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C21 Ditton Realty | First Time Buyer

If you are reading this article you are probably around the age 25-35 and are looking into purchasing your first home. This is one of the biggest decisions and one of the most expensive purchases you will make in your life.

When purchasing your first home there are a lot of unknowns and unexpected expenses so it is important to have a deep understanding of your personal finances and priorities when it comes to finding your dream property.

Ask yourself, “Am I financially stable?” or “Is now the right time to invest in a home?” Buying a home is not always going to be a positive investment. Looking at the market and loan rates can greatly affect a first time buyer and need to be taken into consideration. Here are the 9 steps that will help you along the way and lead to a positive return on your investment as a young buyer.

Step 1: Asking the hard questions

When buying a home you want to be sure you aren’t making any hasty decisions or just doing it because it’s the norm and what your friends are doing. It is about you and only you wanting to be a homeowner. After asking yourself the questions above, I am going to assume you said yes to each. Now this is where the fun begins.

Step 2: Consider your personal finances

Creating a price zone for yourself all depends on knowing what you can afford. Make sure to keep track of your credit score, the better the score the easier it will be to get approved for a loan. Determine how much you have saved for a down payment and how much you still need to save. A down payment is specific to each home and area of choice. Newer developments in up and coming cities are likely to require a smaller down payment because they are looking for young people to move in. So do some research in the area of which you are looking to purchase your future home.

Step 3: Research the local market

Long before you actually put an offer on a home, you should be monitoring the condition of the market in the area where you are intending to purchase property. Pay close attention to the homes in your price range by looking at the amount of time they are actually staying on the market, as well as if there are any big shifts in the asking price. Partnering with a local realtor can help you understand the key data points.

Step 4: Pre-approval process

Getting pre-approved for a big purchase like this is necessary. You might be able to guess what your house budget is based on your finances and credit score, but speaking with a lender will help you determine a specific number. In order to get pre-approved for a mortgage (AKA Loan), you will have to provide your lender with some financial information, including your debts and assets.

Step 5: Set your priorities

You might be looking for a lot of different things in your first home. But understanding which is most important to you will make the decision much easier for you. Be realistic with yourself and your budget as well as what you are willing to handle. Maybe you are wanting a home with multiple acres yet you may be unaware of how much time and maintenance it really takes to upkeep the property of that size. A property of greater size could lead to additional expenses like hiring a gardener or taking personal time from your other activities and busy life. Maybe you want to live in a smaller clean neighborhood. Researching the neighborhood and HOA is also important. My current HOA doesn’t let you park cars on the street past a certain time and even tickets you if your grass is brown. As a young adult these are things you will want to take into consideration when finding your perfect home.

Step 6: Finding an agent leads to finding a house

With your list of priorities and your pre-approval information in hand, speak to a real estate agent who can help you find a home. An agent’s job is to help you and is able to facilitate negotiations between buyers and sellers. They also have the ability to show you properties that fit your budget and meet your needs.

Step 7: Make an offer

With the help of your real estate agent, you will be able to determine a fair price to offer the owners of a home in which you are interested. As a buyer, try to avoid making a low-ball offer. You obviously want to get the most bank for your buck but more than often, owners who receive an offer that is obviously too low simply refuse it upfront and don’t engage in any further negotiations. Even if you disagree you should always defer to the opinion of your agent, as he or she is very educated on the housing market and the rules that apply to home offers.

Step 8: Handle inspections and secure a loan

Inspections are paid by the buyer. It’s important to understand what you’re taking on when buying a home, especially if it’s an older build. Inspections will let you know if there is any damage or warning signs about the home as well as if the homeowners were being honest about the condition of the home. Don’t be cheap! You want to be sure you are spending the money on the top inspection for your home. You do not want to be caught with a broken HVAC and busted pipes after a few months of living in your home especially when your budget might already be slim. After the inspection and the appraisal of the property, you can secure your loan with a bank or lender of your choice.

Step 9: Sealing the deal

Closing on a home is a very lengthy process and a time commitment. You will work with your lender and your real estate agent to ensure that all of the relevant paperwork for your purchase is in order. You will be able to move into your brand new home as soon as all of the paperwork has been completed and the seller of the house has been paid.

This is one of the biggest decisions you will make in your life as well as one of the most fulfilling. Happy house hunting!

CENTURY 21 Ditton Realty provides real estate services to the communities of Oakhurst, Coarsegold, North Fork, Bass Lake, Ahwahnee, Raymond, Fish Camp, Yosemite National Park, Mariposa, Cathey’s Valley, Midpines, Friant, Prather, Auberry, Shaver Lake, Fresno, Clovis, Madera and Chowchilla. Use our site to browse through thousands of commercial, residential and land listings throughout Central California.

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