First-Time Home Buyers Five Things You Should Know Before You Start Your Search

One of the most important milestones that a family comes to is the purchase of their first home. Though the first home purchase is a dream for most, such dreams can often cloud out the necessities. The purchase of a home requires a buyer to bring together several seemingly contradictory elements.

Unfortunately, the days when a buyer and seller could simply shake on a deal and exchange keys for paperwork are long gone. Though there are any of a hundred things that a buyer must account for, especially for a first-time buyer, the process can be condensed to five primary elements.

If you are a first-time home buyer, consider these five things before moving forward on any purchase :

1. Financing & Pre-Approval

Though financing is crucial to the closing of any real estate purchase, it is especially so for a first-time home buyer. While buyers who have owned a home before have had the opportunity to establish a good credit history with a proven track record of satisfactory mortgage performance, along with tangible equity to work with, first-time buyers do not have such good grace when starting out. A first-time buyer will need to have not only solid credit, but will need to come up with their down payment without a previous home’s equity to draw from (up to 20 percent of the purchase price of the property depending on their situation), have sufficient income and assets, and the demonstration of the ability to pay closing costs independent of mortgage financing.

It is also crucial for a first-time home buyer to get pre-approval from a qualified lender for a mortgage before beginning the hunt for a property. Buyers who already have a home have equity to work with, and with that comes a rough estimate of the price range that they will be comfortable with. First-time home buyers however, have no such equity, so the ability to show a cash down payment is crucial to acquiring funding. If you’re a first-time buyer thinking about buying a home, make it a priority to get all your ducks in a row prior to speaking with a lender for pre-approval. Once pre-approved, the exciting search for your first home purchase can begin!

Getting pre-approved allows you to know beforehand what price range you can start shopping for, which can invaluable for narrowing your search, and can even help you to negotiate a better price if. Buyers that have received their written pre-approval from a lender can have a stronger bargaining position, because the seller can be reasonably certain that the buyers bid will successfully make it through the financing condition.

2. Finding A Realtor

A good Realtor is worth his weight in gold. A Realtor can help you find exactly what you as a buyer are looking for, help you navigate the marketplace and the closing process and also help you negotiate the perfect deal. As a first-time buyer, you will find it extremely helpful to have the services of a good Realtor as early as possible in the process. The task then rests with finding that Realtor! Coldwell Banker has some of the world’s finest Realtors available to home buyers. But whichever Brokerage you choose, as a buyer, working with an agent who understands your needs, who knows how to maximize the tools and resources they gave at their disposal and who is committed to finding properties that best meet your criteria is often the wisest choice.

3. Property Search & Negotiation

Negotiating the closing price of the property is not as complicated as it’s made out to be and as a first-time buyer. you don’t need to be intimidated. As a buyer, if you are already pre-approved and have the down payment and closing costs in cash that you need, your negotiating position should be rock solid. In fact, in some cases it can actually save you money. In situations where the seller knows their buyer should have no trouble securing financing during the financing condition – or, as a result, doesn’t require a financing condition at all with their offer – they may be incented to settle for a lower sale price in exchange for peace of mind and a smoother closing process.

4. Property Appraisal and Inspection

For first-time buyers, having your home both professionally appraised and inspected are critical steps in the home buying process. A property appraisal is performed to protect both the lending institution as well as they buyer to ensure the value of the property meets the proposed selling price. It is typically initiated by the bank and is usually done without any involvement from they buyer whatsoever even though the fee for the appraisal is ultimately incorporated into the buyer’s costs when the mortgage is arranged.

The property inspection however, is something the buyer is responsible for arranging themselves. The importance of a complete home inspection cannot be stated strongly enough as it really is the only way a first-time buyer can discover things about the property that were previously unknown – things as a buyer, you want to know about before you sign a purchase and sale agreement so that you’re prepared going into the deal instead of being surprised by unexpected and sometimes costly repairs when it may be too late.

The closing process can be arduous even for seasoned property buyers, but for first-time buyers, it can be absolutely nerve wracking. Even the best deals can fall apart at closing for any number of reasons, from a lender backing out of financing, to the inability of the buyer to pay part of the closing costs. The closing process is also one of seemingly endless paperwork. As a first-time buyer, a good Realtor will help you through the closing process. As the buyers arbiter, a Realtor can make the tough calls, use experience to understand where everything stands at a given moment, and forestall any problems before they become potentially debilitating.

For first-time buyers, these five things should be at the top of your list when starting your home buying process. And remember: it is a very big step that comes with a lot of responsibility, but it is also one of the most exciting times in our lives. And if you’re working with a Realtor you’re comfortable with and who understands your needs you should also be able to have fun with the process. Good luck!

Dont have a realtor yet? We can help. At The Real Estate Centre, youll find helpful, knowledgeable realtors who can help you find your dream home fast and at the right price.

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