Being a first time homebuyer can feel quite intimidating – you’ve got to deal with agents, sellers, rival buyers, banks, and title companies. And it’s not always clear what role each of them plays in the process. We have worked with many first time homebuyers. It’s great to guide them on the journey of property ownership and help set them on the path to building their wealth through real estate.
Any first time homebuyer should appreciate that they always have access to many professionals who can help explain the various tasks and processes required to buy a home. It’s not like you’ll walk through the experience blindfolded.
To help you on your way and find out more, here’s a quick list of tips for first time homebuyers. You’ll find the act of buying property is not as intimidating as you might have feared.
- Start saving: That means not only reducing your day-to-day spending but also working to reduce regular payments on debts for items such as a car or personal loan. These obligations will reduce the amount of money a lender will allow you to borrow.
- Work out a budget: Investigate how much you might be able to borrow. Factor in the expenses of buying a home, such as closing costs and moving. You should then have an idea of what you can afford. Setting your expectations early on will focus your home hunting efforts and avoid disappointment.
- Arrange financing: Spend time exploring your options. Some banks demand a 20% deposit; others are more flexible. Perhaps your parents will co-sign for the loan, or part of it. Consider using a local lender as they will guide you and recommend suitable loan options.
- Pre-approval is good: A lender won’t give you a pile of cash based on your salary. They’ll grant “pre-approval,” which means you can make a monetary commitment with confidence. However, the lender will finalize its approval once they’ve valued and approved the property you intend to buy. Do not sign any document that waives your right to pull out of a transaction until you are approved or you risk your lender refusing you.
- Get mentally prepared: With your finances lined up, you need to think about the dynamics of buying a home. If you find your dream place, you better believe others will love it, too. So, be prepared to move quickly to beat the competition.
- Find a great agent: For a first time homebuyer, a great agent will make the experience smoother and less stressful. When selecting an agent, ask each one to share with you properties they’ve bought for other clients. This will indicate whether they can find what you’re seeking.
- Go hunting: House hunting is fun but exhausting. In a hot market, it can get stressful because of buyer competition. Don’t be put off, and keep your focus. You may miss out on a few properties, but there are many more out there.
- Be confident: When making an offer for a home, be confident. Don’t ask your agent to make low ball offers just to see if the seller bites. You risk being labelled a time waster and go to the back of the line. You have every right to make any offer, but be realistic if you want the property.