Well positioned first-time home buyers

Purchasing a home can be an exciting and arguably an overwhelming experience for first-time home buyers. Although there’s a wealth of information available online, there are systematic steps prospective homeowners employ that result in the successful purchase of a home. Understandably, first-time home buyers will receive a substantial amount of advice from friends and family. However, despite well intentioned counseling, buying a home represents a life-changing decision and therefore careful considerations must be made. Yet, there are ways first-time home buyers can avoid the challenges others have experienced when purchasing their first home.

Prospective homeowners are best served in meeting with a mortgage lender before initiating a search for a new home. Meeting with a lender provides a basis from which a home buyer can make educated financial decisions. First-time home buyers are encouraged to interview several lenders before committing, as competitive programs across multiple lending institutions often exists. An approved home buyer is empowered to make informed decisions and respond with an offer when the right opportunity is presented.

Still, first-time home buyers should cautiously evaluate the impact paying a monthly mortgage will have on their budget. Home ownership can be expensive, not only in the beginning, but also in perpetuating expenses. Although a bank may have agreed to fund a loan at a certain amount, that doesn’t necessarily mean the home buyer is financially ready to encumber the full debt obligation. Introspection is required and home buyers should consider whether the numbers make sense. When in doubt, prospective homeowners should seek properties priced below the bank’s approved amount, as a manageable debt burden, based on both current and future financial considerations, will remain an ever-present reality of home ownership.

The home buying process can quickly exhaust a prospective homeowner’s financial resources. Down payments, earnest money deposits, inspections, appraisals, closing fees, and other unforeseen expenses often surprise those unfamiliar with purchasing a home. Having adequate funds set aside in a savings account in advance of searching for a home often proves beneficial.

When preparing to submit an offer, first-time home buyers should be open to negotiating if conditions warrant. Yet, home buyers are cautioned not to engage in a bidding war resulting in a price that eclipses a property’s value. Generally speaking, a home must appraise at a level equal to or higher than the agreed price. Banks often deny loans where a home’s price exceeds appraised value. Before actively bidding, home buyers should establish a not-to-exceed amount based on predetermined budgetary constraints and market considerations.

In addition to mortgage lenders, prospective homeowners are also encouraged to consult with other real estate industry professionals. The process of purchasing a home is ever-changing, with real estate agents, home inspectors, appraisers and escrow offers, each sharing important roles during various stages of the transaction. A professional’s expertise will assist a home buyer in effectively navigating the complexities at each stage. When interviewing representatives, a first-time home buyer should find a professional who complements their respective needs, openly asking questions and outlining expectations.

Throughout the home buying process, prospective homeowners must avoid becoming emotionally attached to a home, until such time as the paperwork is signed and the keys are in hand. Although sometimes hard, emotions may influence rational decision-making. The purchase of a home can be an exhilarating experience, but periods of anxiety should also be expected. First-time home buyers must maintain a level of objectivity and not overlook important facts just because they’ve become emotionally attached or set unrealistic expectations.

First-time home buyers often seek out homes at the top end of their budget; however, bigger doesn’t necessarily equate to better. Owning a home requires a significant amount of work. The larger the home, the more responsibilities are encumbered to maintain, heat and cool the property. First-time home buyers who purchase a larger home than what is needed, may eventually find doing so proves problematic.

Purchasing a home can be an exhausting process requiring a substantial amount of money and patience. When submitting an offer, prospective homeowners should openly ask questions about the property and educate themselves by reviewing the title report and speaking with would-be neighbors.

Given the proper considerations, home ownership can be a rewarding experience. Well positioned first-time home buyers educate themselves and only purchase when they’re ready to make the commitment. Home buyers should therefore take the time to establish a budget, seek professional guidance and focus on homes appropriately fitting their needs.

Sean and Aimee McDonald, Realtors with RE/MAX North Lake Tahoe, can be reached at 775-250-8335 or mcdonaldrealestateteam@gmail.com.