Exciting doesn’t even begin to describe the mounting emotions you feel about buying your first home. You should be proud! To be this close means you’ve done your homework, gathered sufficient savings, prepped your credit score and debt-to-income ratio, and are ready to take that next step. But before you jump head-over-feet into the waters of residential real estate, here are some tips for first time homebuyers.
Out of Order | Understanding the Steps
You may not realize there’s a system in place for buying houses. Real estate agents, lenders, escrow agents, insurance representatives, and other service providers work in the industry every single day. They understand the order of things. You, too, should know the processes your transaction goes through from the time you decide to make an offer on a home until the time you put that key into the front door for the first time. The order of things is as follows:
- Get your money and numbers in order. Have adequate savings, deposits, closing costs, credit score, debt-to-income ratio, etc.
- Lock in that home mortgage loan approval.
- Find the right real estate agent.
- Shop houses with a realistic wish list and an appreciation for open house etiquette, then submit and negotiate offers until you’ve made an offer on a house that the seller accepted.
- The house has to be surveyed, appraised, and inspected to satisfy your lender that the house is worth what you’re borrowing.
- Closing day – when you get the keys, and the deed is done.
Emotional Detachment | Keeping Hold of the Business End of Things
It’s easy to fall in love with a house, especially if you’ve already looked at more than your fair share and began to give up hope. But then the light shone, the divine choir sang, and you felt your soul wrap around the home of your dreams. Check yourself. It’s not yours yet and may never be, so keep your emotions at bay and remember this is a business deal. From competitive offers and seller’s preferences down to title checks and inspections, any number of things could present as deal-breakers.
Your emotional attachment to a property you don’t yet own will add substantially to the amount of stress and anxiety you’ll feel during each step of the way and could lead to you feeling devastated if the house you love falls through.
Realistic Expectations | The Reality of Your Situation
Most first-time homebuyers have unrealistic expectations of almost every step of the way. They underestimate the difficulty and time involved with fixing a damaged credit score or leveling out a stretched debt-to-income ratio, and to get pre-approved for the home mortgage loan.
Another misconception amongst first-time buyers is that the real estate agent works for the buyer. In reality, the buyer’s agent – or your agent – doesn’t work for you at all. Instead, they get paid a gratuity from the seller’s agent for assisting the sale.
Wish lists are another sore spot. Your budget isn’t as elastic as you imagine. Real estate is expensive, and there are layers upon layers of services and service providers you have to pay for along the way. Cut down the wish list to the bare bones and basics with the awareness you can improve your home over time.
Patience is a Virtue
Instant gratification is a tale of fiction in real estate. There is no quick-fix, no hurrying to the finish line. Every step in the process takes time – from getting your money and numbers to find the right agent – the right house. Nail-biting is common as you wait to find out if your offer has been accepted, or at each level of negotiations. You’ll wait for inspections, appraisals, surveys, legalities, and paperwork. Heart races. Sweat glands gush. But you’ve got to breathe through the process and know that good things come in time.
First Time Home Buyers
When you have false hopes and unrealistic expectations, trying to buy your first home can feel unbearable. But when you educate yourself in advance, when you study the processes and the steps to buying a home, when you’re prepared with savings and strong credit, and really take advantage of the tips and advice you’ve received along the way, you can have a great experience with buying your first home.
Your real estate agent is the best source of information about the local community and real estate topics. Give PEG Ramsey a call today at 818-809-3658 to learn more about local areas, discuss selling a house, or tour available homes for sale.