Buying a house can be a daunting task, even for someone who has
owned several homes. My husband and I recently purchased our first
home together, and it was hard to find good advice that we truly
found useful. We had to learn a lot on our own, but at least now we
feel comfortable and knowledgeable about the whole process. Here are
some helpful hints we picked up along the way:
1. Use your online resources.
Almost every state and local government has a website where you can
research real estate information. The data on home sales, taxes, and
neighborhoods is invaluable when you are shopping for a home. We
were able to find out the most recent sale prices in the
neighborhood we selected, and we didn't have to rely on a real
estate agent to get the data for us. Doing the research yourself
will make you more knowledgeable about the market, which is key to
making a good purchase.
2. Be realistic about how much you can spend.
Try to buy a home in a price range that allows you to put down 20%.
If you put down less than this, you will have to pay PMI (private
mortgage insurance) to protect the lender in case you default on the
loan. I know that 20% is a lot, but it's not unrealistic. You may
not be able to do it on your first home, but hopefully you can on
your second home. The profits from the sale of my condo enabled my
husband and me to have more than enough for the 20% down payment on
our home. But we didn't put it all down on the home – we
saved some of the profits for the unexpected expenses that come with
buying a home. We suggest that you do the same.
3. Shop for a home in the winter, preferably around the holidays.
Since most people just aren't interested in buying a home when
they are trying to deal with the holidays, you can pretty much be
one of the few buyers out there. We bought our home right before
Christmas, and it was definitely a buyers market. We had our pick of
homes and were able to underbid on the asking price, even though we
live in one of the hottest real estate markets in the country.
4. Use a smaller mortgage company that can offer personal service.
People tend to go with large, well-known mortgage companies, since
that's all they know. But the smaller, regional companies provide
excellent customer service, and can often give you better rates than
the big companies. Since they don't advertise and instead rely on
word-of-mouth, they have to be good in order to get your service. We
started off with a big-name company, but in the end, we went with a
regional company because they had better rates and better customer
service.
5. Always have a home inspection.
I think most people know this fact already, but it is really
important in areas with a hot real estate market. It can be easy to
get caught up in bidding wars, and to want to get a house at all
costs. Some friends of ours wanted a house so badly that not only
did they overbid, but they also waived the home inspection. They got
the house – and right along with it they got several thousand
dollars worth of damage that would have been found in an inspection.
As a final note, try to remember that buying a home doesn't have
to be scary. It's very exciting to own your own home, so think of
all the good things that will come once you have made it through the
home-buying process. If you follow the advice above, then you should
be well-equipped to make it through unscathed.
