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Calling all millennials! Ready to get off the fence and buy that first home?
A few questions to have answered before you officially take the plunge into the world of ownership:
How much home can I afford?
First time buyers, in particular, often think that if they’re able to make the down payment (a challenge in and of itself), and the monthly mortgage payments, they’re good to go. Unfortunately, there’s much more to it. To get a fuller picture of the cost of home ownership, consider using a resource like RealEstate.com, which allows buyers to search for homes in a completely new way – by “All-In-Monthly Price” - for every home, breaking out estimated expenses that might roll up into a monthly payment, including principal and interest, property taxes, homeowner's insurance, HOA fees and utilities, and closing costs.
Am I buying a home for the right reasons?
Many first-time buyers jump into the game with the expectation they’re going to turn a healthy profit when they sell 5, 6 years down the road. That’s the wrong mentality and you shouldn’t plan on this transaction being a money-maker. Sure, it’s nice to get home equity for money you’d be paying for rent, but you should be buying a house to live in, and enjoy. First time buyers, nearly twice as likely to exceed their budget as repeat buyers, should also be prepared for unseen upkeep costs, from mowing the lawn to emergency repairs.
Is this the right agent for me?
Buying a home for the first time is a process, and it’s an involved process at that, which opens the door to confusion. A good real estate agent - one with both strong market knowledge, and communication skills - will ease the process, guiding you through the paperwork and negotiations.
Am I prepared for the competition?
The market is strong right now - for sellers. Low inventory has led to an increase in real estate prices, and many first time home shoppers are struggling to find a home they love at a price they can afford. While new buyers have it easiest in the Southeast (especially Texas and Florida), it’s particularly challenging in the West Coast markets, according to recent analysis from Zillow. That’s not to say you shouldn’t buy in the California metro area, but you should be prepared for the competition because it’s stiff. This means having your finances in order, being pre-approved, avoiding contingencies, choosing the right number for your initial offer, acting quickly, and, of course, checking your emotions at the door/avoiding getting too attached to a home that might not end up being yours.
Vera Gibbons Vera Gibbons is the Founder and Editor of nonpoliticalnews.com, a free daily newsletter that covers the news and curates content in Consumer/Personal Finance; Health & Wellness; Fashion/Beauty; Fitness/Diet.