First Time Home Buyer Resources
While home ownership is the American dream, it comes with a number of financial and emotional considerations. Perhaps the most recognized responsibilities are the ongoing mortgage payments, taxes and overall home maintenance. While some buyers think of home ownership as “renting with more flexibility,” it’s critical you take stock of your finances and expectations before making the leap into home ownership. Yes, you can finally have that dog that wasn’t allowed in your current apartment and yes, you can decorate as you see fit but you may be subject to the standards and tastes of your fellow neighborhood home owners.
First Time Home Buyer Questions:
Are you ready to buy?
Recognize that buying a home means allotting a portion (many times a very large portion) of your income and time toward repairs and ongoing maintenance. Balance the risks of home ownership (financial and emotional commitment) with a realistic expectation of the rewards in having “your own place.”
How much can you afford?
Purchasing a lavish home is not worth the stress of lying awake at night trying to figure out how to afford it. Buying a modest home now doesn’t preclude you from stepping up to your dream house in the near future once your finances and salary make this a more realistic possibility.
What is your debt-to-income ratio?
Lenders look very carefully (especially these days following the mortgage crisis) at your debt to income ratio. Ideally, your overall debt should never be more than 40% of your income with your housing debt limited to no more than 32%. This percentage may go much farther in rural or less populated areas than in hip, urban centers. The mansion in the country may translate to a fixer-upper efficiency in a desirable city block.
What do you want?
Are you horrified at the thought of painting and spackling, much less taking down walls and putting up molding? Do you have the time for the lawn care your property may require? Are you looking for a community with strict rules on landscaping and placement of garbage cans to maintain the quality of the subdivision or do any type of restrictions make you want to run for the hills? The answers to these questions are critical in helping you narrow your search for the right property for you and your family.
We Can Help
Our team is dedicated to helping you find the right home at the right price. A key part of this consideration is having a good agent who listens to you and will work hard on your behalf. Once you hire us, we’ll help you document your objectives against your budget to determine an appropriate strategy for properties that fit this ideal.
Keep emotions in check. While home-buying can be a very emotional process, it’s important to never get too emotional about a home. Keep your core objectives in mind when evaluating a home on what you need and want vs. getting distracted by a bright, shiny feature that never made your list in the first place. We will help you stay on track by carefully reviewing the pros and cons of each home you’ve visited after every showing.
Don’t be afraid of investing in a good real estate lawyer. The legalities of transferring the home and associated land from one owner to another are tricky and increasingly complex with new environmental rulings. Hiring a lawyer for an investment now of several hundred to a few thousand dollars is your best defense against an exponentially larger bill in the event of a future issue. We are happy to recommend several lawyers who have helped other clients through this process.
Make the offer. We can help you with all of the steps of what can be a tough process to navigate on your own. This means helping you prepare all the necessary paperwork before submitting a formal offer. Typically an offer involves a deposit check to the seller’s broker to demonstrate your commitment. The seller also may at any time reject your offer or counter with another offer as is typical as the two parties arrive at an agreement.
Take care of all necessary inspections. An inspection is a critical aspect of the home purchase and can point up and preclude issues that could become significant drains on your finances in later years. In particular, a home inspector will look for signs of harmful materials such as mold, lead paint, and/or asbestos and must certify his or her results. A good inspector will also check for leaks, pests such as mice or termites, and faulty wiring. The inspection costs several hundreds of dollars but again, arms you with facts and intimate knowledge about the property in which you’re investing. We maintain a list of qualified inspectors that have helped other clients.
Do a final walkthrough as the last step before closing your deal. The walkthrough gives you the opportunity to check that everything you and the seller agreed upon is completed prior to the final signing. In some cases, if work isn’t completed and you still want to go through with the deal, you can have the seller put money in escrow until the final repairs or work is done. Again, we can lead you through this process, compiling and checking off the punch list.
We’re here to assist you with all aspects of buying your home – from helping you determine your objectives and budget to dropping off the keys. Call us to help us help you get started in realizing your dreams.
Contact us for more information about first time home purchasing.