Buying your first house is both an exciting and equally intimidating experience. This is the same as with every “first” that we experience. And, like every other “first” the best course of action is to seek as much knowledge on the subject matter as we can because if there’s one thing to note, it’s that preparation does not guarantee success; rather, it guarantees confidence.
And oftentimes, this confidence is your best method of concealing your lack of experience in buying properties.
There are many factors to consider when buying your first house. But for the sake of brevity, and also for the sake of ensuring that you retain all this information, we’ve narrowed these factors and things to remember down to 5 items.
- Pre-Approval Status Pre-approval refers to the assurance (or commitment) that a lender gives to a borrower. In essence, this means that the lender has already been able to ascertain the financial capabilities of a particular borrower and has therefore agreed to lend money to the borrower even if the buyer has not yet specified property that the buyer would like to mortgage.
The importance of this really lies in proof that a buyer has the financial means to fulfill his end of the contract. This also helps your agent select which homes to show to you based on your budget. Nothing is more discouraging than getting attracted to a home only to find out that that particular house is beyond your financial capabilities.
Getting a “pre-approved” status also gives sellers that you’re serious about purchasing a home. This status will also help you in the later stages of negotiations where you can always leverage this status bestowed upon you.
- Broker AssistanceContrary to popular belief, home buyers don’t pay for a broker’s services. Rather, it is the seller who pays the broker for assisting in the sale of the property. These professionals are the guiding hand that every first-time house buyer should hold. Brokers are equipped with invaluable market knowledge that will help you make great future investments and also avoid risky purchases.
Brokers will act as your financial and legal councilors throughout your journey to buying your first house. They will help you handle and understand contracts and they will even represent you during the negotiation phase of the sale.
- Comparative Market AnalysisA comparative market analysis allows buyers to gauge whether or not a property that they plan on buying is priced fairly compared to other similar properties in the area. A comparative market analysis takes the property’s physical condition into consideration.
This will also help you determine how aggressive or passive you can be during the negotiation phase. Think of it in the same manner as buying a used car. Every defect you find in the car adds leverage to you in terms of negotiating for a lower price.
Pro tip: Consider hiring a home inspection service to help you determine a property’s CMA value more accurately. You never know what you might find.
- Your Actions During The Final Stage of PurchaseNow that you’ve come to an agreement with the seller, all you have to do is to wait for the paperwork to be fulfilled. Now, this finalization can last up to a month, during which, you’ll be observed closely for any drastic changes or purchases. A few examples of which are: changing banks, buying a car, buying expensive furniture, taking an expensive trip.
These are things that might greatly affect your ability to pay for the house. This is a precautionary measure taken by sellers and agents in order to avoid having to chase non-paying buyers for the mounting debt that they owe. There’s a high likelihood that should you fail to observe this rule, you might just end up losing the sale.
- TimeThis is often a factor that we deal with over the course of our mundane lives, however, it is also one of the most important. As a first time buyer, one of the worst mistakes you can commit is to rush into a transaction. It’s always best to take the time to assess properties thoroughly. Never make decisions while you’re full of emotion. Before you decide to buy a particular house, always make sure to factor in the pros and cons. A calm mind will allow you to make more informed decisions.
Now, remember, don’t be afraid to seek the help of professionals, especially if you’re looking to buy your first house. Alternately, if you have the funds, you can buy prefab homes instead.