7 Steps to Home Ownership
I know what you want as a First Time Home Buyer. I was a Real Estate Newbie not too long ago myself, so I feel your pain.
What you want is someone to tell you the magic formula, the steps, the price tag, and all the hidden details about buying a home. Well, unfortunately there is no magic formula, no “one-size-fits-all” approach to buying a home. Everyone is different, and has different needs and goals in their pursuit of home ownership.
What I’d like to offer you is at least some very easy steps, so you will be prepared for the wonderful journey of buying your first home.
Without further adieu, here are the 7 Step to Home Ownership:
- Pick a Team of Real Estate Professionals who will take the time to educate you about the buying process. You should expect to work with a Realtor and Lender who will understand your needs and listen to your goals. You can work with this Team to develop a buying strategy which allows you to meet your goals in affordability and quality of home.
- Learn the Different Financing Options. There are many new mortgage programs available today than there were just a few years ago. Loans exist that can assist you with your down payment, or remodeling your new home. FHA, conventional, and other State Programs should all be examined before you commit to shopping for houses. It will help you relieve some stress that the home buying process can conjure up.
- Get Pre-Approved for a Mortgage. Whether the Housing Market is Up or Down, a Seller will always accept an offer from a Buyer that is Pre-approved over any other offer. Getting Pre-approved means you will meet with a Lender and examine your credit score, while also taking into account your assets, debts, and income. This will give you the best idea of what your buying power will be when house-hunting. Buyers who go out looking for houses before completing this step are often disappointed with their ability to buy, since they’ve been shopping in a higher price range. Whatever you do, DON’T SKIP THIS STEP!
- Create 2 lists: Needs vs. Wants. This is an important one also. Make a list of the things you absolutely need in your new home. Maybe it’s being in a certain School District, or having 3 Bedrooms, or all living space on one level. Whatever the criteria is, make sure you cover your needs first, and then make a second list of your wants. This will give you the foundation to work with, and also document your bonus features which may end up sealing the deal when you find a house that fits all your needs, and some of your wants.
- Decide How Long You May Live in The Home. As renters, you may be used to moving every 12-24 months. But as a Home Owner, one of the advantages is that you don’t have to move after only a couple years. Some buyers sill like to move every few years, and that’s OK. But the longer you live in your home, the more equity you will gain by paying down the mortgage amount and over the years get some appreciation. 5-7 years is the National average for owning a home. Most First Time Buyers will live in their first home for a little bit less time, so it’s important to pick a house that most other people would like to live in as well. Try to think several years down the road, and consider re-sale value. Otherwise you could end up in a home which no longer meets your needs, but you’re stuck in because it is too tough to sell again at a good price.
- Be Flexible and Keep it Simple. If you’re willing to work with the Seller of a home, you will be a much more attractive Buyer to do business with. Being flexible on the closing date could make a huge difference. Also, if you are willing to look past minor details of a home (paint colors, light fixtures, etc.) you will seem easier to work with. This could be the edge that you need to get a contract accepted in a Seller’s mind, if you get into a multiple offer scenario.
- There is Always Another Home That Will Fit Your Needs. You may not get the first several homes you want to buy. Someone else might offer more money and you may have face the dreaded “Rejected Offer” That’s OK. Just remember that there will be more homes out there for you. Especially in such a strong Buyer’s Market, the inventory is so high that more than a handful of homes would probably make a great first property for you to buy. Don’t get too discouraged if it takes a few weeks or months to find the right one. Just be ready to act fast, and don’t get emotionally attached to the answer.
Doing some of this “homework” ahead of time will make the experience much more enjoyable. Many people say that buying a home is the biggest decision in their lives. Don’t be hasty – take your time and get as many professionals on your side to help guide you through the process. I wish you many happy years of home ownership.
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