First time buyers should certainly use the three rules mentioned below as a semi-guide through the early stages of the first purchase. If ytou asked 9 out of 10 beginners what the first step is they will usually say that contacted a realtor is first. Probably 9 out of 10 realtors would have the same response. The truth is as mentioned below...Buyers need to get approved for a loan before they start to look at homes with an agent. So many realtors are hungry for clients right now which makes it very easy for buyers to find someone willing to show them 100 properties..before ever speaking to a bank!
When you finally make the decision that you want to buy a home it's easy to skip over some important steps and jump right into home hunting. That doesn't mean that you shouldn't be searching online, it means that there are certain things that you should know before you actually start looking. This is true for everyone, but especially if you are a first time home buyer. Try your best to do the following:
You never want to pay more for a house than the house is worth. You will also want to find a great deal. Start to study the market values in your area and over time, you'll develop a sense for which properties are overpriced and which ones are under priced. This is a good exercise for all buyers, but first time buyers should really do this because your first home will likely not be your last. You will benefit from the experience, not to mention you will benefit from purchasing a home for less than what it's worth. Instant equity will boost the profit and cash you get when you sell.
2. Get pre-approved for a loan
You should shop around for a loan. Do this early while you are getting pre-approved. You get pre-approved to know exactly how much you can afford (or how much you can actually get a loan for). With a pre-approval, your offer will carry more clout with the seller, and you'll be in a position to close on the purchase more quickly.
3. Decide your needs and wants within your budget.
It's easy to be overly enthusiastic when buying a home. As a first time home buyer, you'll need to be aware of this temptation and really focus on making choices that fit within your budget. When you buy your first home, you'll be taking on a major financial commitment. As a first time home buyer you need to know
that there will be many incidental costs that come up. These incidental costs can really add up and strain your budget. Be careful not to overspend on the house that you choose.
Once you know your budget and the price range of homes your budget will allow, you'll be able to shop for the right home. Again, avoid the trap that most first time home buyers fall into: don't stretch your budget beyond what it can handle.
Now you are ready to start looking at homes.
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