As a first time home buyer, the process of finding your perfect home can be daunting. From picking the right neighborhood, to getting your finances in order—the big decisions tend to add up. The good news is, working with a team of experts, like our Barkett Realty real estate agents, the process can become more fun and exciting rather than intimidating.
The search to find your perfect new home is exhilarating. By scrolling through real estate websites such as Zillow or Realtor.com, or driving around your favorite neighborhoods—you start to build a vision of what your dream home would look like. Although it’s helpful to know what you like ahead of time, it’s important to tailor your interests based on the area you want to live in.
We’ve broken down the basics of purchasing residential real estate, so you can feel confident buying your ideal first home.
Know What You Can Buy
It’s recommended that first time buyers first obtain financial pre-approval (lender/proof of funds for cash purchase) and complete a buyer’s consultation before their search for a home really begins. Just like you wouldn’t dine at a fancy restaurant unless you knew you had the funds to pay for it right, you don’t want to shop for homes that exceed your price range.
Clarifying the amount you can offer is the first step in deciding what kind of home you want and can afford to purchase. By quantifying what you can afford, this takes the anxiety out of the process and allows Buyers to focus on the fun part of the process, which is selecting the perfect home.
Shopping For Your New Home
Once your financing pre approval is completed, it’s time to sit down with a real estate agent to go over what you’re looking for. A few important questions to ask yourself prior to meeting with an agent include:
- How many bedrooms and bathrooms do you need?
- Do you require an additional space for a home office or playroom?
- Do you have specific requirements for schools or proximity to work?
- Are there “deal breakers” in a home, such as maintenance requirements, major renovations needed, or utility requirements?
With this information in hand, an agent is able to conduct searches using digital tools such as the MLS (Multiple Listing Service) database to find the home that meets your needs. Finding a local real estate firm with specific expertise in your chosen market is extremely beneficial. A truly savvy agent can provide local perspectives and unique insight into available properties before they’ve been listed in the MLS database—giving you the competitive edge needed in a market full of buyers.
Understanding the Costs
While you have pre approval in hand when you’ve started shopping, it’s important to also be selective about ultimately choosing a lender. Even though there’s a sense of urgency, don’t rush into a decision when selecting a lender. You’re evaluating them as much as they’re evaluating you. Some questions to ask your lender include:
- What are the total costs involved with the loan?
- What is the best loan program for me, based on my financial goals and situation?
- What are the service ratings for your company and where can I find them?
Choosing the right lender is very important in making sure your financial goals are achieved—working with an expert residential agent will grant you access to many vetted lenders they know and trust.
In addition to purchasing the home itself, there are other costs that first-time homeowners should be aware of. Fees such as home inspection, land surveys, lender appraisal fees, and titles can add onto your price tag. Although it sounds intimidating, there is no need to worry. Some fees are the seller’s responsibility and a great real estate agent can help you navigate your budget so you never overpay for your new home.
The home inspection process is all about making sure you, as the buyer, know exactly what condition your new home will be in upon purchasing. Hiring a professional inspector to evaluate the condition of the home, grants you the opportunity to obtain an objective, comprehensive analysis of the physical condition of the home that might not be obvious to the untrained eye. As a result, any safety issues or necessary repairs can be addressed and taken care of. Your inspections might include:
- Chimney & roof inspection
- Lead-based paint inspection
- Pest, termite, or rodent
- Radon inspection
- Electrical inspection
- Heating, ventilation and air conditioning (HVAC)
- Asbestos Inspection
After inspection, you’ll receive a detailed report on the condition of the home. Depending on the results, you’ll have several options moving forward. In your contract, you should have an inspection clause included, which states that the home you buy will be sold exactly as it stands upon completion of a satisfactory inspection.
As the buyer, you are the only one who must be satisfied by the inspection, and the “As-is” clause allows you an escape route if the inspection uncovers an unexpected issue that turns out to be a dealbreaker. Alternatively, if a few repairs are needed you can either negotiate that the cost of those repairs are accounted for in the final asking price, or make an agreement with the seller that those repairs are completed for you before closing—ensuring you are satisfied with the home once the keys are handed over.
Appraisal and Survey
Once the inspection on your potential home is complete, it’s important to evaluate the property’s market value or conduct an appraisal, to ensure you’re getting your money’s worth and the lender’s investment is being protected. A professional appraiser selected by your mortgage lender through a blind-bidding process will assess the value of your home based on a range of factors. Don’t be discouraged if the value of the home falls short. It can be an opportunity for your agent to renegotiate on your behalf saving you money in return.
In addition to an appraisal, your lender will require that a legal land survey be completed of any property on which they issue a mortgage so that they can obtain a clear lender’s title insurance policy. The survey will provide you, as a new owner, with invaluable information, such as the location of the property lines, as well as any easements or clearance requirements that could prevent you from adding new features to your home, like a new fence or pool.
You’re finally one step away from getting the keys to your new home—it’s almost closing time! Closing is the legal transfer of the title of the home from the seller to the buyer. This formal meeting will include most parties involved in the transaction, and will usually take place at a title company or lawyer’s office. Your closing officer will coordinate the signing of documents and the collection and disbursement of funds. Your real estate agent will make sure you have all of the necessary documentation you need to complete the closing successfully. Then, the fun begins!
Working with an expert
Buying your first home is all about patience, preparation and trusting an expert to guide you through the process. At Barkett Realty, our residential real estate agents have unique local insight and expertise to ensure you’ll find the home of your dreams. Contact our team to get started!