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If you're getting ready to buy a home, you might be so excited to start shopping right away. However, it's essential to be aware of the mistakes that many people make when purchasing a home so you can avoid them.

1. Not Getting Pre-Approved First

You need to know how much you can afford. You might think it's not a problem to start looking at homes before you apply for a mortgage, but it's the best move. For one thing, you'll need to find out how much you're approved for a home loan. It demonstrates to sellers that you're a serious homebuyer who can acquire a mortgage, making it more likely that you'll finish the transaction. Some sellers even require you to have a pre-approval before showing their home to you.

2. Not Being Prepared for Repair and Remodeling Costs

There are a lot of costs that go along with being a first-time homebuyer, such as paying closing costs and for the down payment. However, if you aren't buying a brand new home, there's a possibility that you'll be paying for repairs. And even if no repairs are needed, you may want to remodel the home to update its design and suit your style. Also, be prepared for maintenance and repair costs that might pop up unexpectedly.

3. Not Choosing the Right Neighborhood

When shopping for a home, it's easy to get caught up in just looking at the home itself. While it's important for you to choose a suitable home for you and your family, there are other things that you should pay attention to. Make sure to research about the safety of the community, its culture, and surrounding areas. You'll probably want to think about things like the commute to and from your job. See how convenient it will be to visit your favorite stores and restaurants if you move into the neighborhood. There is a lot of information online that can help you pick a safe place for you and your family to live. It would be great to visit a few different neighborhoods to find the one that feels most like home.

4. Making an Offer Too Fast

Don't rush; work out your budget first. Once you find a home that you really like, you possibly have the urge to make an offer right away. But you shouldn't be. See to it that you have a home inspection done first. Sleep on it and get back to the house. Explore every corner and find out if it's suitable for you and your family in the long term.

5. Not Working With a Real Estate Agent

We all know that real estate agents provide valuable services in helping people sell and buy their homes. Sometimes, we think it's not necessary for us to work with a real estate professional. It seems easy enough to check out home listings, contact sellers, visit the open house, make an offer, and close the deal.

However, working with a realtor has a lot of benefits for a smooth sailing home buying journey. The realtor can show you listings that you might not have seen yourself. They can talk to you about your home needs, budget and show you homes that might be suitable for your family. They can walk you through buying a home, answer all your real estate questions, and assist you every step of the way.

If you're thinking of buying a home without a real estate agent's help because you're concerned about cost, you should know that working with an agent actually saves you money. Typically, the person who is doing the home purchasing does not have to pay the agent. Instead, the agent should be paid by the seller. Plus, a real estate agent can help you negotiate a reasonable offer on the home you want to buy and get a better deal.

Buying a home is a significant move to make in your life, so it's important to do it in the right way. To help you avoid making the mistakes mentioned above, get in touch with us.

 

Are you ready to buy a house?

Whether it’s an investment property, a place to move and build a family, or a space to grow old in, buying a home for the first time is a big step. It’s both a major financial and emotional decision.

A house is likely the most expensive purchase of your life, so it can be a bit overwhelming. It is totally understandable. To help you feel as prepared as possible and eliminate a lot of the stress, we’ve come up with these tips that should guide you through the home-buying process.

1. Check your financial health (savings and spending)

Do you have savings? Calculate your monthly expenses and debt-to-income (DTI) ratio, which should be at a maximum of 43%. It is essential to know where you stand in your finances to strengthen your credit score – this will determine if you qualify for a mortgage. Consider having an emergency fund for three to six months' worth of expenses. When you buy a home, there will be a down payment and closing costs.

2. Save for a down payment

Save enough money for a 20% down payment (or more). Your down payment will depend on the type of mortgage you choose and the lender’s terms. Some lenders allow as low as a 3% down payment for first-time homebuyers with excellent credit scores. Also, keep in mind that as a homeowner you will be responsible for all the maintenance and upkeep costs.

3. Make a list of your home must-haves and nice-to-haves

What does your dream house look like? Write down specific features and amenities that you need for your ideal home. You can also include the location, neighborhood, and size of the house and lot. You can make a separate list of the home features that are less important, that you can do without upon purchase. This is your first home; you deserve a house that grants most (if not all) of your wishes but be realistic.

4. Understand your home loan options

Don’t worry about not being able to pay cash for a home because there are a variety of mortgages with varying down payment and eligibility requirements:

By the way, you also have options when it comes to how long you are going to pay a home loan, anywhere from 15- to 30-years.

5. Get a mortgage pre-approval

A mortgage pre-approval determines how much house you can afford. Lenders will take into consideration your financial situation, including monthly income, DTI, and credit score. They will then provide you a statement that you are qualified to take a loan and how much a lender will give you to buy your first home. With a mortgage pre-approval, your home financing is already secured, and it shows the seller that you’re a serious buyer.

8. Attend open houses and home buying assistance programs

Your mortgage pre-approval will give you an idea of how much you can spend for your first home, which will help you narrow down your house requirements. Attend several open houses in the neighborhoods you want to live in to give you the chance to learn more about the area, its facilities, and community culture. Take advantage of home buying assistance programs from local government and realtors.

6. Submit a competitive offer

First of all, hire a trained professional to do an inspection of the property you’re interested in, so you’ll know the condition of your potential new home. This way, you can negotiate your offer with the seller, such as paying for the repairs. You can also ask them to lower the price to cover the cost of repairs. There are instances that the seller will pay some of the closing costs if the offer is right.

7. Work with a real estate agent

An excellent real estate agent knows the ins and outs of the market, finds you homes that match your criteria, and guides you through the entire process. Communicate with your agent regularly. Your home-buying journey will be a lot easier when you’re working with a real estate professional.

 

Always remember...

 

9. Stick to your budget (factor in the closing costs)

Don’t go over budget. As a first-time homebuyer, it is natural to get excited shopping for a perfect house that ticks everything in your checklist, forgetting what you can truly afford. Have enough money for repairs and renovations.

Remember to consider closing costs in your budget. These fees pay for important steps in the home-buying process, including:

10. Save Physical Copies of Your Paperwork

Keep the physical copy of your mortgage statements, deed, Closing Disclosure, vendor and supplier receipts, property insurance policy, and other important real estate records. Compile them all together for easier access and lock them in a fireproof cabinet, if possible.

Now back to the first question, are you ready to buy a house? Tap a highly rated real estate agent nearest you; contact us today!

 

Rose Group, with Keller Williams Realty, is comprised of licensed REALTORS® and a dynamic support staff. We’ve focused on providing trusted, expert representation to real estate buyers and sellers in Silicon Valley since 2004—and now we’re in San Diego!
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16780-A Lark Ave,
Los Gatos, CA 95032
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