How the Residential Housing Market Is Helping Buyers
Do you have your eye on new homes for sale? Buying your first home is an exciting endeavor. Nothing can replace the feeling you get from owning your own slice of the American pie.
Before you go down the real estate rabbit hole, take a minute to familiarize yourself with the process. Having a basic understanding before you begin will save you time and money. Read on to discover these top ten tips for first-time homebuyers.
There’s Never a Best Time to Jump in the Market
You’ve heard it before – your cautious friend, aunt or other loved one may tell you to wait for the market to drop. While well-intentioned, they don’t realize that there is never a good time to jump in. Real estate is cyclical. Expect its value to move up and down, depending on the economy.
Follow your dreams and buy when you’re ready.
Understand What You Can Afford and House Hunt Accordingly
Create a wish list of what you want in a home. No matter how unreachable it may seem – a pool with a waterfall or a view from heaven – include it. Then, before the house hunting commences, find out how much you can afford.
Homebuyers are often shocked at how much they can get for what they’re paying. If you don’t find exactly what you’re looking for, realize that this is an investment in your future. You can always sell or rent out this investment and buy your dream home later.
Know Your Net Worth
Shockingly, most people don’t know their own net worth. Sit down and add up the total value of the following assets:
- Bank accounts
- Investment accounts
- Market value of any other real property
- The value of personal property – including jewelry, art and home furnishings
- The cash value of any insurance policies
Now look at your liabilities. These are any debts you might owe, including:
- Credit card debt
- Student loans
- Car loans
- Personal loans
Subtract your liabilities from your assets. This is your net worth.
Clean Up Your Credit
Run a credit report to check your credit score. This directly affects what interest rate you’ll qualify for. You can request a free credit report on the FTC website.
Unless you’re paying in cash, you must get pre-qualified for a loan. Most lenders will require an application, along with two years of tax returns and the most recent statements on all of your accounts.
Shop for the Home You Can Afford
Now that you know your budget and have been prequalified for a home loan, shop for homes ONLY within your price range. Why? Because you will torture yourself and waste time looking at new homes for sale that you can’t afford.
Identify More Than One Ideal Neighborhood with New Homes for Sale
You just might be surprised at what you find. By looking at different neighborhoods, you’re not limited to the average price of that area.
You might find a fixer upper in an upcoming neighborhood, or perhaps discover an area with extraordinary charm.
Wait to Make Major Purchases
Hold off on making any large credit card purchases. This may affect the interest rate you qualify for, as lenders pull your credit score immediately before escrow closes.
Work with Reputable Agents and Lenders
Ask your homeowner friends and loved ones if they can refer you to any reputable realtors and mortgage lenders. With such an important purchase, you want to work with people who have an established history in the industry, understand the neighborhood and have an unblemished reputation.
Be Flexible When It Comes to the Perfect House
Remember, even if this isn’t your dream home, it’s a stepping stone to owning real estate. As circumstances change, you can always upgrade or downgrade.
Think you’re ready to dive into the real estate market? Now is a good time as any! If you’re interested in reading more about how you can find the perfect home, check out our site!