The average American buying a home for the first time is 32 years old, has a median income of $72,000 and pays a median home price of $182,000, according to a recent report by the National Association of Realtors. Whether you fit the average profile or not, and whether you plan to buy in Charlotte, Boston, San Diego or anywhere else, there are a few things you should keep in mind when searching for your first home.
Before you even begin searching for the right home, you’ll want to get pre-approved for a mortgage loan. That will allow you to understand just how much you need to borrow so that you won’t waste time looking at homes that won’t work with your budget. It will also show agents and sellers that you’re a serious buyer, which means your offer is more likely to be accepted.
When applying, your credit will be one of the most important factors, determining whether you qualify as well as the interest rate and loan terms. That means you should check your credit before applying, looking for any discrepancies and disputing any errors that might be hurting your score. If you have a good chunk of outstanding debt, you may need to work on paying it off first.
Hire a Buyer’s Agent
Unless the home you’ve got your eye on is FSBO (for sale by owner), you won’t have to pay to hire a buyer’s agent, which makes it a no-brainer to do so. Your best interests will be represented, making sure you get the best deal possible. Buyers agents know how to handle the mountain of paperwork involved, make sure any deadlines are met and how to write a contract that presents you in the best possible light to sellers.
Pick the Right Neighborhoods
Before looking at specific homes, choose the neighborhoods that might make a good fit, driving through at various times of the day to check things like noise and traffic levels. Determine how long of a commute it would be to and from work, and how close amenities like grocery stores, restaurants, shops, and healthcare facilities are. Be sure to research nearby schools too, even if you don’t have kids or plan to as they affect home values. Checking crime statistics is important as well.
Look at Homes Only Within Your Budget
While you may be able to afford the total preapproved amount, that doesn’t account for your monthly expenses or unexpected repairs that can and often do arise. That means you should only look at homes that cost less than the amount you were approved for, leaving some wiggle room to prevent potential financial struggles in the future.
Your Bidding Strategy
In a seller’s market, you’ll need to be faster, smarter and closer to the original asking price when it comes time to putting in a competitive bid. If you’re hoping the seller will contribute to the closing costs or down payment, it’s even more important to be as close to the asking price as possible.