A Dummy’s Guide To Buying A Home
You are not a dummy!
Don’t be offended by the title.
Buying a home for the first time can be confusing.
Many first-time home buyers don’t have a clue where to start or what they should be thinking about when buying their first home. As TOP REALTORS in Las Cruces, we work with many first-time home buyers and we know the importance of explaining the home buying process to them as well as the importance of educating them on certain aspects of buying a home.
This same information is important to those who are buying a second or third home they will often make the same mistakes
Below are some of the most important tips, steps, and advice for buying your first home. First time home buyers who understand the process and know what to expect significantly improve the chances they will have an enjoyable and successful experience!
The majority of buyers will be getting some sort of financing for their home purchase. We don’t see many buyers who have hundreds of thousands of dollars to buy their first home with. So almost all buyers are going to get a mortgage.
It’s very important when buying your first home you understand mortgages, what the mortgage process is. There are tons of mortgage products available for buyers. Remember that a mortgage is a product or commodity. You are a consumer and the lenders are sellers. You can negotiate to get the best deal.
The first step, before you begin shopping for homes is to discuss your options with multiple mortgage lenders. This is a great way to understand what mortgage product is best for you as well as to learn about the mortgage process.
The next most important negotiation with each lender to get a letter of PRE-APPROVAL. Not just pre-qualification there is a difference. Know what you can and can’t afford before you ever start looking at homes.
Interview and Hire A Top Realtor®
It’s obviously extremely important to hire a top Realtor® when selling a home because the real estate agent is your trusted advisor throughout the process. Confidence in the agent’s knowledge and experience is extremely important. Many buyers don’t take hiring a top Realtor® serious enough though!
It’s especially important when buying a home for the first time that a top Realtor® is hired. Hiring a top agent, especially a “Buyer’s Agent” dedicated to serving only you, when buying your first home can make all the difference between an enjoyable home buying experience or a miserable one!
Learn About Real Estate Contracts & Contingencies
Now we realize you’re not an attorney and you don’t need to know the wording in a real estate contract verbatim. When buying your home, you should however “understand” real estate contracts and also contract contingencies.
A purchase and sale contracts are in place to protect all parties. It’s important that when buying your home, you at least understand the major points of a contract. Your REALTOR should explain the contract until you understand what you’re submitting to a home seller.
One of the most important parts of a real estate contract is the contingencies section. There are many contingencies that home buyers should include in a purchase offer. Some of the most important contingencies that buyers must include in their purchase offer (or) are home inspection contingency, and mortgage approval contingencies.
Contract contingencies are placed in a purchase offer to protect a buyer. It’s very important when buying your first home you understand which contingencies you can include!
Have Realistic Expectations
One of the biggest mistakes made by all home buyers is they set unrealistic expectations. Whether it’s because a buyer thinks what they’ve been pre-approved for can buy them a mansion or because they think they can offer a homeowner $20,000 less than market value, it’s important to have realistic expectations.
When purchasing your first home it’s important to set realistic expectations in terms of the size of a home you can buy, the condition, the upgrades, the location, and many other things. It your Realtor’s job to be your Trusted Adviser and help you determine what is realistic and what is not.
Don’t Make Any Silly Moves Along the Way
Too often do first time home buyers make silly moves during the home buying process. Have you ever heard of a friend who was denied for their mortgage after they begun the process? Well believe it or not, some buyers make silly decisions after they’ve begun the home buying process.
For example, a buyer who gets approved for a mortgage who goes out and buys a nice shiny new car could potentially be costing themselves their new home. Adding additional debts is one of the most common reasons why buyers are denied for their mortgage.
Once you’ve been pre-approved to buy your first home, don’t make any silly decisions, period! If you’re unsure how something may impact your home purchase, ask your real estate agent or mortgage consultant!
Research, Research, Research!
With any major purchase that I make I do a ton of research, in fact, probably too much! Since buying a home is one of the biggest purchases you will make in your lifetime, doesn’t it make complete sense to do a ton of research?
For example, if you were thinking about making an expensive home improvement to your home, wouldn’t you want to know how do home improvement projects impact home values? Yes, you should absolutely want to know this information!
When buying your first home it’s highly recommended to do a ton of research. With the internet it is extremely easy to find quality information relating to home buying!
If you were wondering if you should have a home inspection when buying a home, do a simple a Google search with your question. There should be tons of resources that provide information about the PROS and CONS of having a home inspection. By completing this research, it should help you be able to determine if you should or not. This is only one example of why researching a ton makes a lot of sense!
The Bottom Line
Buying your home can be difficult and confusing but with the proper steps, it doesn’t have to be! It’s extremely important when buying your first home you understand the process and are comfortable with the major decision you’re about to make.
If this is your first home, this free, downloadable guide is a great start to educating yourself on the purchase of your first home. I always stress to first time home buyers that no question is a dumb question. We always encourage first time home buyers to ask lots of questions!