Tips for first time homebuyers
If you are a first time homebuyer, you are probably extremely excited about this phase of your life. While excitement and enthusiasm are great things to motivate you in this huge decision, they can also be extremely dangerous emotions.
In their eagerness to become homeowners, many first time buyers neglect some very fundamental “rules of the game”. As a result, they often learn the hard way. Here are some tips for first time homebuyers that could help you avoid the common traps that individuals in your shoes have fallen prey to.
YOUR MENTAL ATTITUDE
The very first thing that you should know about owning a home, is that it is dramatically different from renting! There are plenty of responsibilities and obligations that homeowners inherit, which as a renter you wouldn’t give second thought to. For instance, the upkeep and maintenance of the property is primarily your responsibility.
TIP: Homeownership is an investment – probably one of the largest investments of your lifetime. You need to have the mental discipline to deal with that. If not, you may not enjoy being a homeowner all that much!
Unless you are flush with cash and plan to buy the home outright for cash, you’ll need to review your financial situation first. Before you even consider buying a home, ask yourself these questions:
- Is my credit score good enough to qualify me for a loan?
- Can I show proof of eligibility for a loan/mortgage (regular pay slips, tax returns, employers guarantee)
- Do I have sufficient funds to put the minimum down payment?
- Will I have enough to live on after I start paying my mortgage?
- Can I build up a contingency fund – in case there is a flood or roof leaking event?
TIP: If either of these areas are suspect, work on them BEFORE you make an offer for your first home.
YOUR FIRST HOME
Here’s what you should consider about the home you are planning to buy:
- What type of a home are you looking for: Condominium property, detached, semi-detached, bungalow, high-rise?
- How big/large of a home do you want? How many bedrooms, what types of amenities, how old should the structure be?
- Where should your first home be located: In the city, suburbs, how far from work, do you want it close to schools, shopping centers, highways, public transport?
TIP: Without having a definite idea about these elements, you’ll fall into the typical grocery shopping trap: Going to the supermarket without a shopping list! You’ll end up buying more/less than you need, and may even spend much more than you intended!
YOUR PURCHASING PLAN
Unless you are extremely savvy about real estate, you’ll probably want to plan exactly how you will purchase your home – especially if this is your first time. Here are some things to help you in that respect:
- Shop around for a suitable Realtor or Real Estate Agent
- Talk to your agent at length about what you are looking for and how much you plan to spend
- Keep an allowance for home renovations and moving costs
- Before you buy, make sure you have an impartial home inspector on tap – not someone referred to you by your Realtor
- Get in touch with home renovation contractors – in case you need their assistance
- Insist on seeing several properties before you settle on THE ONE!
- Make it a point to visit THE ONE several times prior to making an offer
- Check out the area during various times of day to get a feel of what your new neighbourhood will look like
- Never make a final offer until your home inspector says you’re good to go
TIP: Resist the urge to get into a bidding war with other prospective buyers. Always have your budget in mind, and if you are priced out – so be it! Move on to the next one.
YOUR GOOD TO GO!
With these tips in mind, you’re good to set out on the path to looking for, buying and owning that first dream home. As long as you follow the plan diligently, you’ll soon be living in your own home.
Happy hunting, and good luck!