Buying a 1st home is one of the largest and most important decisions a person can make in his or her life. Often, friends and family are more than willing to give you their “secrets” to buying your first home, but be careful. While they may have good intentions, each has only bought one first-time home and how do you know they had a good experience? Here are some important guidelines we’ve consolidated from successful purchasers for finding and buying your 1st home in Richmond, VA.
How Much Can You Afford?
Before you begin looking at homes, calling realtors, and visiting open houses, you need to understand how much you can afford to spend on a new home. We know it is tempting to start looking at homes and getting excited about finding the home of your dreams, however, you should start by looking at your finances. You don’t want to make the mistake of looking around and possibly falling in love with a home that you cannot afford. It’s not uncommon for home buyers to get excited and emotionally attached to a home when they began looking at homes for the first time. If necessary, you may want to consult with a financial planner for guidance on how much you should be saving for your first home and how much you can afford monthly. In addition, you can reach out to an experienced mortgage lender to determine the loan amount for which you can qualify.
Check Comparable Sales
After you understand your prices range, you should check the comparable sales in the area that you want to live. As a 1st time Home Buyer, you should check to see how much homes have sold for in the last 12 months in your designated area. By checking the comparable sales, you can determine the type and size of home you can buy. This will also help when negotiating once you do find a home that you are interested in buying. A realtor will be able to help you with determining an offer price, but you should make sure you are knowledgeable about the area and comparable sales. To help educate yourself about your areas of interest, you can used these free websites to see homes that have sold and homes that are for sale:
These sites can also provide additional information about your desired neighborhoods – schools, amenities, and other important information on each house listed.
Finding Mortgage Financing
In today’s real estate market, it is important to find mortgage lenders who can finance your home purchase. Often, negotiated home purchases fall apart due to problems associated with getting the property financed. The best way to avoid this problem is to get pre-approved for a mortgage before seriously looking for a home to buy. You should start by talking to 3 or 4 different types of mortgage lenders (e.g., national banks, mortgage lenders, regional banks, and credit unions). After talking with each lender, you can then compare the terms of the loan – interest rate, payment amount, payback period). Some lenders may charge for pre-approvals, so make sure you ask and confirm up front that they do not charge any type of pre-approval fees.
Once the banks have verified your credit history, income, and assets, they will provide you a pre-approval letter. These letters are typically good for 60 to 90 days. If you are not able to find a home within that time frame, it is usually not a problem. The lender can reissue the pre-approval letter.
Get the Home Inspected by a Professional
You should make sure that you make your offer for any home contingent on getting the home inspected by a professional home inspector. By getting the home inspection, you can avoid thousands of dollars of repairs and unexpected problems. To find an experience home inspector, you can ask for referrals. If you are working with a realtor, he or she should be able to recommend several qualified home inspectors. Once you have their names, make sure you call each one and ask specifically what they will do and how much they will charge.
Find an Experienced Real Estate Agent
In any real estate market, there are many realtors to choose from and who will be anxious to help you find a home. However, you want to pick an experienced agent that that is really willing to work hard to get you the best deal possible. Ask potential realtors to show you their sales history and current listings. Ask him or her to provided references from past clients that you can contact. Also, ask if they will represent you as a buyer’s agent, which means they will be working for you and not the seller of the home.
If you follow these guidelines from RVA Home Buyers, you should be well on your way to buying your first home and making sure that you will be happy with the purchase afterwards.