Buying a home is a complex process that involves finding the right property, qualifying for a loan, submitting an offer, and closing a deal. Because this process can be complicated, we reached out to the top real estate professionals to ask for their best tips for first-time buyers.
These are the top 21 tips for first time homebuyers from industry professionals:
Kiah Treece, Real Estate Writer, Fit Small Business
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2. Get a Pre-Qualification Letter
Edward Dietzschold, Broker, eXp Realty NWA
As you start your home search, it is very important that you start with finding a lender and getting a letter of pre-qualification. This tells you how much you can borrow to purchase a home, lets your seller know you are serious, and streamlines your buying process. You don’t want to lose the perfect house waiting on financing.
3. Be Prepared to Act Quickly
Cheryl Eidinger-Taylor, President & COO, ERA Key Realty Services
Today’s market is a seller’s market. Inventory is low and we are seeing bidding wars, where the seller ends up selling for a higher price than the initial listing price. Agents and homebuyers should be available as quickly as possible, so they can act quickly. Buyers should be prepared to lose a few (properties) before they purchase the home they truly want.
4. Hire a Good Attorney
Andrew Weinberger, CEO, PropertyClub
Depending on the type of property you’re buying, a good attorney could play a more important role than your agent as they will ensure you understand the contract and be on the lookout for potential unwanted surprises. In NYC, for example, real estate attorneys will look at a condo or co-op building’s financials and can help you avoid unexpected future bills/costs associated with building improvements/maintenance.
Evan Tarver, General Manager, Fit Small Business
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6. Get Specialty Inspections
Wally Conway, President, HomePro Inspections
Great due diligence includes the home inspection, termite inspection, and any specialty inspections that are appropriate to the home you are buying. Specialty inspections would include septic inspections, water testing, and air sampling — if you have concerns about the suitability of those areas of the home.
7. Consider Future Costs & Savings
Matthias Alleckna, Energy Industry Analyst, EnergyRates.ca
Don’t think only about the price at the time of purchase but also the long-term costs associated with the property. Make sure the house is as efficient as possible and that it’s not going to bring higher living costs in the years ahead. Prioritize energy-efficient houses, especially if they come with smart home features. Such elements will save you money in the longterm and make your monthly bills more affordable.
8. Don’t Fall in Love With a Home
Cornelius Charles, Co-Owner, Dream Home Property Solutions, LLC
Please don’t make the mistake of falling in love with a home before you actually own it. Until escrow is closed, there are a number of hurdles between a house being listed and you owning it. Even if your offer is accepted, something during the escrow process can still prevent you from closing on the house, such as your loan not going through.
9. Build Your Emergency Fund
Steve Martin, Wealth Planning Advisor, Oasis Wealth Planning Advisors, LLC
Home payments are mandatory payments that may be higher than when (you) were paying rent. Since the mortgage is a longer-term commitment, the first-time homebuyer should ensure they have adequate funds in place to pay for the mortgage for six months or even up to one year if they were to lose their source of income. An emergency fund should be available to meet needs without having to sell less critical assets or having to reduce retirement plan savings.
10. Factor Closing Costs Into Your Budget
Becki Danchik, Licensed Associate Real Estate Broker, Warburg Realty
Buyers will need to pay closing cost fees before their transaction is complete. These fees cover attorney costs; home inspections; applications; courier/delivery; wire fees; state, city, or county transfer taxes; lender fees; title policies; recording fees; home protection plans; and other miscellaneous fees.
11. Think About Your Long-Term Goals
Corey Fager, Realtor, SilverPointe Properties
How long will (you) live in this house? How are the schools? Can (you) renovate or add more square footage to the house if (you) need to? How close is it to work, family, friends, church, etc.? Ask yourself what is nonnegotiable and what can you live with.
12. Allow Yourself 3-6 Months to Find the Perfect Home
Nicholas Zolotas, Realtor, Herrick Lutts Realty Partners
Just because you don’t find the perfect house right away, don’t get depressed and think you are never going to find the right home. Home searching is a process and one that is best done slowly and with expectations that things may move slowly. Unfortunately, with the market being so competitive and having a lack of inventory, it’s more likely to take three to six months to find your home, rather than finding something in the first 30 days.
13. Be Willing to Make Compromises
Daniele Kurzweil, Licensed Real Estate Salesperson, The Friedman Team
Decide what is on your “must have” list and work backward. Want to be in a specific school district? You might have to sacrifice outdoor space. Need a separate man cave? You might have to add 20 minutes on to your commute. You won’t ever find everything you want in one perfect home, but knowing what is most important right now for you and your partner will help keep things in perspective.
14. Budget Carefully
Aleksandra Scepanovic, Co-Founder & Managing Director, Ideal Properties Group
Budget carefully and consciously for the days and months post-closing. Your property may need work, additional insurance, and other expenses. These will find a way to creep right in — and depleting your checking and savings account to address them may cost you dearly in many ways, including you possibly failing to meet your mortgage payments. Not a good way to start your days of home ownership.
15. Speak to Several Mortgage Lenders
Mary-Jean Gianquinto, Agent, Halstead
Banks and mortgage lenders are competitive and often offer a variety of lending packages. Just because you bank somewhere does not necessarily mean that’s the best rate, so consider other banks. Also, your real estate agent is a great resource for recommending lenders.
16. Prioritize the Location
Denise Supplee, Co-Founder/Director of Operations, Spark Rental
You can fix a house up. You can even add on to a home if you want. But, you cannot change its location. If you are single now and are considering children later, the school district will be important. Drive through neighborhoods at various times and days to ascertain safety, noise, and if it is a location you can see yourself in.
17. Make Visits When Residents Are Active
Elly Harris, Realtor, Distinctive Coast Properties
If you find a property you like, then visit on a Saturday afternoon to talk to neighbors and stroll the area when people are out and about — not a Monday morning when everyone is at work.
18. Write a Personalized Offer Letter
Beatrice de Jong, Consumer Trends Expert, Opendoor
Including a personal letter to the seller is your opportunity to introduce yourself to (them) and let them know you are the best person to buy their home. The best offer letters focus on the aspects of the home that you love, compliment the sellers on their tastes or the way they have maintained the home, and show them that you are committed to a smooth closing.
19. Offer A Leaseback
Andrew Helling, Real Estate Agent & Owner, REthority.com
Although every seller plans to move on a specific date, sometimes they run into hurdles that cause the closing to be delayed. By including a leaseback provision in your offer, you’re giving the seller peace of mind that they won’t need to stay in a hotel until their home is ready.
20. Do Not Bankrupt Yourself
Ralph DiBugnara, President of Home Qualified & VP at Cardinal Financial
No matter how perfect a home is, do not drain your resources trying to make it yours. There are almost always unforeseen costs to consider. Leaving yourself financially strapped means leaving yourself financially vulnerable. Do not buy a home that compromises your ability to afford a cushion. Most of all, no address is worth the stress associated with being cash poor.
21. Don’t Over Romanticize Walkability
Alison Bernstein, Real Estate Expert, Suburban Jungle
As many first-time buyers often come from more urban centers, they feel they need to buy a house as close to shops and restaurants as possible. The reality is that schooling, sporting events, and other activities often take place in out of town centers, limiting the importance of this proximity.
Bottom Line – Tips for First Time Homebuyers
The process of buying a home for the first time can be confusing and daunting for most people. However, keeping a sound budget in mind, anticipating costs, and prioritizing location over home features can help ensure a successful home purchase. For more guidance, consider all of the 21 pro tips for first-time homebuyers above.