If it’s your first time buying a house, there is a good chance you’re overwhelmed with everything that goes into purchasing real estate.
There are common steps to buying a house and you should familiarize yourself with them prior to jumping into a home search.
In addition, here are five things first time home buyers MUST consider BEFORE buying.
Location. Location. Location! By far the most important thing to consider as a first time home buyer is location. If you don’t know your locations well, then you are not ready to make a purchase. Consider renting for 3-6 months.
If there is one thing a buyer should never settle on, it’s location – you can change a lot of things about a home; location is one thing you cannot.
When I have an initial buyer consultation with a first time home buyer, or first time home buyers, they have specific criteria for the area they want to live in. Digging deeper, I ask questions on the location to make sure they understand why that is the area they want (this is because of what typically happens next).
After we start searching for homes in the specific location they gave me, if they don’t find anything immediately OR if they make an offer and don’t get the house, all of a sudden they want to buy a house OUTSIDE of the original location. Sometimes the new location they want to buy can be 20+ miles away from the original area.
If you are a first time home buyer you need to exhibit patience. If you don’t find anything right away, don’t start looking outside of your top location. Another important thing to note is that a common mistake first time home buyers make is finding the house before they choose a location.
During a buyer consultation I will ask, “What are you looking for in a home?” The response may come as a surprise to many. People will often respond to this question, which is about their future home, with this answer… “great schools.”
This showcases just how top of mind schools are on the priority list for many buyers. You can ask them an unrelated question and they will immediately fall back to schools as being a priority, which is entirely understandable.
Being a REALTOR®, it is easy for me to understand the most common priorities buyers have when purchasing real estate. Schools are often one of the top two priorities, and if it isn’t, it’s the third.
If you’re a first time home buyer you must take schools into consideration, even if you aren’t sending your kids to school just yet. Homes in good school districts appreciate faster, and the resale value is more likely to be maintained, making it an easy sale when you become a first time home seller.
Where you work should play a factor in where you buy a home. People do not want a long commute to work and it’s understandable since adding 20 minutes to your commute one way means 40 minutes per day, which means more than three hours a week, and 150+ hours commuting over the course of a year.
Additionally, it will also impact resale value so you’ll want to be sure you’re buying somewhere near a lot of economic opportunity.
These areas will be known by your local Real Estate Agent, so make sure you ask them the question: where are the largest sources of economic opportunity and employment in the area?
In the Raleigh, North Carolina real estate market, people love to buy homes in Cary, NC because it is close to the Research Triangle Park, Downtown Raleigh, Downtown Durham, the airport and Chapel Hill. It’s the middle point between them all. As a result, the town of Cary is appreciating at rates greater than three times that of other local cities because people don’t want long commutes to work.
Being a first time home buyer, one of the things you need to be careful of is making common financial mistakes. Don’t fall into the trap of buying a house that will overextend you financially; this is the number one reason for foreclosures.
If a mortgage lender tells you that you qualify for up to $375,000, it is not wise to go buy a home for $375,000. You are going to have a lot of other costs that come with homeownership that you may not know about. You also don’t want to max out your spending if you enjoy things like traveling, shopping, eating out, etc.
If it’s your first time buying a house you should buy a property that says “this is my first house” and not one that is going to cause you to overextend your budget.
As a first time home buyer, you should have a long-term plan for your investment. If you’re going to spend hundreds of thousands of dollars on a property, what is your plan for that investment?
Your purchase may be a starter home that turns into a rental income property, or maybe you plan to live in the house for the rest of your life. Either way, you need to have a plan prior to purchase.
Some clients I work with want to live in the home forever, and if that’s the case it’s less risky to buy something at the higher end of your price range, assuming you’re buying in a great location.
Your long-term plan can always change, so keep yourself flexible.
Ryan Fitzgerald is a Realtor® in Raleigh, North Carolina and the owner of Raleigh Realty. You can learn more about Ryan at RaleighRealtyHomes.com or by connecting with him on social media!
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