If you’re a first-time home buyer, you might not know exactly what to look for when considering a home. From the house itself to the financial terms of the purchase, there are a lot of new terms to learn.
When it comes to finding a home that suits you and your lifestyle, you should start by learning a few general tips that can help you avoid making costly mistakes as a first-time home buyer. Here’s what to look for when you start the search for your future home.
Find a Real Estate Agent Who Understands What You’re Looking For
Not all real estate agents offer the same services to their customers. Before you get too far into the home-buying process, find a real estate agent who takes the time to listen to your needs and preferences without rushing your decision.
You should also consider the background of the real estate agent when you’re picking someone to guide you through this process. How long have they been working in real estate? Do they have experience buying and selling homes in your area and/or at your price level?
If you’re still looking for an agent, ask your homeowner friends for recommendations.
Get Pre-Qualified So You Know What You Can Afford
Pre-qualification is a process lenders will lead you through to determine approximately how large of a mortgage you can afford. This process will take into account your financial information, including employment income, estimated down payment, credit score, and other factors to give you a reliable estimate for mortgage qualification.
When you go to put an offer on a house, pre-qualification will offer the seller assurances that you’ll be able to afford the terms of whatever agreement both sides reach.
Be Wary of Major Structural Issues, Such as Water Damage, Mold, and Foundation Cracks
Once you have an offer accepted, schedule a home inspection for a thorough examination of the home and its structural integrity. Before you reach this point, however, look out for basic red flags that could indicate significant structural issues—and high potential costs as a home buyer.
These include water damage on the ceiling, around windows, in bathrooms, and on the basement floor. Similarly, cracking in the home’s foundation can be indicative of settling and other foundation damage that could require expensive repairs.
Staining on walls and other surfaces from mold could require mold abatement services, which are expensive and may still be unable to fully address a mold problem once it has developed in the home.
Keep an Eye out for Affordable Upgrade Opportunities
Old carpeting and dated wallpaper can be a huge turn-off for prospective homebuyers, decreasing the market value for a home. But in many cases, updating these finishes is fairly affordable—and spotting these opportunities could help you score a deal on a home.
While other home-hunters may struggle to look past these unflattering finishes, you could find a high-value opportunity if you’re able to see the potential of a home after you’ve made some relatively low-cost cosmetic changes.
Make Sure the Home Can Support Your Long-Term Plans
You don’t have to commit to living in one place forever, but it makes financial sense to purchase a home that has room to grow with you as your life changes.
If you purchase a small home that will barely fit your current family, you’ll outgrow it quickly—and the faster you move out of your home, the less financial benefit you will receive from homeownership.
Experts recommend living in a purchased home for at least five years in order to gain the full financial benefits of homeownership. If you move out before then, you may not be saving enough on your mortgage expenses and equity growth to cover the closing costs you paid to buy your home. If you’re able to buy a home that can support you long-term, that foresight will pay off big in the years to come.
Purchasing a home is one of the biggest and most exciting financial decisions you’ll ever make! By knowing what to look for as a first-time home buyer, you can move through the process with confidence and peace of mind.