There has never been better time to own a home, but it has never been harder for first-time home buyers. It seems like everywhere you go, people are talking about the real estate market. Whether they are buying, selling, or just heard about prices soaring, real estate has become an everyday conversation. However, this might have hurt the first-time home buyer just as much as lower rates have helped. With that being said, now is as great as a time as any to buy a home. Are you a first-time home buyer? Here are some questions to ask yourself before you start your journey into homeownership.
First-Time Home Buyers
Many people have become interested in buying their first homes, especially the millennial generation. However, many potential buyers have little knowledge of what they need to ask themselves before making the leap. While reaching out to a lender will answer some questions, potential buyers should have a grasp on a few concepts before reaching out. Before ever making a call to your lender, ask yourself this: How is my financial well-being?
Many buyers insist that they are ready to buy a home, but have not created an emergency fund with up to six months of pay to fall back onto. Not only should a potential buyer have this emergency fund in place, but they should also have money saved for the upfront costs of buying a home. The upfront costs of buying a home often times include down-payments, loan origination fees, and other closing costs. Potential first-time home buyers should also have a general knowledge of their spending habits and their credit scores. Both of these will play a key role in if the buyer is considered a good fit for a loan. If a potential buyer can answer this question honestly, and are comfortable with their financial well-being, then they are ready to move forward to the next question.
First-Time Home Buyers
The next question a potential buyer should ask is: What are we looking to purchase? There are many options out there for homeownership. Those options often times include: ranch homes, townhomes, traditional single-family homes, condominiums, patio homes, and more. Every option has their pros and cons varying from HOA to having a yard for your pets. Whether a potential buyer decides to live in a condo or a traditional single-family home, they should have an idea of what they are looking for. Once a buyer can determine what they are interested in, they may move onto the next question: How much home can a potential buyer afford?
How much home someone can afford often times plays into what their options will be. This question goes hand-in-hand with financial well-being, as they will both determine if they are ready to buy their first home. Home affordability is a key point in the home buying process. After reaching out to your lender and receiving an estimate on how much home you may afford, the potential buyer may start their true home search. However, because a potential buyer approved for $250,000 DOES NOT mean it is smart to look at $250,000 homes. This is because a potential buyer may have to negotiate price, and often times forget about homeowner costs. Some costs that new buyers overlook are utilities, groceries, clothes, transportation, and more. Many first-time home buyers make this mistake and end up “house poor.”
First-Time Home Buyers
Now that a potential buyer has been through the vetting process of home loans, the final question remains. As a potential buyer, the final question to ask yourself is: Who will help me through this process? This is where your local real estate experts come in play and can work their magic. Buying a home for the first time is an overwhelming, and usually stressful time for new buyers. During this stressful time, it is beneficial to have a real estate agent who will eliminate as much stress and uncertainty as possible. Agents have the tools and resources, such as the MLS (multiple listing service), to aid in this process. Agents also have fiduciary duties to the clients, meaning they are obligated by the oath they personally took to become an agent to act in your best interests. If you are a potential first-time home buyer and are wondering when you should use an agent, we are here to help and have articles on our website to help inform a new buyer.
First-Time Home Buyers Conclusion
Once a first-time home buyer has completed this short questionnaire, they may finally be able to close on their first home. Homeownership has always been an American dream and we hope this article helps create new home buyers. We will later cover the home-buying process to help everyday people understand what they are going to expect. Premier Homes Realty takes pride in helping create first-time home buyers and offer many resources to our clients. If interested in buying or selling your home in this market, we are glad to help. To reiterate, there has never been a better time to own a home, even though it may be hard to obtain one. Do not get discouraged, we are professionals and are here to help throughout the process.