Buying a property for the first time is usually a confusing, frustrating and hectic process. First-time home buyers need to be extremely cautious to make sure that they have everything that they need, that they are in control of the process and that they have considered every step in advance. First-time home buyers that are not ready can often end up getting themselves into a property that they don’t want or spending too much.
Get Your Finances in Order
The first thing a home buyer should do is collect all their financial information. A bank will need this later anyway but it is critical to collect it first for two reasons. The first reason is that it ensures that the buyer isn’t bogged down in chasing paper while they are trying to make an offer and close a deal. The second reason is that it gives the buyer a realistic and thorough idea of their expenses and where they stand financially. This can be absolutely critical in making an educated decision about what they can afford.
After the financial information has been collected it should be forwarded to a bank for a pre-qualification. A pre-qualification is better than a pre-approval because it means that the bank actually considered most of the information that they would use for a mortgage before calculating the amount that they believe they would approve for a mortgage loan. The pre-qualification will give the buyer an idea of what they can spend.
Don’t Keep Bidding
One of the most common mistakes a first-time home buyer makes is getting locked into a bidding war. It is easy to get emotionally attached to a property but a home buyer needs to fight these feelings to make sound financial decisions. If a home buyer feels that they may be getting emotionally involved they should take a minute to step back from the situation and think it through again.
Don’t Skip the Inspection
A property inspection is not a formality. Even if a home looks perfect on the outside there can be things such as mold or structural damage that cannot be seen by the untrained eye. No matter how eager a first-time home buyer is to get into their new property they should always do a detailed property inspection and listen to everything that the property inspector tells them about. Even seemingly small problems such as a slight leak can turn into larger problems like water damage if left unchecked.
Appraise the Property
Just like an inspection, a property appraisal is also necessary. While some mortgages allow the appraisals to be skipped it is still important for multiple reasons. The home buyer’s insurance policy is likely to ask for an appraisal later, and getting an appraisal back may let a home buyer know that the home is either much more or much less than they actually thought it was.
With a little caution and care a home buyer can easily find themselves in a home that they both love and can afford. Home buyers need to be skeptical and patient to avoid potential pitfalls and come out on top.