1. Have a list of wants versus needs: Identify the features that are absolutely necessary and those that are nice to have will enable laser focus as you begin your home search. Write down the non-negotiable features your new home needs — the more specific, the better. If a home doesn’t have everything on the list, skip seeing it to avoid compromising. When visiting a showhouse, take notes and photos of the property so you can review them later when making a decision on which house has what you need and ultimately, is right for you.
2. Determine your buying power: Getting to understand how much you can afford can give you an upper hand when it comes to buying a new home. Our agents calculate the home affordability power, we help you estimate approximately how much of a monthly mortgage payment you can afford.
3. Optimize expenses and save more: Cut down unnecessary spending. Find ways to save extra cash like skipping the extra coffee meeting and saving that money in a dedicated account so you can watch your progress. If you struggle to save, automating the process can help. You can have your employer deposit some of your paycheck into a savings account or have your bank automatically deposit money into your savings account.
4. Interview several real estate agents: It’s always good to interact with several real estate agents before deciding who you’ll work with on your home-buying journey. Find out how long the agent has worked in the real estate industry. Ask if the agent works alone or with a team, and what their schedule is like over the coming months as you potentially work together.
5. Maintain your negotiating position: Remember that what you say in ear-shot of the seller or listing agent can have a significant impact on how they receive your offer. While the home search can be a very long process, keeping your composure is imperative as an over-enthusiastic potential buyer can wind up overpaying. On the flip side, harsh criticism of the home can come across offensively.
6. Make an informed offer: Discuss the following aspects of your offer with your agent so that you have a complete understanding of the financial implications before you sign a contract:
- Market price: Your agent can help you determine an offer price based on your budget, market dynamics, and comparable homes in the area.
- Money deposit: Placing a portion of the purchase price in an escrow account can demonstrate to the seller that you are serious. Just make sure to discuss the scenarios that could cause you to lose this deposit.
- Contingencies: These are provisions that can allow you to get out of your contract without losing your deposit under certain circumstances, such as passing a home inspection or appraisal, or securing a loan. With your agent, review how these provisions can protect you as the buyer and what impact they can have on a sale.
7. Assess the home with an appraisal: if you’ve applied for a mortgage, your home-to-be still has to undergo a valuation. A valuer will estimate the home’s value based on home condition, location, square footage, and renovations.
8. Have a home inspector: Your home inspector will help you know if your home-to-be has any issues.
The home inspection should vet several features and infrastructural components such as:
- Roofing and structural problems
- Mechanical and electrical troubles
- Plumbing concerns
- Overall home condition, functionality (i.e. windows, doors, vents, lights, fans), and safety (i.e. mold, hazards, faulty smoke detectors)
9. Wait until the sale is final: Stick to the deal until it’s final. The sale is not final until you sign all of the paperwork and get the keys.
Parting shot: Buying a home for the first time is can be challenging, yet a rewarding process. Preparing for that journey is one that not only requires a financial commitment, but also time invested in identifying what kind of home could be the best fit for you and selecting the right real estate professional to guide you along the way. With these tips in mind, you’ll be better prepared for what to expect.