First time home buyer? Take a deep breath, relax and follow these steps.
The journey to homeownership can have it’s ups and downs, but the ride is oh so worth it. I remember being a first time home buyer, it was both exciting and nerve wrecking at the same time. So many questions running through my head, what type of home do I want or do I even need a Realtor? I soon found out that whether I was in the beginning stages of saving or even if I had a dream home in mind, there were a few key steps I needed to follow.
1. Get Pre Qualified
Of course if we all had it our way we would live in lavish mansions overlooking the ocean with infinity pools and all the amenities we could think of. I sure had my dream list! However, for a first time home buyer it’s important to put things into perspective and determine what you can first qualify for.
Start by booking an appointment with a loan officer at a bank of your choice to determine what loan amount you can qualify for. I know we all think to ourselves .. “I have a good job and I pay my bills on time”, but the truth is, there are so many factors that come in to play when getting pre-approved. Your annual income vs expenses, age, any outstanding loans and the list goes on. All of these factors play a role in determining what you qualify for.
(side note) Make sure have a copy of your mortgage pre approval letter from your bank handy. You will need this when you find a Realtor and it shows sellers you’re a serious buyer.
2. Expectations vs Reality
Now that you’ve determined what you qualify for, it’s time to narrow down that wish list to a few non negotiable items. The options are out there and it’s up to you to decide whether you want to purchase a home, build from the ground up, the size and the amenities you can and cannot live without.
So, before you start shopping around get familiar with your neighbourhoods and what’s available in the local market. Attend open houses and watch a few episodes of HGTV for ideas (some of my favs, Property Brothers and Chip & Joanna on Fixer Upper). This will give you a good sense of whether you want a condo or a house, open floor concept and even determine if you want to purchase a property that will give you a return on your investment, like an apartment or townhouse.
It’s almost impossible to find every single thing on your wish list without going way over budget, but once you narrow it down to what you can and can’t live without, it will help you find a happy medium.
3. Find the right Realtor for you!
This will probably be one of the biggest investments you make in your lifetime and selecting a Realtor is a crucial step in this process. You want this experience to be as smooth as possible, so finding a Realtor that is both knowledgable and reliable is key. Fifty four percent of buyers found their agent from a personal referral or they used an agent they’ve worked with before, according to the 2014 National Association of Realtors.
Start by talking to family members, friends and friends of friends who might live in the area of interest or have had interaction with local Realtors. You want a Realtor that you are comfortable with and makes you feel at ease. Someone that is trustworthy and has the ability to listen to your wants and needs and is able to execute.
In this case going with a Better Homes & Gardens Real Estate Realtor is your safest bet (shameless plug). We are knowledgable about our market, we put our clients needs first and we can guide you every step of the way.
Ps. Ask your Realtor for a contact list of recommended loan officers and real estate attorneys. This is another crucial step in this life changing process.
4. Shop for the best deal.
Now that you’ve found the right Realtor and started the process of looking for the perfect home, its time to find a lending establishment and legal attorney. Just because you’ve gotten pre approved from one bank does not mean you are locked in with them. Different banks offer competitive rates and also host mortgage campaigns throughout the year. As a first time home buyer this is important! You want to find a reliable bank that will guide you through the process and offer you the lowest interest rate, especially when you’re loan term will more than likely be between 20 to 30 years. The same goes for your legal attorney, ideally you want to go with a law firm that has experience in real estate transactions, conveyances and putting together buyer-seller agreements.
5. Home Sweet Home
As a first time home buyer you are practically at the home stretch! You’ve gotten all the pieces to the puzzle and now it’s finally time to put it together. You’re pre approved, narrowed down your wish list, found a reliable bank to offer you a competitive interest rate and of course your more than capable BHGRE Realtor has found the perfect dream home for you … and the rest is history.