First Home Buyers - Use Your
Head, Not Your Heart
By: Felicity Walker
It's an exciting time. You've saved really hard and have
a deposit ready to buy your first home. You're ready to take the plunge. But
buying a home isn't a particularly smooth or easy experience for most
people, and if it's your first time, it can be even more complicated and
overwhelming. Take a minute to remember that all homebuyers go through
similar confusion and concerns; the only difference is that at least they've
done it before.
So when you're ready to jump into the property market, take a deep breath
and spend some time doing research. The better prepared you are, the easier
the whole process will become. It still might be a slightly bumpy journey,
but at least it won't be quite as bad. You'll also reduce your risks of a
total disaster.
Step 1 - Check Your Finances
I spoke to a realtor once, and he said that the number one mistake first
home buyers make is that they don't make sure their finances are in order
before they start looking. In other words, they get too far ahead of
themselves. They find the home of their dreams, only to discover that they
can't get a loan after all. So save yourself some heartache - make sure your
deposit is sufficient, and that you DO qualify for roughly the loan you
think you're going to need. Some lenders will even pre-approve you for a
loan, which simply means that they assess what size loan you can afford, and
unless you're hiding something or your financial situation changes
drastically in the meantime, they will give you a loan.
Going through the process of applying for a loan will also bring to light
any issues with your credit report. If you know about it now, you have time
to clear up any mistakes or irregularities, long before you actually need
the loan.
Once you have a budget - stick to it! Looking at houses you can't afford
will only lead to disappointment.
Step 2 - Research
Okay, research is a word, a bit like budget, that tends to send a lot of
people to sleep. But it's really important to know what you're looking for
before you start looking! There's no point going to look at houses unless
you know how many bedrooms you want, what kind of house you want, where you
want to live, and so on. Sit down and brainstorm some questions you can ask,
so you don't waste time looking at a property that just isn't going to suit
you. Some questions to think about include:
How many bedrooms do we need - now and in the future?
Are there schools close by?
Will it be convenient for work, or will I need to spend too much time
commuting?
Is it a safe neighborhood?
Does the house need extensive repairs or renovations?
Is their public transportation close by?
Is it in an area where it will hold its value, or even be worth more if I
sell it in a few years time?
Step 3 - The Real Estate Agent
Once you know the area you want to buy in, take some time to research the
local real estate agents. A good real estate agent will be very familiar
with the housing market in that area, and should be patient enough to answer
any questions you have about the process of buying a house. The stronger the
relationship you have with your agent, the better the experience is likely
to be for you. An agent who likes you and is keen to help you find the
perfect home is worth his weight in gold.
Step 4 - Making An Offer
Now you've found the perfect home, it's time to take the big step and make
an offer. This can be a frightening and difficult step, so take your time.
It can also be stressful, because as a buyer you have a budget you want to
stick to, but the seller wants to get the best possible price for the house.
So often there's a bit of negotiating to get through before your offer is
accepted. Take your time, keep cool, and in the end if the seller's price is
out of your reach, be prepared to walk away. The buyers who pay too much are
always the ones who fall in love with a house and get themselves into
financial trouble because they let their emotions lead them into a
commitment they can't afford.
It's also important to read through any contract before you sign it. Make
sure it includes what things will or won't be included in the purchase, such
as appliances. If you want to get any inspections or reports done, make sure
you give yourself the option to cancel the contract if those reports detect
major issues. NEVER accept the agent's word that something is covered or
included - it MUST be in writing.
Step 5 - Home Inspection
Buying a home is a huge financial commitment, and the last thing you need is
to have huge repair bills the day after you move in. So make sure you get a
home inspection. Sometimes you can arrange to get this done before
finalizing the contract, other times it occurs after it's finalized.
Personally, I always sign contracts subject to an inspection. Check with
your legal adviser if you're not sure, but it's worth have a clause prepared
which gives you the right to cancel the contract without penalty if a major
problem is found in a home inspection within 14 days. If major issues are
discovered, you then have the choice of cancelling the contract or perhaps
negotiating a better price.
Step 6 - Closing the Deal
The most exciting moment of all - the ownership of the property is
transferred to you, the buyer. Closing the deal, or settlement, can also be
a time when all of a sudden the size of the commitment you've just made can
hit you in a big way, and lead to buyer's remorse, or doubts about your
decision. Did I pay too much? What happens if I lose my job? Maybe I should
have waited a bit longer to see if something better came along... There's
hardly a homebuyer alive who hasn't thought most of those things, and plenty
more, at some time between signing the contract and moving into the house.
Just remind yourself why you chose the house, and trust that you made the
right decision.
About the author: For tips about choosing the right home loan, check out
http://www.homeloanzonecentral.com
Article Source: www.isnare.com
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