House hunting is often described in terms of dating after seeing an online profile and exchanging a few emails. Then you meet the potential love interest at Starbucks and wonder if this is IT. Same thing if you’re a first-time homebuyer walking into a listing. That gleaming new kitchen can force your heart to pump faster. And that seductive pool in the backyard? It has you picturing yourself floating around with margarita in your hand. Well, let us help you with this “First-time Homebuyer’s Guide.”
The First-time Homebuyer’s Guide Basics?
What do Realtors and other experts warn you as a first-time homebuyer? Their warning is simple, try hard to put the sizzle on hold and look at the entire steak. Our first-time homebuyer’s guide will help you navigate through this process.
First, remind yourself of those non-negotiables. If 4 bedrooms are a must, but now you’ll settle for three because the house has a killer sound system or a walk-in closet to die for, you are selling yourself short. When it comes to your “foreseeable future” home, it’s important to stay on the track that includes the location, price, and home size, school district, and amenities you had your hat set on before you walked in, even if the home’s exterior doesn’t float your boat.
Determine if your emotional triggers are taking over. What is really at play if your adrenalin is pumping at the sight of something you see as you walk through the listing? Does it remind you of a scene from your childhood or look like a photo from a magazine that had you salivating? Although they are now rare, sometimes old-fashioned, arranged marriages turn out better than those based on animal attraction. The main thing is to get real with yourself because falling for a home because of how it makes your heart leap before adding up its characteristics typically doesn’t end well. Buyer mistakes are made during moments like these, making you wish you had paid more attention to the one-butt laundry room or the too-small bedrooms instead of the granite-topped kitchen island with lots of bar stools. [Read How to Prepare First-time Homebuyers for Home Ownership]
What do you plan to do in the future?
Do you want a project? If all you see is potential for a future change instead of what you’ll have to live within the meantime, you may regret it unless you already have stellar DIY skills or deep pockets. Even the best intentions for renovation can become a pipe dream when your economic picture changes, forcing you to put up with those 1960s bathrooms in perpetuity, or that closed-off kitchen that takes you away from guests when you entertain.
Before considering buying a house with “possibilities,” it’s a good idea to get with a professional and estimate the future cost of those changes as well as the feasibility of your ideas. Remember that as a first-time homebuyer you should know that, taking down a load-bearing wall is more costly than you think. And if it’s a house you may only stay in for 5-7 years, make sure the improvements you are considering don’t make the house the odd one out in your neighborhood in terms of value and future pricing to recoup what you spent. A house is an investment. And your return on that investment is what might make a difference in being able to afford to move up to a larger home someday. That is why this first-time homebuyer’s guide is very important to you.
Is the company a worthy partner?
Look at the company it keeps. Like a potential partner in life, you can tell a lot about a house by the friends it keeps. If the home you’re considering is meticulously maintained but the rest of the neighborhood need major TLC, it could be a reason to walk away. In this case, that “rising tides” thing didn’t work — perhaps because the neighborhood is full of rentals, or because most homeowners in the neighborhood stopped having pride of ownership a long time back. You may end up buying the most expensive house in the neighborhood because of your love at first sight. And sometimes that pans out. But in general, it’s best to have room for equity to grow, not stagnate or dissipate.
Seller disclosures are like online dating profiles. As a first-time homebuyer, you may not know what’s not in the narrative. Naturally, if crime in the neighborhood is higher than in other areas, no listing agent will mention this in the listing, since they expect buyers (especially those represented by real estate consultants) to find and study statistics. Will there be a future use for that empty expanse of land across the house? You may not see that mentioned either unless it’s for more homes to be built. Even then, if you are buying a 2500 sq. ft. home with a ton of bells and whistles, the homes eventually built across the street may be multi-family housing, rentals, or tiny bungalows on postage-stamp-sized lots. You can find this information at any local city planners’ office.
Patience is key if you are a first-time homebuyer
Then there is that “fear of loss” thing in a buyer’s market. Multiple offers abound these days and you think if you don’t offer on just about any house that looks like a decent choice, there will be no more left and you will stay in your rental or your parents’ basement in perpetuity. It’s human nature to want someone everyone else wants. Determine if you are simply trying to win first prize or if you really want the house.
By the same token, just because a house has been on the market a while doesn’t mean it’s not “the one.” Don’t let a good one get away just because others saw the house in a different light. Like finding a soul mate, you have to kiss a lot of frogs to find your prince or princess. It could be that people ignored the listing because the online photos looked grainy or the home’s exterior was off-putting so they just drove by instead of even going inside.
Our first-time homebuyer’s guide advises that, when you’re looking for a partner, it’s wise to not be distracted by their physique, their great one-liners or the flattery they use on the first few dates. Instead, pay attention to character. The same applies to buy your first home. If the entire “package” adds up, you may have a winner. But it there are glaring red flags you think you may deal with at a later date, don’t ignore them, either.
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[Download this MILLENIAL HOMEBUYERS GUIDE]