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Top 3 First Time Homebuyer Tips
As a first time homebuyer, there are a lot of things you need to be aware of. This makes you vulnerable when you face situations you are not ready for. In addition, there are certain things you should keep in mind from the very beginning. Here are the first 3 (of many) things you should consider before buying a home, our top 3 tips for first time home buyers:
Budget:
Never go beyond your limits. This doesn’t mean buy a home based on your savings, but you should have a clear idea of what financial burden you can afford for a home. People oftentimes get in over their head when buying a home for the first time if they buy a home that is beyond their budget. Therefore, it is critical for you to set a reasonable budget for buying a house.
Then you start searching for a home that fits that budget. Don’t even look at a home that is not within your limits. Once you have finalized a budget, decide if the house you’re considering will cost you additional money for renovation or repairs. If the answer is yes, then it is better to look for another property.
Employ A Mortgage Broker:
An expert in the mortgage business can be worth his or her weight in gold for first time homebuyers, which is why you should employ the services of such an expert. A mortgage broker will analyze your finances and then will counsel you regarding buying a new house.
By following his or her advice, you avoid making silly mistakes. A mortgage broker will also help you manage funds for buying the property.
This tip also applies to anyone buying a home, not just first time homebuyers.
Make a Wise Decision:
First time homebuyers often times neglect all the advice and fall in love with a certain property, which becomes fatal for their financial well-being. Therefore, first time homebuyer tips, regardless of their source, should be properly analyzed and then you should make a wise decision. If you fail here, not even a mortgage expert will be able to save you from financial peril.
There are numerous other first time homebuyer tips that should be given careful consideration even by seasoned real estate investors. However, the aforementioned tips are among the more important. For more “Homebuying Tips” visit that category of our blog..
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Overcoming Homebuyer Turnoffs
Anyone selling their home wants to make their home as appealing as possible to prospective buyers, whether that means sprucing up the exterior, clearing away clutter, or fixing up the interior.
What if your home has a flaw that is a turnoff to a large number of buyers? What can you do?
Exterior:
Believe it or not, most home buyers want an ordinary backyard with a green grass lawn. That’s especially true for buyers who have young children. Those who don’t see that lawn in the backyard have a hard time understanding how to remove whatever’s there or envisioning other possibilities for the use of that space.
Recreational facilities are the good examples of exteriors that could hurt your curb appeal. Examples include a basketball court, tennis court, batting cage or high jump pit. Anything like that could prove problematic.
Another potential turnoff is a swimming pool, especially in a cold climate. Having a pool doesn’t universally appeal to everyone.
Alternative landscaping — such as a profusion of plants, an elaborate flower garden, a cactus, multiple water fountains or a pond — also can be a turnoff to buyers.
People sometimes go too far with the gardening and flowers. Buyers don’t want to have to maintain exotic gardens.
Another tricky item – a children’s tree house or play house. These items can raise liability and insurance questions with potential homebuyers.
Interior:
Most homebuyers want an easy-flowing floor plan that includes proportional numbers and sizes of bedrooms, bathrooms, kitchens, dining areas and living spaces. Homes that don’t conform to those expectations can be difficult to sell.
Things known in the industry as “functional obsolescence” means that some aspect of the home doesn’t meet most buyers’ needs. Things like:
- An awkward addition that disrupts the floor plan or blocks off a stairway
- Two bedrooms that have been combined into one room
- A bedroom that’s been turned into a large walk-in closet
- A massive bathtub that takes up most of a bathroom’s floor space
- Outdated wallpaper, which is almost always very difficult to remove
- Exterior window security bars in areas where crime isn’t a major concern
- A converted garage, which raises concerns in buyers’ minds about building permits, quality of construction, loss of storage space and limited vehicle parking.
Solutions:
The ideal solution for any of these issues is to remove the problem. If that’s cost-prohibitive, as is often the case, other recommendations include:
- Giving prospective buyers contractors’ estimates of the cost to remedy the defect themselves after the sale closes.
- Use home staging to show the defect in its best possible light
- Post pictures on a storyboard to show buyers other ways a tricky space could be used
- Adjust your asking price to reflect the undesirable element
- Be extremely patient
Don’t give up hope. Just realize that your home might sit on the market longer because you’re waiting for that perfect buyer.
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Buying a Home? 3 Contract Contingencies You MUST Have
If you’re buying a home (or condo, townhouse, etc) there are three important contingencies your sales contract MUST have. A contingency simply means that if the matter is not resolved to your satisfaction, you have the right to cancel or terminate the sales contract and get a refund of any earnest money deposit you made when you submitted the offer to purchase.
The 3 MUST HAVE Contingencies are:
1 – Contingent on Financing. This is pretty obvious. If you cannot get a mortgage loan, you want to have the contract declared null and void and get your deposit back.
2 – Contingent on Appraisal. Again, pretty obvious, but you want to make sure the offer is contingent on the property being appraised at a minimum for the contract price. If your appraisal comes in lower than the purchase price (as is now very common around the country) your lender will only lend you 80 percent of the appraised value (if you are doing a conventional 80/20 loan, 20 percent down, financing the other 80 percent), which means you could have to come up with extra money at closing the lender won’t lend you because of the low appraisal.
3 – Contingent on a Satisfactory Home Inspection. You don’t want to buy a property only to find out that it needs a new roof, or the electricity is outdated, or the plumbing does not function properly. If your seller objects to such a contingency, run from the deal.
Don’t forget these contingencies when it comes time to make an offer on the home of your dreams.
