all came soon enough but they were not all high-end, brand new items. We gratefully accepted hand-me-downs, bought what we could at budget friendly outlets such as Ikea and WalMart and bought larger items one at a time when we could afford them. It helped us to make sure we were comfortable with all of our new payments and allowed us to figure out exactly what we wanted our new home to look like. You know what they say about fools rushing in…