In 2019, Americans bought a total of 5.34 million homes across the country. Although COVID-19 hit the housing market hard, experts hope that this year will be a return to normalcy.
Are you looking to join the ranks of home buyers and owners across the country? If you are, there are some things you’re going to want to do that will make the process easier. Getting things in order beforehand is especially important if you’re a first-time homebuyer.
So what do you need to know?
Keep reading to learn about some of the dos and don’ts you’ll want to keep in mind as a homebuyer.
Do Keep Track of Your Spending
There’s no room for estimating or guessing when you buy a house. You need to have a clear understanding of your current budget, and especially of how much money you spend each month.
Understanding your spending habits is important, as it can give you some insight into which type of mortgage plan is right for you. Make sure to take all of the money you spend each month into account.
Aside from figuring out how much money you spend, make a point to determine where your money goes. In doing so, you’ll be able to identify areas that you can cut back on.
Do Look at Your Savings
Aside from looking at your spending habits, you’ll also want to consider how much savings you have. Remember that there will be additional costs to take into account when buying a house.
The down payment, closing costs, home inspection, and other expenses can all catch you off guard if you aren’t prepared. Make sure that you have enough money set aside in the bank for all of this.
You’ll also want to have enough money in savings to cover the first few months of living expenses. This will provide you and your family with a safety net in case something unexpected arises.
Do Be Realistic About What You Can Afford
It’s tempting to go for the biggest and best option, but it’s no sense getting something that you ultimately will struggle to afford. Be realistic with yourself, and only buy a house if you know that you can finance it without a problem.
Most financial experts recommend paying no more than 28% of your monthly income on house payments. Of course, if you can go lower than that, that’s ideal.
Your realtor can help you determine a realistic price point that’s in your budget. In some cases, they might recommend living in a multifamily unit. Discover more about multifamily properties here.
Do Work With a Quality Realtor
A quality realtor is a key to finding your dream home and selling your current one, if necessary.
As is the case when hiring any service, make sure to do your research beforehand. Read reviews, and if possible, get a referral. You want to end up working with someone that you trust.
You’ll also want to make sure that the two of you communicate well with one another. You need to know about everything that goes on in the buying process, so whether they call, text, or email you, decide on a system and stick to it.
Don’t Buy the First Home You See
It’s tempting to sign off on the first home you see, especially if you live in a region that has a competitive housing market. However, while you might think that you love it, don’t make the mistake of buying the first home you see.
A good realtor will show you many suitable homes, all of which fit your wants and needs. They’ll make a point to explain the pros and cons of the different ones you look at, as well as offer their advice as to which ones they feel are best.
Committing too early on can cause you to waste money. Who knows, the next home might have offered you all of the features you wanted for a cheaper price.
Don’t Forget to Negotiate
Remember that the price the seller has listed is what they think is fair. A realtor might have helped them decide on that number, but at the end of the day, you’re welcome to negotiate or offer them something lower.
If you feel that the price is too high, your realtor can make a comparative case as to why it should be lower. They can look at other similar houses in the area to make the argument that the price is too high.
While you should always try and negotiate down, remember that sometimes, the opposite can happen. If there are a lot of interested buyers vying for the same house, you might have to pay more to get it.
Don’t Forget the Home Inspection
You might think that the home you’re interested in looks pristine and flawless, but you never know what’s hiding under the surface. Because of that, performing a home inspection is a must.
A home inspector will come to the house and look at everything from the foundation to the ceiling—and everything else in between. If they dig anything up, you can ask the seller to fix the problem or offer you a cheaper price.
In extreme cases, you can rescind your offer altogether.
Be an Informed and Knowledgeable Homebuyer
Buying a home is always going to be a stressful process, which is why it’s so important to go into it with a gameplan. If you’re about to become a first-time homebuyer, make sure to remember these do’s and don’ts that will help you through the buying process.