I love working with first time home buyers. The excitement of buying a home is fresh for them, which makes it fun for everyone. Sure, there’s some additional educating and advice to dispense, but I find first time home buyers are lot more receptive to what we Realtors have to say than folks who have bought and sold several homes through the years. But there are some questions new home buyers need to ask themselves before jumping into the fray.
- . Do you have enough money for furnishings?
Often first time home buyers have been renting a home for a while before purchasing. In many cases the home or apartment they are renting is smaller than the home they are purchasing and in a lot of instances appliances are included. Many resale homes will come with the basic appliances, stove/oven, built in microwave and dishwasher, but not all include a refrigerator, washer and dryer. Window coverings are another item that may not be included with a home. And when moving to a larger home you’ll have a lot more space to furnish. Living with some empty space for a while may be okay, but eventually you’ll probably want to fill that space with some furniture;
- . Do you have enough money in your monthly budget to cover repairs?
When renting, repairs are covered by the landlord. When you’re a homeowner YOU have to cover all repairs and upgrades. A home warranty is a great thing to negotiate into a home purchase because it will cover a lot of the larger repairs. But not necessarily all of them. So it is wise for first time home buyers to have a savings account set aside to cover any incidentals after they purchase;
- . Do you have enough cash to cover closing costs, in addition to your down payment?
This is something I encounter with seasoned home buyers as well. Many people get so excited and wrapped up in the home buying process that they forget about some of the other expenses involved with the actual purchase. FHA loans require as little as a 3.5% down payment, but there are still loan, title, escrow and proration costs involved. Sure, you can ask for the seller to cover some or all of these expenses, but not all sellers are willing to do so. These expenses can amount to as much as 2-3% of the purchase price of the home. So for a $300,000 home you may be looking at up to $9,000 in additional costs, not including your down payment. Better to be prepared than to be surprised;
4. Have you considered a new build home?
If your budget can afford it, or if you’re willing to possibly buy a smaller home a newly built home can eliminate a lot of headache and worry. Most notably regarding repairs. A brand new home is just like a brand new car, they’re not guaranteed to be perfect, but they do have warranties, usually for the first year on structural and mechanical and up to 10 years for the roof. So if something breaks down you can go back to the builder and have them fix it. Plus, all the appliances, fixtures, electrical and plumbing components will be brand new. So you won’t have to spend a lot of money on repairs and upgrades for several years. Not only will this be easier on your bank account, but it will also reduce a lot of stress. But remember to bring a Realtor with you if you choose this route. A Realtor can help you navigate through the process. And remember, as nice as that sales person at the build site is, they represent the builder, not you. So they’ll be looking out for the builder’s best interest s not yours. Also, it’s nice to have an experienced Realtor with you when you attend your design studio appointment to choose all the fixtures, trims and upgrades to your new home. A seasoned Realtor can give you good advice as to what items are valuable on the back end when you go to sell this home;
5. Are you really ready to purchase a home?
Beyond the financial aspect of buying a home there’s the psychological aspect of owning a home. It’s a huge responsibility and not one that should be entered into lightly. Peer pressure and life’s expectations can sometimes put pressure on people to buy a home before they are ready. Truth be told, not everyone may want to be home owner. Sometimes renting is not a bad idea. If you’re unsure about your employment situation. If you’re unsure about where you want to live. If you’re unsure about your familial situation. Or ,if you simply don’t want to be tied down for the long term, these may be reasons you may want to hold off buying a home until you’re absolutely ready.
If and when you are ready to purchase a home, it’s always best for first time home buyers to hire a professional, experienced Realtor to help guide you through the process. That way your experience will be an enjoyable one.
You can contact me at 602-334-3757 anytime if you have any questions about purchasing or selling a home.