First Time Home Buyer Guide: Save Time & Money
Being a first time home buyer is one of the biggest decisions of your life—no pressure!
The good news is that doing your research in advance will pay off for you big time.
In this blog, we’ll go over a few ways that you can save time and money when going through the home purchase process.
How to Save Money When Buying a Home
1. Do the Math on Renting vs. Buying
The “American dream” of homeownership is definitely a seductive one.
Whether it’s a penthouse apartment downtown or a suburban house with a picket fence, everyone has their own vision of what the perfect home looks like.
Still, when buying a home it’s important to make sure that now is the right time, and here is the right place.
As a first time home buyer, some factors to consider include:
- How long you plan to stay in your current location
- What the real estate market looks like in your city or region
- The mortgage rates that you can obtain from a mortgage company
- Your current and projected future salaries
- Whether you plan to start a family
While a mortgage is usually cheaper than paying rent on a month-to-month basis, you also have to consider the extra expenses of homeownership: repairs and maintenance, homeowner’s insurance, property taxes, HOA fees, and closing costs.
2. Negotiate Smart
Negotiating the purchase price can be one of the most exciting and nerve-wracking parts of buying a home.
The right real estate agent can be an invaluable resource here, helping you make the best deal for your situation.
- Negotiate based on both the home’s sticker price and other expenses such as closing costs. You can also insert contingencies in the deal, such as an offer that depends on the sale of your current home.
- Speak with your broker about the current state of the market in your area. Their advice can be invaluable. If you’re in a buyer’s market, you have a lot more flexibility and room to maneuver than in a seller’s market.
The real estate landscape can vary between neighborhoods, and even from one street to another.
Ask your broker for recent sales in the same neighborhood that are comparable to the home you’re considering.
How to Save Time As A First Time Home Buyer
1. Focus on Needs vs. Wants
A great deal of house-hunting is about learning to compromise: focusing on the must-haves instead of things that are only nice to have.
While shiny new kitchens and hot tubs may make your jaw drop, they aren’t what really matters when you live in a home on a daily basis.
Because buyers will stay in a single-family home for an average of 13 years, you need to make sure that your home will have all the features you need.
You may want to think about the following questions:
- Bedrooms and bathrooms: Do you plan on having children (or having more)? Do you need a “mother-in-law suite” for guests or family members?
- Location: Do you need to be close to a particular location, such as your workplace? How are the school districts and crime rates? Do you want to be close to the action downtown, or have some peace and quiet in the countryside?
- Lifestyle: Do you have any hobbies, such as swimming or woodworking, that require a dedicated space? Do you need a garage or a basement? Does the home need to be handicap-accessible?
By focusing on what’s really important, you’ll find it much easier to cross homes off your list and narrow down your search parameters.
2. Deal with the Right Professionals
From lenders and real estate agents to attorneys and appraisers, you’ll deal with a wide range of professionals when buying a home.
Finding the right people to work with can save you hours or days of effort and make the process much less stressful.
- Before you approach real estate agents, speak with a mortgage lender and get a pre-approval. Agents will be more likely to take your search seriously with this document in hand.
- Working with a real estate attorney will give you a better deal when you make an offer. By inserting the right language into the contract, attorneys can help you back out of situations such as a failed home inspection.
Looking for more tips on how you can be smart when buying a home?
Check out “First Time Home Buyer Guide: Learn How to Save Time & Money,” our detailed reference for savvy first time home buyers.
We cover all the steps that you’ll need to know about, from finding the right place all the way to moving in.
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