Came across this great article from FOX News & Zillow regarding first time home buyers. I deal with first-time home buyers in the LOUISVILLE area more than any other type of client and I really feel these are important steps first time home buyers should be taking when looking for their 1st home.
As a first-time buyer you probably have no idea how the overall purchasing process works or how to make sure you’re making a smart decision to purchase. And you’ll probably be very surprised to learn how much work it really is just to buy a home. To get you started in the right direction here are a few tips that you should consider:
1. Get lender-qualified and find a good real estate agent
To start off, you should get qualified by not only just one lender, but multiple lenders. Shop around to get the best rates & fees. Getting qualified will give you an idea of what price range you can realistically afford (most people find they can afford more while interest rates are so low!). This will also give you a jump-start on the underwriting process once you do decide to write an offer on a home.
Once you’re qualified and have your price range estimate in hand, you’ll be able to spend your time shopping in neighborhoods that you can afford. Make sure you can actually afford the monthly payment, along with all your other bills. Also, interview multiple real estate agents to find the right person to represent you in your transaction. Get someone that is not only experienced but deals specifically with first-time home buyers as they will usually do a better job of educating you throughout the transaction.
2. Make sure you plan to be a long-term owner
Once you know your price range and have looked at some properties, it’s time to make sure that you believe you can find a property that you will own for a minimum of 4+ years. If your price range doesn’t match where you want to live, you’d be better off staying a renter and saving some additional money until you can afford where you want to live. This is because an owner really doesn’t earn any equity, on average, in a property for the first few year. The truth is, long-term real estate ownership can be a great way to earn wealth and real estate is a "long-term investment". Today in Louisville's market you'll actually find that is it cheaper on a monthly basis to pay a mortgage than it is to rent!!
3. Educate yourself
Buying property is probably the most expensive purchase you'll ever make. Do your homework: Talk to real estate owners, go to first-time buyer seminars, check out online material and speak with trusted real estate professionals (such as myself!!). The more you educate yourself, the better the chances that when things go wrong -- and they can go wrong -- they will only be minor issues, not major headaches. Personally, with every buyer I do a "Buyer Counseling Session" which lays out everything they can expect from Day 1 to closing.
4. Find an affordable property
Most buyers stretch to purchase the most expensive property they can afford. What if you lose your job? How about saving some of your money for retirement? You want your home to be an asset you can afford, not a liability that leaves you with no additional funds over the cost of homeownership. Also, skip the fixers, prize properties or anything that sounds too good to be true because they usually are. I typically tell me clients they you dont want to be "House Broke".
5. Take your time
Ever heard the term "Patience is a Virue"? Realistically it should take you 2 months or longer to buy a quality property that will add to your long-term wealth. Make sure you have a full understanding of what the marketplace has to offer in your price range and that you know what you’re doing. Don't rush into a home because you're scared someone else will buy it before you...there are other fish in the see and more homes will come along.
Those are a few tips to get you started in the right direction. Get qualified, work with a trusted real estate professional, educate yourself & take your time finding a property you can afford and feel comfortable living in...Down the road you’ll pat yourself on the back when things work out well!
Sean S. Williams
Licensed Broker, Realtor®, ABR®, e-Pro®
1st Time Buyer & Relocation Specialist
of Louisville, Kentucky
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