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What First-Time Home Buyers Should Know

Making the decision to buy a home can be both exciting and frightening at the same time. There are many considerations to be accounted for before you even sign the papers. Since this is likely the biggest purchase you have ever made, it’s important to do it right to prepare for the future. Consider the type of home you want to buy, decide on a budget and stick with it, understand that the searching and buying process can be a long and arduous task, and be sure that buying is the best option before you go in. Here are some other good tips to get you started.

Decide on the Type of Home You Want

 First-Time Home BuyerThose who have a strict budget may consider buying a fixer-upper to save money. This can be a good option if the buyer has knowledge about home repairs or knows someone who can help them fix up the new place. It’s also important to understand that this type of home often has more issues than are apparent at first. Anyone who has ever watched HGTV  knows that more often than not, once repairs are started, hidden problems will be uncovered requiring more time and money than first expected. So be sure to add at least 10% to your budget to cover surprises.

Budget

Whether buying a home alone or with a significant other, it’s important to stick to the budget. Representatives from Republic State Mortgage Co recommend talking to a professional can help you see the amount you’ll qualify for and have it broken down into monthly payments to see what is affordable. The buyer should always be sure to account for other expenses that come with home-ownership such as insurance, cable/satellite services, electricity and other utilities. These can add up quickly, and must be taken into account when the budget is first set. Understand that buying may not be the best option for those that move around often as it often takes around five years to accrue some equity in the home.

Understand the Process

Buying a home can be a long process and you may look at many houses before you find one you really want in your price range. Budget constrictions, location, and a competitive market can all impede the process. When searching, it’s best to think of location as one of the top priorities in the case of many buyers. A home’s exterior can be altered as can the inside of the home, but you cannot change the location. Think and rethink before signing the papers to be sure you’re making the right decision about the home. Don’t let a competitive market push you into buying if you aren’t certain.

Most listings that are sold through a Real Estate agent requires the seller to pay the agents involved approximately 6% of the total sale price. If you buy a home that is “For Sale by Owner” (FSBO)  you might be able to save 3-6% on the price of the house. But that also means that you will not have the assistance of a trained agent in handling the complexities of the sale. If you decide to go this route it pays to do your homework first and read some good books on the subject like:

Buying a first home can be stressful but is also a great life achievement. Always research locations before deciding on a home and remember it’s important to understand that home ownership comes with the hassle and expenses that renting doesn’t. Most importantly, you shouldn’t buy something out of the price range, no matter how perfect the home may seem.

 

About Tim McMahon

Work by editor and author, Tim McMahon, has been featured in Bloomberg, CBS News, Wall Street Journal, Christian Science Monitor, Forbes, Washington Post, Drudge Report, The Atlantic, Business Insider, American Thinker, Lew Rockwell, Huffington Post, Rolling Stone, Oakland Press, Free Republic, Education World, Realty Trac, Reason, Coin News, and Council for Economic Education. Connect with Tim on Google+