Buying your first home is exciting, but it can also be intimidating. There are a lot of steps involved in the process, including saving money for a down payment, home inspection and closing costs. First-time buyers may be eligible for state and federal programs that help with the down payment. First time home buyers need to know the difference between homeowners insurance vs home warranty to budget and know what you need ahead of time.
1. Location
The most common mistake first-time homebuyers make is focusing solely on the house itself and not thinking about where it’s located. Your home’s location impacts everything from your everyday lifestyle to the neighborhood’s future growth potential.
When you give your real estate agent a list of things you’re looking for in a home, you need to be specific about what kind of neighborhood you want. You should also be specific about what amenities are most important to you and your family, such as proximity to schools or parks.
Your home’s location is one of the most important factors when choosing where to live, because it can affect your daily life and the value of your investment over time. It’s essential to find a neighborhood that you will be happy in for years to come.
2. Size
Home size is a key factor for many buyers. It’s important to consider how large or small of a home you want, and whether it will meet your family’s needs now and in the future.
Home sizes vary, and many factors determine the square footage of a property, including its layout and amenities. For example, a home with a pool, hot tub, or home office may be considered larger than one without these features.
Knowing how to measure square footage of a home is helpful, especially if you are planning on selling your property or disputing an inaccurate tax assessment. Incorrectly measuring a home’s square footage can significantly affect its value and overall marketability. This can be costly to both buyers and sellers alike.
3. Amenities
The right amenities can increase your home’s value and make it more livable. Depending on your lifestyle, you may want to look for specific amenities like pools, patios, decks, and barbecue areas, or energy-efficient upgrades.
Especially in resale homes, it’s important to understand what amenities will be included with the property and what will not. Asking about a paper trail, or a list of receipts and documents that detail what’s been upgraded and when, is an essential step.
Newer homes are offering integrated technology that allows homeowners to control
their appliances, thermostats and sprinkler systems via smart devices or voice commands. This is an amenity that can pay off in the long run as it helps cut costs for future owners.
4. Price
Whether you’re shopping for your first home or looking to invest in another property, price is always a big consideration. Buyers want to ensure that the home they choose falls within their budget and can afford a mortgage payment they’re comfortable with.
That said, determining what you can afford is more complex than simply relying on online mortgage calculators. You’ll also need to factor in expenses like homeowners insurance, utility payments, and maintenance costs.
Additionally, buyers should consider closing costs, which typically cost between 2% and 7% of the purchase price. To reduce these fees, many buyers may be able to negotiate with sellers to pay for all or some of their closing costs.
5. Financing
Homebuyers may consider many options, including FHA loans, VA loans for veterans and members of the US military, and conventional mortgages. In addition, sellers often agree to pay closing costs for buyers, which can be a substantial help for first time homebuyers.
Buyers should prioritize early saving for both one-time expenses, like a down payment and moving costs, as well as recurring expenses, such as mortgage payments, property taxes and homeowner’s insurance. Having a good credit score also helps with affordability and may result in better interest rates.
If you’re a first-time buyer with debt or poor credit, it’s worth seeking out local and national first-time homebuyer programs that can help with down payments. It’s a good idea to get pre approval before shopping for homes so that your Realtor knows you’re serious about pursuing a purchase.