The most important thing prospective buyers can do is be financially prepared as early as possible. Before even starting to look for a home, save as much money as possible for a down payment, clean up your credit report and get pre-approved for a loan. An upfront pre-approval letter give the seller confidence that the buyer can close the loan and obtain the necessary funds. Buying a home takes patience and preparation and if you’re a first-time buyer, make sure to consider these four things:
1. A Down Payment is Never a Bad Investment
Even if you qualify for a loan that doesn’t require any money down, you need to make the investment because it minimizes your risk and starts you off with equity, in case the market downturns. Forbes suggests the gold standard for buying a home is to put 20 percent down. If you’re competing against buyers for a house, an offer with a down payment will look stronger to the seller and you’ll have more leverage during negotiations.
2. School Districts Zoning is Important
Even if you don’t already have kids, it really pays to check out the surrounding school districts in the area you want to buy a home. If the property falls into a well-sought after school district, it raises the property value, making resale more profitable. If you plan on having children, you’ll want to evaluate the schools they’ll be zoned for. If good public schools are outside of your designated zoning, you can sometimes get special permission. If you’re looking into private schools, you’ll want to make sure the commute is doable
3. Consider Building Plans Surrounding the Property
There’s nothing like buying a brand new home with open property surrounding it only to find out a shopping complex is scheduled to go up in the next few years. Noisy construction, detours and a decrease in property value are all things to consider. Cities often make plans for the future in advance, so inquire about future plans for your property or neighborhood to avoid surprises after you move in.
4. Dig Deeper During Inspection
First-time buyers who are looking to cut costs by not paying an inspector to flag defects of the property are risking thousands of dollars in damage down the road. It takes a trained eye to be able to see the problems that can exist in a home and buyers should tag along and ask questions. In addition to an inspection, buyers should also do their own inspection and research as there are conditions specific to certain areas or things inspectors can miss.
Property taxes, homeowner’s insurance, HOA fees and other monthly fees will all require your attention once you’ve committed to buying home. Make sure you’re financially and personally ready for such a large commitment and know exactly what you’re getting yourself into.