Buying real estate for the first time can be a nerve wrecking experience. The main reason why first time home buyers are often so nervous is because everyone seems to have a different opinion on how to go about buying a home. The best thing to do whenever you’re in the market for a new home is to contact a reliable real estate agent. This person will charge you a commission but you can be assured that you’re getting expert advice and settling on a piece of property that will end up being a lucrative investment. That said below we look at a few tips which should help every home buyer find a good piece of property.
Check Comparable Homes in the Area
If you want to avoid end up paying more than you should then always check comparable homes in that same area. There are numerous websites which should help you get an idea of what the going price is for property around there. You can also ask real estate agents in that area as to what the average going price is. This will give you an idea of what you can expect and make an offer accordingly.
What can you afford?
You obviously cannot purchase a piece of real estate that is more expensive than what you can afford. If you’re taking out a mortgage then first find out how much you are eligible to get from the mortgage broker and then search for a property accordingly. If you intend on making a sizable down payment then find out how it will affect your monthly mortgage payments prior to deciding if the budget is right for you.
Determine your Total Monthly Cost will be
Any real estate you buy has expenses associated with it, this incudes housing that first time home buyers purchase. These costs include taxes, insurance, maintenance etc. In addition to mortgage payments. Take all of these into consideration prior to buying a home. In some cases these added expenses can almost double your mortgage expenses. In order to get an idea of what you’ll need to pay for insurance, choose one property in your desired area and then call up a local insurance agent to get an estimate. You are in no way obligated to buy the insurance but rather you’ll know exactly what you’ll end up paying if you do buy.
The Net Worth of your Home
You should also find how much you’re going to pay in the way of closing costs. You shouldn’t overlook the one time upfront cost of settling into your new home. Some of the most common closing costs include origination fees which is charged by the lender, taxes, settlement feeds, title fees, and there are numerous prepaid stuff like homeowners insurance or association fees. If you’ve used a real estate agent then their commission should also be taken into consideration.
How does a Home Fit into your Budget?
Take a very close look at your budget and figure out how a house will fit into it. Ideally, you do not want to spend over 28% of your net income on just housing costs. If you go past 30% then you run the risk of becoming bankrupt or struggle to make ends meet which is never a good situation to be in.
Always Look at the Big Picture
First time home buyers have a hard time figuring out what the big picture is. Even though buying a home is an excellent way to build some wealth over the years it is equally labor intensive and financially stressful to maintain your investment. When you are met with unexpected costs of roof repairs, plumbing issues and new appliances you do not have a landlord to take care of that for you, but these costs do add up and have the potential to financially drain you.
Speak to a Reputable Real Estate Agent
You may always want to speak to a reputed and registered real estate agent in the area you want to buy. Ask them about if prices are going to fall or rise or if it’s going to hit rock bottom any time soon. Real Estate agents like Ron Danieli have been advising clients for decades and so are the key to making the right decision.