I’m looking to buy my first home. What should I look for?
If you’re thinking about buying your first home, congratulations! You are about to take one of the biggest financial steps of your life. Real estate is a great investment, but it’s also a big commitment — and it can be difficult to know exactly what you should be looking for in a property.
Take the time to do your homework and ask your Real Estate lawyer questions before signing anything.
It’s a good idea for first-time buyers to check out the resale housing market (a.k.a., houses that are already built), at least in part because you can more easily get a sense of what is available in your area and what the options are. But it’s also a good idea to build your own house, at least in part because you get more for your money and you can choose exactly what you want.
Having said that, here are some of the most important factors to consider when buying real estate:
1. Real Estate lawyer
Finding a Real Estate lawyer you trust is key to making sure your interests are protected throughout the process. A real estate lawyer can offer guidance on the legality of contracts and other documents, help with negotiations, help you avoid or resolve problems in a timely fashion, draw up agreements, give advice when transferring property, provide real estate law opinions and represent you in court.
2. Do your math
Purchasing a home is one of the biggest financial transactions you will undertake — and one of the most expensive. So, doing a little bit of basic planning can go a long way towards ensuring that buying a house doesn’t derail your overall financial goals. An important first step is to evaluate how much you can afford to spend on a home. If you don’t know how many houses you can afford, find out by using our online mortgage calculator.
3. Where will I get the money?
Ideally, your down payment should be between 5 and 10% of the purchase price of the property. That amount may seem big for first-time buyers — but it’s the best way to ensure you’ll be able to get a mortgage. If you can’t make a down payment that large, look at other properties in your price range and keep in mind that each percentage point above 10% will decrease the amount of stress on your monthly payments.
4. Get pre-approved for a mortgage
It’s a good idea to get pre-approved for a mortgage before you start shopping. That way, when you find the home of your dreams and sign an offer, the conditions will be clear: You have been approved for this amount and all that’s left is to settle on the price.
5. Get your credit in order
You’ll need a good credit history to get the best rate when you apply for a mortgage (and, quite often, certain financial perks like higher insurance coverage). So if your credit isn’t squeaky clean yet, it’s time to start cleaning it up.
6. Schedule home inspections
One of the benefits of buying resale housing is that you will not have to do any construction work on the house. That means that home inspections should be much less expensive than they would be if you were building a house from scratch.
7. Know when to negotiate, and when to walk away
You can get a great deal when you buy real estate, but be careful about being too aggressive in your negotiating. If the price is way out of line with market rates, consider walking away. And if you’re not sure what something in a contract means or how it will affect you, ask your real estate lawyer before signing anything!
8. Make an offer
After you’ve found a property that suits your needs, make an offer. Although the seller can decide whether or not to accept it, this is usually done through a real estate lawyer who will be on your side throughout the negotiations.
9. Get help from professionals along the way
Although you can purchase resale housing without a lawyer, having one can make the process easier and keep your interests protected throughout the contract. Similarly, you may want to ask a real estate agent or inspector for advice about things like financing and negotiating.
10. Know what’s included
When buying resale housing, remember that no matter how extensive your list of “must-haves” is, some things you never considered may come with the property! The listing description should clearly state which features are included — and make sure you double-check them again at the contract stage.
11. Look for illegal terms
Although it’s more common to see illegal terms in new home contracts, they can also crop up in resale housing agreements. For example, if a house is listed as being “rented,” there may be restrictions on who is allowed to live there — which could be a huge problem if you’re planning on buying it as a family home.
12. Close the deal!
At this point, your contract will be reviewed by the seller’s lawyer and either accepted or rejected. If it is accepted, congratulations — your new house is yours! Within 30 days of signing the contract, you’ll also have to arrange your financing and schedule the closing.