Picture this! You have done what you needed to get ready to buy your first home. You contacted a mortgage professional and got pre-approved for a mortgage. You have interviewed some agents and have selected one to help you with your home search. Your agent has asked you for you wish list for your first home. What did you have to have and what would you like to have? What is your budget? What areas are you looking to buy? When did you want to get started looking for your first home? You look blankly at the real estate agent and don’t give an immediate reply. Instead, after pausing for a few seconds, you say you will need to get back to him with answers to his questions. What do you do?
While the conversation rarely goes like this, you will eventually have to decide certain things while looking for your first home. Decisions have to be made so you real estate agent can build a solid search and showing schedule so you can find a house as quickly as possible. Below you will find some frequent questions to consider while looking for your first home. As part of this process, you should ask your agent to create for you a customized home search portal so you can start to explore properties in interested areas.
Before reading over the questions, be sure you are on the right step in our frequent questions for first time home buyers to consider. Check here for a list of the other frequent questions.
Here are the frequent questions to consider when looking for a your first home.
What is my budget? Huh. Didn’t I already do this when I got approved for the mortgage? Yes. You worked with a mortgage professional to figure out how much of a house you can afford. However, this does not necessarily mean that you have to spend that much money on a house. You need to look at your current budget and figure out your comfort level when it comes to your mortgage payment. Most first time home buyers will get approved for a mortgage at a much higher price point than they can actually afford. You have to weigh the risks of getting a home too big for your budget including any future expenses you might incur. Most experts say that 30 percent of your budget should be put towards housing. If you are planning on buying a house over this 30 percent, you might need to rethink your plans.
What is my wish list for my first home? – This will be an easy question to answer. After all, you have been thinking about getting your house for months now and you know exactly what you want in a house. Hold on for a moment. As a first time home buyer, you need check your high expectations at the door. In the current market, there are limited options on available homes. If you wish list is too long, or too stringent, you need to sit down and redo it. One trick to try is to divide your list into “must haves” and “nice to haves”. The “must haves” will be the things you have to have in a house or you are not interested in buying it. The “nice to haves” are the characteristics that would be great to have in a house but you can live without them. Also remember, that most home owners will sell their first home within 10 years so if you don’t get your entire list of “must haves’ with your first house, you will get it when you upgrade later.
What areas I am interested in living? – One would seem this too would be an easy question to answer. However, it is not as straightforward as one would think. First, you have to know if you can even afford a house in the area where you wish to live. If not, you might need to settle for some areas adjacent to the prime location. With options being limited already in this tight seller’s market, you don’t want to restrict yourself too much by being stubborn on the location. You need to look also at what amenities you wish to have in the community. You might be surprised that the area you thought you wanted to live in does not have the amenities you thought it should. For example, what is the level of schools in the area. If they are subpar, is this really the area you want to designate as you first home’s location? Resale value should also be looked at carefully. Are there any future developments that might reduce the price of your home because it happens to be in that location? You will eventually sell your house, probably within 10 years, so resell should be on your mind as you look at locations. There are plenty of online reports available for you to help you further explore community characteristics. Your agent should have access to several.
When do I need to start looking for a house? – Most likely, you are renting your current residence. If so, you need to get together with your landlord to confirm when you need to move under the current lease agreement. Most landlords will require you to give notice that you are planning to move. The most common amount of time is 30 days before the lease term ends. You might also ask about a month-to-month lease if you can’t arrange to buy a house before the lease term is over. You do have certain rights as a renter when it comes to move out notices and deposits. Make sure you know your rights. Remember, you will need about six weeks from the time an offer is accepted by a seller to close on the property. Mortgage lenders are busy and most of them will require this much time to get your final approval on a mortgage. Based on the lease terms and the turnaround of your mortgage company, you should be able to determine when you will need to start searching for a house.
What do I need to know when looking at properties online? – House selling is like any other merchandise that is sold. Presentation matters. I have seen some fantastic photo jobs done by agents to make a run down house look like a million bucks. Although most agents will not go to this length, listing agents will make a point to put the best light forward online for buyers. Listings agents want buyers to see the house so they can put in an offer. Photos are one way to get them in the door. You can also learn a lot by reading the fine print of a listing. Be sure to check out the room size and number of rooms (if it is included in the listing). You can also look through several different characteristics of the house in the online listing like foundation type, exterior features, interior features etc. In other words, you don’t have to rely on the pictures entirely to understand the house. Find more tips here.
What do I need to do at showings? – Showings are your opportunity to check out the house. Different people take different amounts of time to look over a home. I have some that walk through a home in five minutes while others take an hour or longer. It really depends on your own preferences. Most agents will schedule hour long appointments so there is no need to feel rushed to look over the home. Please remember that you are in someone’s house so behave yourself accordingly. You don’t need to be looking through personal items in the house, or even use the bathroom. The sellers trust you to treat their property and materials with respect. There is no justification for doing anything uncouth while seeing a home.
Do I need to take off time from work to look at homes? – You need to flexible when it comes to scheduling showings. Remember, we are in a tight seller’s market so houses move very quickly with some of them going under contract the first day on the market. You need to speak to your boss about the possibility of you having to take some time off to go look at a house that seems perfect for you. You can’t wait until the weekend and hope that the house will still be there. You dont’ have to go crazy with paid time off, but you need to be ready to move on a house that seems to check off everything on your wish list.
How do I know when to make an offer on a home? – As a first time home buyer, you will come across a house that seems to fit the bill, but you are not sold that it is worth putting in the offer. Most buyers tell me in cases like this that the property just didn’t feel like home. I would advise you take a step back and look over your wish list again. If the home marks off a majority of the items, you should go ahead and put in the offer. In other words, it is best to leave your emotions at the door. On the other side of the coin, however, if the home does not feel right, it just doesn’t feel right and you should not make the offer Just be advised that you will be looking at a lot of homes if you approach it with this mentality.
Once I find a home to make an offer, what’s next? For that answer, go here to see other frequent questions to consider as a first time home buyer.
Note: Please be sure to keep up with other Frequent Questions to Consider as a First Time Home Buyer. We have a whole series that you can utilize to help you with your process. If you want to receive emails about the new ones as they become available, be sure to sign up below for our monthly newsletter.