19 Things Every Utah First-Time Home Buyer Should Know: Ultimate Guide
As a Utah first-time home buyer, buying your first property is a major milestone. The process can be both exciting and confusing. If you are thinking about entering the real estate market as a first-time homebuyer, the process involved might seem overwhelming since you have no experience and might not know what to expect. Thankfully, it’s possible to demystify the home-buying process and simplify it if you follow these 19 tips.
6 Steps to Take Before Trying to Buy a Home
Before you apply for a mortgage and begin searching for a home in earnest, there are several things you should do to prepare and ensure that you are ready. Take these preliminary steps to make sure everything is in order.
1. Know Your Facts
As a Utah first-time home buyer, it’s helpful to know what you’re getting into. It’s also helpful to know that you’re not the only one going through this process. We’ve compiled a list of helpful stats to prepare you as you start your home buying journey.
The average age of a first-time home buyer is 36 years old – an all-time high (1)
First-time homebuyers have a median income of $50,479 (2)
The average credit score of first-time home buyers was 746 (3)
The average downpayment for first-time home buyers was 7% (4)
The median sales price of a home was $291,139 (5)
Buyers expected to live in their homes for a median of 12 years (6)
41% of buyers said their first step was to look online, while 19% said it was to contact an agent (7)
The average monthly income of a first time home buyer was $7,453 (8)
Home sellers reported selling their homes for a median increase of $85,000 (9)
26% of home buyers said that saving for a downpayment was the most difficult part (10)
Nearly 88% of homebuyers view buying their home as a good financial investment (11)
The median closing costs for first time home buyers is $5,939 (12)
86% of homebuyers used an agent to help them find their home (13)
2. Check Your Credit Reports
The Consumer Finance Protection Bureau (CFPB) recommends the first step prospective first-time homebuyers should take is to check their credit reports. You need to know the state of your credit before you apply for a mortgage. It’s best to pull your credit reports six months to a year before you plan to purchase a home so that you’ll have time to fix errors and improve your credit.
In 2003, Congress passed the Fair and Accurate Credit Transactions Act (FACTA), which entitles consumers to one free credit report every 12 months from each of the three major credit reporting bureaus, including Equifax, TransUnion, and Experian. You can request a copy of your free credit reports from annualcreditreport.com.
You can order free credit reports from all three credit reporting bureaus at once or space them out throughout the year by ordering one every three months. If you have some time before you plan to purchase a home, you might want to space out your credit reports since credit information can change. This might allow you to catch changes as they happen to your credit reports and correct any erroneous information you might find.
When you receive your credit reports, carefully review them to check for errors and old accounts that should no longer appear on your credit reports. Most information should drop off of your credit report seven years after the date of the last activity. For bankruptcies, a bankruptcy can appear for seven years in Chapter 13 or 10 years in
Chapter 7 bankruptcy. If you find inaccurate, negative information, you can dispute it in writing with the credit reporting bureau. If you send a dispute by mail, make sure to include the following information:
- Your name, address, and telephone number
- Confirmation number from the credit report
- Each error you are disputing (wrong account number, inaccurate payment history, old account, etc.)
- Reason for your dispute
- Request the information is corrected or removed
Include a copy of the part of your credit report that contains inaccurate or old information and highlight it. The credit bureau will have 30 days to verify the information. If it can’t, it must be removed.
3. Check Your Credit Score
According to thebalance, the average Utah resident’s credit score is 727.
When you apply for a mortgage, the lender will check your credit score. Each of the three major credit bureaus has proprietary credit scoring models they use to score credit. However, most lenders rely on credit scores calculated by the Fair Isaac Corporation (FICO), so it’s a good idea for you to check your FICO score.
You can purchase your FICO score or get it for free from a variety of sources, including your bank, credit monitoring service, or credit card company. You can get a free FICO score from Experian along with a copy of your credit report here. Keep in mind that there are different versions of FICO scores, and your lender might use a different version than the free FICO Score 8 that Experian provides.
Your credit score helps potential lenders predict whether you’ll make your payments on time. FICO scores range from 300 to 850 and correspond to the following credit profiles:
- Poor – 300 to 579: If your credit falls in this category, you will need to take steps to improve your credit before you will be eligible for any type of credit account
- Fair – 580 to 669: This category is considered subprime, and if your credit score falls in this range, you might have trouble gaining approval for new credit or have to pay higher interest rates
- Good – 670 to 739: If your credit falls in this category, lenders will generally view you as a low-risk borrower
- Very good – 740 to 799: If your credit falls in this category, you should be able to obtain a loan with lower interest rates
- Excellent – 800 to 850: If you have excellent credit, you should command the best available interest rates and have no trouble qualifying for credit
Once you know your credit score, you’ll have an idea of whether your finances are in order and if you have a good chance of qualifying for a mortgage. If your score is in one of the lower ranges, you should take some time to improve your credit score before applying for a mortgage loan.
4. Calculate Your Debt-to-Income Ratio
An important factor mortgage lenders consider when deciding whether to approve you for a mortgage loan is your debt-to-income ratio. In general, you should have a lower debt-to-income ratio. This is the percentage of your income that you pay each month for your debt payments and can be calculated by adding up your total debt payments each month and dividing the total by your total monthly income. The maximum DTI most mortgage lenders will accept is 43%, although your ratio should be lower than that. When you get a mortgage, lenders generally want to see that your payments will be no more than 28% of your monthly income.
If your DTI is too high, you can take steps to lower it by paying off some of your credit cards or other debt. You can also transfer high-interest credit card debt to cards with lower interest rates or pick up a side gig to increase your income and thus lower your DTI.
5. Consider Whether it Is the Right Time to Buy a Home
Once you know your credit standing and have everything in order, you should think carefully about whether it is the right time for you to buy a home. Most mortgage loans come with terms of 15 or 30 years. While this doesn’t mean that you’ll need to remain in your home for the entire loan term, it might not make sense for you to buy instead of rent if you plan to move away from your current city within the next couple of years.
Mortgage payments are made up of several components, including the principal balance, interest charges, taxes, and insurance. When you first begin making your payments, the percentage of each payment that goes toward the principal will be small. If you plan to move within a couple of years, buying a home might not make financial sense because of all of the costs involved, including your closing costs, private mortgage insurance if you can’t make a 20% down payment, and the collateral costs of homeownership such as property taxes and maintenance expenses. In general, you should plan to remain in the first home that you buy for five years before selling it so that you can recoup your investment.
If you still want to purchase a home even though you plan to move within the next few years, you might want to consider buying a home valued at much less than the maximum amount you can afford to take out in a mortgage. That will allow you to absorb a potential financial hit if you need to sell your home quickly and move before you’ve reached the break-even point on the costs involved with purchasing a home.
Other things to consider besides how long you plan to live in the home include the following:
- Whether it is a buyer’s or seller’s market under the economic conditions
- Interest rates for mortgages and whether they are rising or falling
- Your lifestyle needs and whether you have an immediate or impending need for more space such as getting married or having a baby
After considering all of the factors, you can take the next steps if you think it is the right time for you to buy a home.
6. Save for a Downpayment
There are several downpayment assistance programs for first-time homebuyers that can help you get into a home with little down. However, you should save as much as possible for a downpayment. If you can make a sizable downpayment, you will have equity in your home from the beginning.
If you can save up enough money to make a 20% downpayment, you will be in great shape. For conventional mortgages, a 20% downpayment will allow you to avoid private mortgage insurance (PMI). If your downpayment is less than 20% of your total mortgage loan amount, you will have to purchase PMI. This type of insurance is added to your monthly mortgage payment and will continue until you have 20% equity in your home. It can add a significant amount to your monthly mortgage payment, so if you can avoid it, that’s best.
Many people can’t afford to save a 20% downpayment, however. In that case, save as much as possible and investigate available downpayment assistance programs for first-time homebuyers. The Federal Housing Administration (FHA) offers several options for FHA-backed loans with a downpayment of as little as 3.5% for first-time home buyers that meet the eligibility criteria and have good credit.
There are also many downpayment assistance programs at the local and state levels. To learn about the programs available in your area, you can check with your state government. The U.S. Department of Housing and Urban Development (HUD) also maintains a partial list of programs available at the local and state level that can get you started.
In addition to saving for a downpayment, you should also put aside money in an emergency fund to cover from three to six months of your expenses. Having an emergency savings fund can help you cover your mortgage payments, pay for unexpected repair and maintenance costs, and cover you if you encounter an emergency such as an illness or job loss.
6 Steps to Take When You’re Ready to Begin the Process
Once you have everything in order and are prepared to begin the process of buying a home, follow these steps to make the process go smoothly.
1. Investigate Your Mortgage Choices
As a first-time homebuyer, it’s important for you to understand the available mortgage options and to choose the one that will offer the most benefit to you. Here are some things to consider:
Most mortgages for first-time homebuyers come in terms of 15 or 30 years, but there are also other options with shorter or longer terms. The term of your loan will affect the size of your monthly payments, your interest rate, and the total cost of the mortgage. For example, if you choose a mortgage with a 30-year term, you will pay more interest over the life of the loan than you would with a 15-year mortgage. However, the monthly payments you might have to pay for a 15-year mortgage will be higher than the payments on a 30-year mortgage loan for the same amount.
Fixed Rate vs. Adjustable Rate
The next thing to consider is how the interest rate is structured. Mortgages come with either fixed rates or adjustable rates.
With a fixed-rate mortgage, your interest rate will not change over the life of your mortgage. For example, if you get a mortgage loan at an interest rate of 5%, the interest rate you will pay throughout your mortgage will remain at 5% regardless of whether the interest rates in the market go up or down. Getting a fixed-rate mortgage can be a good option for budgeting purposes since your payments will remain the same. However, fixed-rate mortgages generally come with slightly higher interest rates than adjustable-rate mortgages.
Adjustable-rate mortgages (ARMs) have lower initial interest rates that are fixed for a specific term. The initial fixed term might be three, five, seven, or 10 years. Once the initial term is over, the interest rate can be adjusted up or down according to the prevailing interest rates in the market at that time. This can add some unpredictability to your mortgage payments since they can increase or decrease over time. An ARM might be a good option if you plan to sell your home and move within the fixed-rate period of the loan. However, if you end up staying in your home longer than that, you will need to be prepared for a potentially substantial increase in your interest rate and your payment.
Another thing to understand about ARMs is how frequently your interest rate will be adjusted once the fixed period is over. For example, a 5/1 ARM is the most common type of adjustable-rate mortgage. With this loan, once the five-year fixed period is over, your interest rate will be adjusted every year. ARMs might also have other terms than this one. Before agreeing to an ARM, make sure to read the fine print so that you understand the risks.
There are multiple types of mortgage loans that you might qualify for, including the following:
- Conventional loans – These are traditional mortgages that often carry better rates than others, but they are also the most difficult to qualify for and might carry higher downpayment requirements. Conventional loans are those that aren’t backed by a federal agency and are offered by banks and credit unions.
- FHA loan – FHA loans are backed by the Federal Housing Administration and are offered through banks. Since the FHA backs the loan, it can be easier to qualify if you have a lower credit score than what might be required for a conventional loan. FHA-backed loans might come with a required downpayment of as low as 3.5% if you have good credit. These loans generally require you to have a credit score of at least 620.
- VA loans – VA loans are backed by the U.S. Department of Veteran Affairs and are available to military service members, veterans, and surviving spouses. These loans don’t require a downpayment and are partially guaranteed by the VA, making them an attractive option for buyers who qualify.
- USDA loans – USDA loans are backed by the U.S. Department of Agriculture (USDA) and are available to people with lower and middle incomes who want to buy homes in rural areas.
There are also local mortgage programs that might be available in your area. You can talk with your lender to learn about the options that might be available to you.
2. Gather Your Documents
You will need to gather some financial documents before you submit an application to be pre-approved for a mortgage. Having these documents ready will make the process much simpler and more accurate:
- Income tax returns from the last two years
- W-2s, paystubs, or other proof of income from the last few months if you are self-employed
- Bank statements from the last 12 months
- Savings account and investment account statements from the last 12 months
3. Shop Rates
When you’re ready, ask for quotes from various lenders and compare them. If you choose to get several quotes, make sure you get them on the same day since rates can change every day. Compare the terms and the lender’s reputation before choosing which one to go through.
4. Get Pre-approved
Once you have chosen a lender, submit your application. Many lenders offer online applications to get pre-approved for a mortgage. Once you are pre-approved, you will receive a pre-approval letter. This letter will list the maximum amount you can borrow,
the payments (including the principal, interest rate, taxes, and insurance or PITI), and the loan type.
Make sure that the loan amount and payment fit your budget. If it doesn’t, talk to the lender and ask them to reduce the amount to fit your plans. Once you have a pre-approval letter, it will be time to start looking for a home. Sellers are much more willing to work with buyers who are already pre-approved because they know that they will likely receive final approval for a mortgage.
5. Figure Out What You Want in a Home
Your next step is to figure out exactly what you want in your home, including its size, neighborhood, and style. Consider the following factors:
- How far do you want to commute to your job
- Desired neighborhoods
- School district if you have or plan to have kids
- How much you can comfortably afford
- Number of bedrooms and bathrooms
- Whether you want a newer or older home
- The home’s style
- Whether you want to live in a homeowner’s association (HOA) neighborhood or avoid HOAs
- The amount of land you want
Knowing the answers to these questions can help you narrow down your list of homes and save both yourself and your real estate agent a lot of time.
6. Choose a Real Estate Agent
Working with a good real estate agent can make finding the right home must easier. Real estate agents know a lot of information about various neighborhoods, home values, school districts, and other factors that might impact your choice. A good real estate agent will consider what you’re looking for and the amount for which you are pre-approved and match you with some homes to look at. You can then visit several homes until you find the one that meets your needs and fits what you want the best.
You can ask for recommendations from your family members and friends and then interview a few prospective real estate agents. You can also look online and read reviews of the different real estate agents you consider. Pick the one with whom you feel most comfortable and who has the best reputation in your community.
7 Steps to Take When You’ve Found Your Home
Once you’ve found the home you want to buy, follow these tips.
1. Make an Offer
To make an offer, you will need to draft an offer letter. This is known as a residential purchase agreement and is a contract through which you offer to purchase the home. Your real estate agent can help you draft this letter.
Depending on the market, you might make an offer that is lower than what the seller is asking, the full amount, or higher than the listed selling price. However, your offer will also be restricted by the amount you can get in a mortgage, so keep that in mind. Once the seller receives your offer, they can reject it, accept it, or try to negotiate with you. Don’t be afraid to negotiate with the seller for more favorable terms.
Once your offer is accepted, you will need to deposit earnest money into an escrow account. Your earnest money confirms your interest and shows that you intend to follow through on the purchase. It will remain in escrow until you close on the sale and will then be applied to the purchase cost.
2. Apply for the Mortgage
Even though you have been pre-approved, you still need to apply for the mortgage. Your lender will want to see your bank statements, pay stubs, and income tax returns and will also re-check your credit. Once your loan is approved, you will receive a loan estimate statement that includes the loan amount, estimated payments, closing costs, and other important details.
3. Lock in the Interest Rate on the Mortgage
Once you and the seller are under contract for your home purchase, you should contact your lender and lock in the interest rate. Doing this can prevent the interest rate on your mortgage from increasing if rates go up before closing. Your lender should tell you how long the rate will remain locked and the cost of locking it. As long as you close on the home before the lock expires, your mortgage will have that interest rate.
4. Schedule an Inspection
Your lender will appraise the home to make sure its value is more than the loan amount. Lenders have loan-to-value (LTV) caps on mortgages, which means they generally won’t loan money on a home that is above the cap. Conventional mortgages typically have a cap of 80%. This means that if the home you are considering is valued at $100,000, the lender wouldn’t agree to a mortgage of more than $80,000, which is why they might require 20% down.
However, some mortgages have lower LTV caps such as federally-guaranteed mortgages. You can check with your lender to learn about different programs with higher LTV caps, including some that might have LTVs of 100%.
Besides the appraisal, you should have the home inspected to make sure you know exactly what you’ll be getting. The lender won’t pay for an inspection for you, but it’s smart for you to pay for one. A home inspector will look for hidden issues in the home such as problems with the foundation, the integrity of the roof, the electrical system, and others. If the inspector finds significant problems, you can ask the seller to make repairs before moving forward. This can save you significant sums of money in the future and prevent you from buying a home only to learn that you need to make thousands of dollars in repairs.
5. Find Homeowner’s Insurance
You’ll need to get homeowner’s insurance for your home. Like everything else, you can shop around. This is in addition to any PMI you might have to carry if you have a down payment under 20%. You can choose to bundle your homeowner’s insurance with your payments to make it simpler.
6. Do the Final Walk-Through
Before you close, you will get to do a final walk-through of the home. Your walk-through allows you to verify any repairs have been made and that the home is move-in ready. Your real estate agent can schedule this for you. You will also receive a pre-closing disclosure that you should review to make sure all of the closing costs are correct and that you have been credited for any costs the seller has agreed to assume.
7. Close on Your Home
Once your mortgage has been finalized and all repairs have been made, you will attend a closing to finalize the transaction. This is the day that the ownership of the home will be transferred from the seller to you. You and the seller will sign various documents, your funds in escrow will be transferred, and the lender will transfer the mortgage funds to the seller. You will then receive your keys and can start your new life as a homeowner.
Buying your first home can be exhilarating. If you follow the right steps, the process can be fairly predictable and easier to manage. By making sure your finances are in order, you know when it’s the right time to buy a home, and you take steps along the way to protect yourself, you can enjoy a great homebuying experience and love your new home and the memories you’ll build in it.
1. Vet your real estate agent: My first piece of advice is to thoroughly vet your real estate agent before choosing who to work with. Don’t be afraid to treat this as if you’re interviewing them. Over the past few years when the real estate market really began to take off, a lot of new agents entered the market. Because of this, there are a lot of individuals who are licensed agents but do not have the knowledge or expertise as the more seasoned agents. Now that the market has begun to slow down relative to where it was a year ago, it’s become increasingly more important to find the right qualified agent. Ask them how long they’ve been in the industry, number of transactions total and over the past year, total value of transactions, opinions on the current market environment etc. Choosing the right buying agent not only helps your chances of finding the right property, but also purchasing at the right price and asking the right questions so that there are no surprises after closing. I would not suggest choosing an agent simply because a friend recommended them.
2. Use the transitioning market to your advantage: The days of having to offer sight unseen, 10% over asking, and with no contingencies are over (for now). When submitting an offer, you have the leverage to offer lower due diligence and earnest money, longer inspection periods, and ask for seller concessions at closing. The inspection report can also come in handy in this market, pick out the highest priority issues that were flagged during the inspection and request these either be remediated or credited back at closing. Craft an offer that reflects the current market conditions and most benefits you.
3. Set search parameters: Along with the transitioning market, homes are sitting on the market for longer. I would recommend meeting with your agent and building out a target list of homes on the market based on specific parameters (sqft, number of bedrooms, lot size, location, etc.) Once you have these parameters set, look for the homes within these parameters that have been on the market the longest. If they look like something you would be interested in, submit an offer well below list price. Use the leverage in the current market to your advantage. You never know a seller’s specific situation and motivations, the worst that they can do is say no or counter your offer. Lowball the properties that have been sitting on the market the longest, you never know, one of these offers may stick.
4. Reach out to owners directly: Another piece of advice which is taking more of an unconventional route is building a list or properties you like and reaching out to the owners directly, even if they’re not currently listed for sale. Send the owners a letter in the mail letting them know a little bit about you and that you are interested in their home. Adding a picture of you or your family if applicable can also go a long way in increasing your changes of generating a response. I personally know several people who have purchased their primary residence through this method. Again, you never know a seller’s specific situation, maybe they’re considering selling but have yet to list it and would rather see their home go to the right family as opposed to prioritizing receiving absolute top dollar by listing on the market.
Chad Gray is the owner of Cardinal Home Buyers, which is the public facing portion of my company for acquiring off-market properties. I am based out of Raleigh, NC and invest throughout North Carolina and Georgia.
1. Hire an inspector: Before getting a home, you should hire a professional inspector to inspect the home. A home inspector can help you to identify problems with the home. On the basis of the inspection results, you should get to know more about the home and request seller concessions when necessary.
2. Reserve cash for home improvements: You often have to incur large expenses on home improvements after purchasing a home. For example, you might need to do a bathroom remodel or take care of a leaky roof. It’s important to reserve some cash for such unexpected repairs.
Martin is owner of Soco Wine Country Properties and an enthusiastic member of his Sonoma County hometown community and local chamber of commerce. He enjoys fishing, hiking, playing piano and showing his clients the best that Sonoma County has to offer.
As a first-time home buyer, you need to know your costs! Buying a home can involve many different costs beyond the purchase price, and being aware of them can reduce stress and unforeseen financial complications. Here are some of the costs that first-time home buyers need to be aware of:
1. Down payment: Down payment: The down payment is the initial payment made towards the purchase of a home. It is typically a percentage of the home’s purchase price, and can range from 3-20% (depending on the loan program).
2. Closing costs: These are the fees associated with the purchase of a home, which are paid at closing. They can include fees for things like the loan application, appraisal, home inspection, title search, title insurance, and attorney fees. Closing costs generally range from 2-6% of the purchase price.
3. Property taxes: Property taxes are a recurring cost that homeowners must pay to local governments. The amount of property tax you pay is based on the assessed value of your home, which is likely to change over time.
4. Homeowners insurance: Homeowners insurance is a type of insurance that provides coverage for damage or loss to your home and personal property. The cost of homeowners insurance can vary based on factors like the age of the home, location, and coverage levels.
5. Private mortgage insurance (PMI): If you put down less than 20% on a conventional mortgage, you will likely need to pay for PMI. This is insurance that protects the lender in case you default on your loan, and it can add several hundred dollars to your monthly payment.
6. Home maintenance / repairs: Homeowners are responsible for maintaining and repairing their homes, which can involve unexpected costs like replacing an HVAC system or fixing a leaking roof. It’s important to have some funds set aside to cover these expenses as they arise.
7. HOA fees: If you purchase a home in a community with a homeowner’s association, you will likely need to pay monthly or annual fees to cover the cost of maintaining common areas like parks or pools. HOA fees can add hundreds of dollars to your monthly payment, so it’s crucial you are aware of it.
8. Moving costs: Moving costs add up quickly, especially if you are moving across the country and want to bring your things with you. Moving costs can include boxes, packing supplies, renting a truck or hiring professionals. If you plan to buy new furniture for your new place, that’s another item you’ll need to budget for.
The Connelly Team is an award-winning group of Long Island’s most active and trusted real estate agents, serving clients from Montauk to Manhattan. The Connelly Team was named the #2 team in New York State in 2021.
1. Property taxes: Most first-time home shoppers tend to forget that property tax is a crucial expense incurred due to the home purchase and it’s included in monthly mortgage payments. Moreover, the rate for property tax is different in each state. So if the home shopper wants to save some money or has a limited income, they should try home buying in locations with low tax rates.
2. Housing community: Housing communities are local authorities that regulate residential neighborhoods or areas. HOA, Housing Co-Op, etc. are such examples. They have a significant influence on the lifestyle and property rights/freedom of a homeowner because these communities specify what an owner can do and cannot do on the properties listed in these communities. Some of them are also expensive as they have higher membership fees.
Ron Wysocarski is a real estate broker for Wyse Home Team Realty based in Port Orange, FL.
1. Trust your realtor: As a first time home buyer, it’s easy to get overwhelmed and caught up with the nitty gritty of the transaction. But, it’s important to know that your Realtor (if you’ve hired a good one) will handle all of that for you and take you through the whole process. Your Realtor should focus on the transaction itself, so you should only have to worry about making the decisions; and one of the biggest decisions you’ll need to make is how much to spend on your new home.
2. Understand your budget: When you start this whole process, you will likely need to get pre-approved for a loan from a mortgage lender. When the lenders do this, they’ll look at your income, debts, credit score, and assets to decide how much they think you can afford. The thing is, this amount that they pre-approve you for is probably higher than you should actually be spending. You see, when they come up with this price, they don’t take things like lifestyle spending (so, going out to eat, traveling, and shopping) into account. So, if you blindly start searching for a home at the top of your approval, you might find yourself in a position where you can no longer afford to do the things you love to do because your new mortgage takes up such a large amount of your budget.
3. Consider all costs: On top of lifestyle spending, you’re also going to want to consider things like: do you want to purchase furniture for your new home? Do you have enough money in your budget to pay for any repairs or upgrades that might be necessary in your home? Do you already own lawn care equipment like lawn mowers and edgers, or will you need to purchase those shortly after you move in? Owning a home is amazing, and it’s an absolutely fantastic investment, but there are a lot of costs that come along with it, so you want to put yourself in a position where you’re able to handle those costs when they come along.
It can definitely be tempting to spend the maximum amount you’re approved for, but be smart and set your budget up so that you can afford to pay your mortgage and actually live the life you have dreamed of. Because, is it really worth it to live in a gorgeous, big house if that means that you can never do the things you love or pay for the upkeep that that house requires?
Delaney Juarez is a Realtor in San Antonio who helps empty nesters move into the home that fits this new stage in their life so that they can enjoy it to their fullest potential.
1. Ignore aesthetics: One important piece of advice for most first-time home buyers is to completely ignore aesthetics when searching for a property. First time home buyers should focus on the home’s structural integrity, facilities, and location. Even though it’s crucial to find a home that you can live in and be safe in, aesthetics should not be a priority. In some cases, even, good aesthetics are red flags. House flippers know that most buyers are easily fooled by small aesthetic investments, so they focus on those more than making sure the home’s plumbing and electrical wiring are fully up to date. Often times, homes for sale only need minor renovations to look beautiful and clean, so the best buy is usually going to be a house that’s been well-maintained, which goes way beyond fresh paint and new fixtures.
2. Shop with a home professional: Shop with an experienced home professional before making any offers on a home! Find an experienced real estate agent, contractor, architect, or home inspector who can make detailed assessments about the home’s longevity. Before buying anything, you need to have an idea about investments you’ll be making down the line. Necessary expenses, like a new roof, can easily cost you another $20,000+, for example.
3. Consider the location: You should think about the location of the property, the neighborhood, and the surrounding infrastructure. It’s wise to consider the home’s potential for appreciation in value and whether it’s located in an area that is likely to experience growth and development in the coming years. By looking beyond the surface-level aesthetics of a property and taking these other factors into account, you can make a more informed decision and find a home that not only looks good but is also a savvy investment for your future.
Victoria Shockley is the Senior Property Manager at Utopia Management.
1. Understand what you can afford: Determine your budget and get pre-approved for a mortgage loan to help you know your budget.
2. Location matters: Consider the location of the property, including the accessibility to your work, schools, transportation, and amenities.
3. Get a home inspection: A professional inspection can help uncover potential property issues, avoid surprises after you move in, and plan for long-term maintenance.
4. Budget for closing costs: Be aware of the closing costs you need to pay when you buy a home, such as loan fees, property taxes, and insurance. Knowing the estimated closing costs can help you budget for the total cost of the home purchase and make sure you have enough money to cover all the expenses.
5. Be ready to negotiate: Be prepared to negotiate on price, closing date, and other terms with the seller.
6. Get insurance: Obtain homeowner’s insurance to protect your investment and assets.
7. Budget for maintenance: Consider the ongoing maintenance costs of homeownership, including property taxes, repairs, and upgrades.
8. Plan for the future: Consider your long-term needs, such as starting a family or retiring, to ensure the home you purchase meets your future plans.
9. Work with an agent: Hire a real estate agent to help you navigate the home-buying process and represent your interests.
10. Know the legal requirements: Familiarize yourself with the legal requirements and procedures involved in buying a home, including contracts, title searches, and closing procedures.
Brian Meiggs is the owner at What’s My House Worth bring to the table more than 21 years of experience in real estate sales and marketing.
1. Understand the process: First time buyers need to understand that the process of buying a home can be difficult and complex. A good real estate agent will have the knowledge and experience to guide you through the process. They can help you find homes in your price range, review documents, negotiate with sellers, navigate local laws and regulations, arrange inspections, assist with securing financing, and provide advice throughout the entire process.
2. Consider location: When shopping for a home, also consider location, certain areas may come with associated fees like HOA dues or condominium fees as well as taxes which can add up over time if not taken into consideration when budgeting. It is crucial to know exactly what type of loan you will qualify for; researching interest rates and comparing lenders is recommended in order to get the best deal possible on financing. Don’t forget about closing costs such as appraisal fees, title search charges etc which may add up quickly so make sure to factor these into any final offer or bid on a home before committing yourself financially.
Kate Diaz is a real estate expert and co-founder of Swanky Den.
Chuck Vander Stelt
1. Get Pre-Approved for a Mortgage: Homebuyers who know they will need a mortgage should get pre-approved before looking for a home. During the pre-approval process you will learn what type of mortgage you will be using and anything else you might need such as closing costs paid by the seller. This is invaluable information for your real estate agent to keep you moving towards your goal of buying a home.
Some homes will not accept certain types of financing, so if your agent knows what type of mortgage you will be using your agent can keep you focused on the homes you can actually purchase. Home sellers have an expectation for a pre-approval letter to accompany an offer. Instead of scrambling when the right home comes on the market get your pre-approval taken care of now. Then, when the right home comes on the market you’ll be ready.
2. Communicate with the Real Estate Professionals: First time homebuyers will get further in the process by contacting real estate professionals sooner than later. Today’s first time homebuyers, which are typically younger, want to hide behind the screen as long as they can. So many more wannabe homeowners need to come out of their shell and let us help you. The people involved in the home purchase go beyond the buyer and seller and extend to the real estate agents, the lender, the appraiser, the inspector, the title company staff, and in some states an attorney. We want to help you!
First time homebuyers do not know what they do not know. So many of today’s first time homebuyers try to get informed about the process online, but that is not always the best way to go. Online information could be incorrect or incomplete causing potential homebuyers to unnecessarily delay their plans or think they can not make a purchase now. First time homebuyers are my absolute favorite clients. They are fun, get really excited, but most of all I enjoy explaining the process and making sure they understand the homebuying process.
3. Be Prepared to Negotiate: First time homebuyers can benefit from being prepared to negotiate and understand many home sellers have an expectation to negotiate on a home’s purchase price vs. its list price. I have observed more homebuyers, especially younger homebuyers and first time homebuyers, are reluctant to offer a price meaningfully lower than a home’s list price. This causes too many buyers to pass on a home they like but disagree with the list price.
Many sellers list their home high and do so from the perspective homebuyers can make an offer. Homebuyers need to understand an offer has a price and depending on your state probably five to 15 additional terms. Additional negotiations are likely to occur at the inspection stage, to adjust the transaction due to a specific circumstance, or due to a missed appraisal. Your real estate agent is your hired professional to assist you with negotiating in a professional way. Work with your agent, and let your agent speak for you. Do not feel bad about the negotiation because it’s an expected part of the process.
4. Choosing a Real Estate Agent: First time homebuyers should look for a real estate agent with the time to meet their needs, stellar communication, and who enjoy working with first time homebuyers. Everyone seems to know a real estate, but hiring someone simply because he or she is related to you or your dad’s college roommate’s spouse isn’t a good idea.
Look for a real estate agent who has a genuine interest in helping you. A high quality real estate agent should be asking you a lot of questions with follow up questions. Look for a real estate agent who returns your communications within the same day or next day at the very latest. Also, find a real estate agent who communicates with you in the way you want.
Homebuyers should work with a full-time real estate agent. Part-time real estate agents are less likely to have the availability to deliver the highest quality representation to their clients. The real estate market remains highly competitive for quality homes listed at a reasonable justified price. A part-time agent may not be available to get you to that next perfect home before some other buyer captures it.
Additionally, a part-time agent may not be as driven to get you the results you are looking for or to reply to your messages promptly.
Chuck is an Indiana real estate broker in Indiana. Chuck and his Quadwalls Real Estate Team work in the Northwest Indiana region, a dense suburb to rural market home to 900,000 people within commuting distance of Chicago. His team sells about 100 homes per year. Chuck also runs the real estate website Quadwalls.com.
1. Understand your financial situation: It’s important to understand your financial situation and your ability to manage a mortgage payment. Even before starting the process of house hunting, buyers should research mortgage lenders and products to determine what they can afford to take this big step. Buyers should also look closely at their income, budget, and monthly expenses to determine if buying fits into their current situation.
2. Consider all important factors: First-time homebuyers should consider factors like the location, size, and condition of the home they are choosing. Why? Well, because location will impact monthly taxes and additional fees tacked onto a mortgage, size impacts your monthly costs of heating, cooling, and other maintenance/expenses, and condition can be the difference between saving and transitioning into your new home smoothly or being impacted by unexpected costs to replace or repair appliances, home structure, and other large ticket items that come with owning a home. Factor in, how much money you will need or want to have for home improvements and unexpected expenses. Ensuring you have an emergency fund outside of the cost to purchase the home is important when entering the unknown of a new home.
3. Stay within your budget: Once buyers have identified a budget and found the right lender it is important to stay within that budget. Buyers should seek to be pre-approved for their mortgage so they know exactly what can be spent as well as how much will be needed for a down payment and other escrow costs.
4. Factor in all the costs: Buyers should factor in all the costs associated with buying a home, including closing costs, home inspections, insurance, etc. Researching and understanding these costs before buying will ensure a smooth transition into homeownership.
Samantha Hawrylack is a personal finance expert and co-founder of How To FIRE, a personal finance/FIRE blog that has been mentioned in Forbes, MSN, Yahoo, Fox Business, U.S. News & World Report and more.
1. Get a thorough home inspection: Skipping a home inspection can lead to expensive surprises down the road, so it’s not an area where you want to skimp. Before closing on a property, ensure you get a home inspection to spot any potential problems with the property, such as foundation issues, plumbing problems, or mold. If any issues are found, you can negotiate with the seller to have them fixed or adjust the purchase price accordingly.
2. Don’t overlook hidden costs: Buying a home involves more than just the purchase price. You’ll also need to consider additional expenses such as closing costs, property taxes, homeowners’ insurance, and ongoing maintenance and repair costs. Be sure to factor these costs into your budget to avoid any surprises later on.
Brian Meiggs is an entrepreneur and the founder of Smarts – a personal finance website that empowers readers to make better financial decisions. He’s been featured on Yahoo! Finance, Discover, NASDAQ, AOL Finance, MSN Money, GOBankingRates, Student Loan Hero, and other authority news outlets.