Buying your first home is one of life’s most exciting endeavors. It can also be extremely stressful, filled with ups and downs. Fortunately, there are ways to prepare, and to make sure your first house-hunt is a successful one.
Our experts have advice for navigating the process, with tips for first-time buyers on everything from choosing a real estate agent to managing expectations. With the right insight and preparation, you might be able to avoid some common pitfalls and find your dream home with minimal stress and fuss—even in a challenging market.
Get Your Finances in Order
Get Your Finances in Order It can be daunting to assess your finances and figure out how to go about saving up for a down payment and budgeting for a home purchase. That’s where meeting with a lender for preapproval can give you a jumping off point. If you already have a real estate agent, you can ask them for broker suggestions. Friends and family can suggest a source, as well—just be sure to shop around.
“Speak with at least two brokers, as rates and fees can vary,” says Gaetano Marra, a broker and owner with Better Homes and Gardens Real Estate. “Much like buying a car, you never want to go right into a dealership and just buy the first car you see.”
There are tons of ways to calculate the amount of home you can afford to purchase, but Marra suggests making sure that your housing costs do not exceed 25% of your take-home income.
“A wise way to calculate what a buyer can afford is to spend 25% of their take-home income on the mortgage payment, inclusive of the principal payment, interest, taxes, and insurance,” Marra says. “While many will spend more than 25% for a home they really want, this is a great place to start the conversation.”
Once you know how much you can afford, you can consult with your lender on how to save for a down payment. Some loans might require anywhere between 3 and 25% down, whereas some loans require nothing down. You’ll need to find out which you qualify for to proceed.
Choose a Real Estate Agent
Choosing a real estate agent is often best accomplished through word of mouth. Ask your friends and family who they’ve used and been happy with over the years. This is the best way to gauge an agent’s skills and to see whether you mesh. (The same goes for anyone you might go through for financing.)
“The majority of my clients come to me by referral,” says Lauren Bennett of the Corcoran Group in Long Island City, New York. “It’s a wonderful place to be for both sides (broker and client), because there is an immediate feeling of trust, as we have a mutual connection/experience that gives assurance. Ask your friends and family members for a recommendation if possible. It’s important to work with someone who makes you feel comfortable and who you can trust, both as your guide and your advocate.”
Look for an agent who is experienced, communicates in a timely and effective manner, and works to understand what it is you’re searching for.
“There is no substitute for transactional experience, as much of this job is on-the-job training. If you choose to go with a family or friend who is new to the business, be sure they are working with a broker or supportive brokerage who can assist with the process. Lastly, look for reviews,” Marra says. “If you can’t find any online [in] this day and age, there is likely a reason!”
Don’t be afraid to change agents if you aren’t happy with the support you receive. Just be sure to read any contract language before you sign. In many cases, listing agents will require that you work with them for a minimum amount of time.
Ben Creamer, managing broker at Downtown Realty Company in Chicago, suggests looking for an agent that specializes in your preferred location.
“I suggest working with a Realtor who is active in the local market,” he says. “For example, I wouldn’t pick a Realtor who works primarily in the suburbs if you’re looking to buy a condo in a major city.”
Master the House Hunt
Once your finances are squared away and your agent is ready, the hunt begins. At first, touring homes and looking through listings is super exciting, but don’t get discouraged if you find your hunt drags on for 30 days or more. In a competitive market, it could take much longer. Anticipating this timeline can prevent disappointment.
“It’s easy to fall in love with some homes. Charming homes melt our hearts. Big modern homes inspire us,” says Christa Kenin, a real estate agent at Douglas Elliman. “But think about your family’s needs and lifestyle.”
As you go through your wishlist for your new home, communicate this with your agent.
“Does a home with a [primary] bedroom on the first floor make sense if you have very young children who will be sleeping in bedrooms upstairs?” Kenin says. “Is that babbling brook or pond in the backyard a good idea with young children and dogs? Is a guest room right next the [primary] bedroom going to provide enough privacy for you and your future guests? How much will it cost to heat that antique home with plaster walls and little insulation?”
As you search, look for a property that is within your budget but also gives you some wiggle room.
“Don’t let your eyes be bigger than your stomach. Be realistic about how much work a home will need to initially move into it and to make the home the way you ultimately would like it,” Kenin says.
And be sure your checklist covers location.
“We always remind our clients that location is a big part of the equation, and the one thing you can’t change or renovate,” Creamer says. “Consider what the area is going to look like five or ten years down the road. Ideally, the property is located in a neighborhood with appreciating value.”
To choose an area, try visiting the spots you have an eye on.
“Spend a day in your neighborhood or community of interest,” Bennett says. “Try the restaurants, visit the local grocery store, walk through the parks, sit by the lake—enjoy it! It’s a great way to get the feel of what day-to-day life will be like in your potential new home.”
Finally, while the home you’re about to purchase might be your first or something you’re calling a starter home, it could very well be the home you find yourself in as you go through major life changes.
“Consider how your home can accommodate a manage a major life change, like a job relocation, marriage, children, or a change in financial situation,” Creamer says.
At the same time, it’s good to factor in resale, even if you think that’s a long way off—“unless you’re the rare first-time buyer that’s also shopping for a ‘forever home,’” Creamer says.
“It’s important to think about resale,” he says, “Ask yourself if the home has broad enough appeal for good resale value, and whether you can sell it quickly? It never hurts to have your broker check rental values in the area in case your circumstances change, and you need to rent out the property for a short time period.”
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