Start Your Search
Before attending your first open house or showing, ask yourself these key questions to ensure you're informed and ready to begin.
- What’s my budget? Use a mortgage calculator to determine how much you can afford monthly, factoring in property taxes, insurance, and maintenance costs. Consider all expenses, including principal and interest on your mortgage.
- What kind of home do I want? Decide on the basics, like the number of bedrooms and bathrooms. Consider other factors, such as lot size, school district, and must-have features like a fenced yard or appliances. Make three lists: must-have, must-avoid, and nice-to-have. Use platforms like Zillow to explore available options.
- Who can help me? A Realtor or real estate agent can be especially helpful for first-time buyers. Ask for referrals from coworkers, friends, or family to find a reliable agent.
- Pre-Approval for a Mortgage: Before you start looking at homes, it's wise to get pre-approved for a mortgage. This shows sellers you’re a serious buyer and gives you a clear idea of your purchasing power, helping you avoid homes outside your budget.
Looking at Homes
Visiting homes is exciting, especially when you know your budget, preferences, and have an agent’s assistance. Attend open houses or schedule private showings. Take your time to examine every room and feature thoroughly. Sellers understand that buying a home is a big decision, so don’t hesitate to inspect the property closely.
Some special situations may offer great deals:
- Short Sale: If a homeowner needs to sell but can’t get enough to cover their loan, they may do a short sale. These purchases require lender approval and take longer but can offer great savings.
- Foreclosure: When a homeowner stops paying their mortgage, the lender forecloses on the home and typically sells it at a low price. Be sure to get a thorough inspection, as foreclosure homes may have been vacant for a long time and could need repairs.
- Starter Home: If your dream home is out of budget, consider starting with something smaller or less luxurious. Starter homes are in high demand and a great first step into homeownership, making it easier to upgrade later.
Additional Considerations
- Understand Closing Costs: Be prepared for closing costs, which can range from 2% to 5% of the loan amount. These are important to factor into your budget alongside your down payment.
- Home Inspection and Appraisal: Always schedule a home inspection before finalizing a purchase to identify any hidden issues. Lenders will also require an appraisal to ensure the home's value aligns with the loan amount.
- Negotiation Strategies: Work with your agent to negotiate the best deal, whether that means lowering the purchase price, requesting repairs, or having the seller cover some closing costs.
- Resale Value Consideration: Even if this is your forever home, consider its resale value. Location, neighborhood amenities, and future development can affect how the home appreciates over time.