Buying a House: Where Do I Even Start?
If you have decided to get into the exciting world of home ownership, then you owe yourself a few moments of congratulations. If you make the right decisions, then you will soon catapult yourself into a world of wealth building and an increased quality of life.
However, getting that first house can seem like an overwhelming task. Here are some of the things that you should consider when you are taking on your first home buying process.
– First of all, make sure that your calculations for mortgage, insurance and maintenance of the home are precise.
You need to understand how much home you can truly afford. If you do business with a real estate agent, the only thing that they will really discuss with you is the monthly mortgage package; they have no obligation to discuss any of the other expenses with you. The monthly mortgage is only the beginning of owning a home. Once you purchase the house, you need furniture to go inside of the rooms! You must also remain in compliance with the law when it comes to insurance for that home. Another thing that people do not consider is that they will be responsible for all of the maintenance in the home as well. All of these factors must be considered in the monthly budget of making the home purchase.
Before the age of the Internet, all of these calculations would have needed to be made by an accountant or real estate agent. Today, you have free real estate calculators that will help you to aggregate all of these costs so that you can see the true expense of owning a home. From here, you will be able to determine the type of house that you can truly afford without a dip in your quality of life.
– Learn how to negotiate with real estate agents.
Now that you have precise calculations on your side, you do not have to go in blind when you do business with a real estate agent. You can look up the homes that interest you online and cross-reference them with the expense package that you have just calculated. You are really only using the real estate agent for access to the key so that you can see the inside of the property.
You should not let your real estate agent coerce you into any purchase that you are not interested in. You do not have to reveal any of the calculations that you have made in step one, but you should keep them in the back of your mind because your real estate agent will try to verbally minimize the costs that you will incur in order to get you into a bigger home. Keep in mind that your real estate agent is incentivized by the size of the commission as well as the sale itself.
– Once you have the calculations and the property in mind, you can start to negotiate the process.
The first thing that you should consider is the amount of money that you have for the down payment. In most states, you need to put down at least 20% of the total price of the home in order to avoid an extra insurance cost. As such, 20% of the total price is your minimum. Do not go below it. Try to make sure that the asking price of the house does not go above this figure.
You will also need to set aside a few thousand dollars in order to have the home that you have chosen inspected by a reputable, third-party agent. This person or agency will look for discrepancies in the home that cannot be seen by the naked eye such as bad plumbing, rodent infestations inside of the walls, or a dilapidated infrastructure. After you have a full assessment of the home, you will be able to negotiate with the current owner about who will fix these things. If the owner says that he will not fix them, you will be able to negotiate a lower price on the home if you still wish to purchase it.
– Make sure that you check out the neighborhood around your home as well.
Many people make the mistake of buying a home in a vacuum. You must also look at the quality of life that your neighborhood will afford you. Are the neighbors friendly? Do they keep to themselves or is there a community that you can become involved in? Are there a lot of kids in the neighborhood, or is the neighborhood for senior citizens? Do people keep their lawns mowed and seem to care about the property value of their neighbors? All of these questions need to be answered so that you can make an informed choice about the type of life that you want to live in your home.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com, a leading supplier of personal and business checks.