5 Things to Know Before Buying A Home

We know that the home buying process is daunting; it might seem like you have a million tasks on your plate. Everyone is giving you advice, but where should you spend your time? We asked a recent first-time homebuyer what she wishes she knew before she bought her home. Here are the five pieces of advice she thought were worth sharing.

Take Your Time With Mortgage Lenders

It's no easy decision when debating over the many home lender options. First-time home buyers typically research themselves or use a loan officer, often referred by their real estate agent. Whichever route you decide works best for you, don't be too hasty. Reading the fine print of every offer you receive is a must.

If you take the time to consider various lenders, you may find yourself in a position to negotiate the terms of your mortgage. A primary first-time buyer consideration is Private Mortgage Insurance (PMI). If your down payment is less than 20% of the home sale price, then there is a very high chance most lenders will require a monthly PMI fee. That said, there are a host of low and even no down payment programs available to first home buyers. By taking the time to shop around, you may have the opportunity to arrange a favorable long-term agreement.

Pro tip: you can quickly compare different rates and lenders using Bankrate.com

Everyone's situation is unique. There are pros and cons to every loan. We aren't financial advisors, and you should always supplement our advice with a professional.

Budget For Unexpected Costs

While this may sound obvious, many first-time buyers do not fully comprehend the amount of money they must spend before getting the keys to their future homes. While it's essential to determine your future mortgage allowances, it is equally imperative to save an emergency fund. If your current living situation does not allow a month-to-month lease agreement or you find the home you can't live without before your planned moving timeline; you will need a financial buffer. More often than not, buyers find themselves stuck between their current living expenses and those of their new mortgage agreement. Moving costs and the possible use of a storage facility can become very costly, even over a relatively short period. Buyers will also be responsible for paying all inspection fees for each home they intend to make an offer. For direction on setting aside these extra costs, speak with an experienced local real estate agent.

There Is No Such Thing As The "Perfect Home"

According to real estate mogul Barbara Corcoran, "Buyers decide in the first eight seconds of seeing a home if they're interested in buying it." While following your gut is important, too often, new buyers tend to make rash judgments. Before starting your home search, brainstorm a very detailed list of deal-breakers. Is having a large yard a must? Are you only interested in homes with updated interior features? Do you require a minimum of 4 bedrooms and two bathrooms? Now narrow that list of must-haves down to the essential 3-4 items, which may take some serious flexibility. Do it if you have the time and freedom to look at every available option. We know this sounds daunting, but your earlier expectations may change during the house hunt. Sometimes it's tough to find the home that has everything you ever dreamed of -- in the ideal price point -- in the perfect area of town.

It might be impossible to find a home that checks off all the boxes upfront. But as time goes on, you can check the rest of the boxes off.

Always Consider Return On Investment

It's relatively easy to factor into which type of home and location suits your current lifestyle needs. A townhouse or an apartment may offer a cheaper mortgage upfront- it might even be within walking distance to your favorite coffee shop or gym! While these are all things to consider, do not lose sight of the long-term investment. When you decide to rent or sell your first home, it is invaluable to consider your future buyer. One key factor to consider is the area's school district. Would your home be attractive to a family? If the answer is yes, there is a good chance you'll have a more successful selling experience when the time comes.

Pay Close Attention To The Home Inspection

Once you've chosen the home you want to make an offer on and the seller has agreed to terms, you will need to hire a licensed home inspector (or sometimes multiple home inspectors) to evaluate the home's condition. Keep this in mind: no home is in perfect condition, no matter the age. Learn more: Top 8 Home Inspection Mistakes

A good inspector will point out all the issues about the four main inspection points: HVAC, electrical wiring/panels, plumbing, and roofing. These four areas of concern will directly affect your home insurance coverage and more costly short and long-term repairs. The status of the inspection report will also play a role in the negotiation process between the buyer and seller. An experienced realtor will know exactly how to advise your next steps.

While we cannot highlight every scenario here, we are happy to answer any questions you have during your home buying experience. We even have a well-rounded list of vendors if you need a referral.

 

 

Eric Slifkin, a Broker Associate, is the founder of the Slifkin Team at Keller Williams Realty. Eric and his team of experienced agents serve South Florida and the Treasure Coast, including  Stuart, Port Saint Lucie, and the Palm Beaches.