It is not always easy to buy a home, even if you are a veteran at it and this is your fifth house. It is especially hard when you are a first time buyer, there are many hurdles to overcome and I want to share with you some tips and tricks that you can go about getting that dream house of yours.
So you’ve established yourself a family and are going out there to get that first house, the number one question many people ask is do you buy the first house you like? That really depends on your budget, how big you want the house to be, what the schools are like, and of course the biggest factor is location. Another factor you need to consider is the condition of the house. If you have the money, resources, and skills you could always get a house to flip. Having a contractor like Roofing USA on your side can help you make these renovations happen faster as well.
Keep it below 10…
Do your research first before calling an agent to show you around, the internet is your friend, use it. When you finally narrow down to the homes that you would like to see, I recommend you keep it below 10 houses. Maybe 5 houses just to make sure, be sure to eat some carbs before you head out. You’re wondering why can’t you just see 30 houses at once? and why the heck am I making you eat carbs? The reason being is that studies shows that when you eat carbs, your memory improves dramatically and keeping it under 10 houses a day would not overload your brain. You don’t want to visit a house and then forget about it the next day would you? especially if it was a really good house.
Do you even qualify?
This is from personal experience, I was so dead set on getting a house and started looking everywhere until I found this one house I liked. I was working with my agent and we started to negotiate the price back and forth with the other party. We finally agreed to a price and then when I went to the bank to ask for a mortgage, I found out that I was not qualified for the loan because my evil debt-ratios were so high. What’s the lesson? qualify for a mortgage first before doing anything else so you don’t waste anybody else’s time. Do your research first, I recommend using Emortgage Calculator to find out what rates are out there and where’s the best place to apply.
It can be stressful…
Nobody said that buying a house is like buying a video game, far from it. Always be prepared because it can be a very emotional experience and you really don’t want to mix your emotions with your decisions because it can get out of hand. For example, your agent might not communicate well with you or the seller is a very hard person to deal with. It can also be stressful waiting for an acceptance, you will have all these questions going through your head about what if the seller rejects? What if he/she counter offer with an amount you can’t afford? What if the seller decides to go with another offer instead?
The solution to dealing with this kind of stress is try not to think about it by engaging in an activity, play a video game, go to the gym. Most importantly, keep in mind that it’s the seller’s loss if you get rejected because you are not obligated to that house, you can ALWAYS get another house so don’t stress it.
This article was recently featured in the following Carnivals:
- Carnival of Financial Camaraderie
- Yakezie Carnival November 13, 2011
Some people have to see multiple houses before they find the right one. Before even starting the process, it’s important to know if you even qualify. Great points.
Great advice! Never thought about the carbs and keeping the number of homes down. Information overload will just waste your entire house hunting trip!
Of course, now I know why my parents always made me eat cereals before school when I was young
I used websites like redfin.com, franklymls to identify the home I wanted. I only used the agent to open the door. If you buy a home through redfin you can also expect to get a nice rebate at closing. Good tips Aaron
I’ll have to check that out, thanks YFS 😀
No problemo
A few extra notes, for any Canadian readers you have …
You can withdraw up to $25k from your RRSP for a down payment (without penalty or taxation) and then pay it back over 15 years.
You are also eligible for a pretty good credit from the CDN government, the first time home buyer credit. If Aaron approves, i’ll add the URL in a subsequent comment.
@Aaron – glad you use GASP. I’ve been promoting it for a long time. It works so well! Welcome to the Yakezie challenge – you’re getting close. Glad I checked out your site tonight.
Thanks SPF 😀 GASP is great but sometimes quite a few bots get through it somehow. there would be 20 spams in one day at once and then it stop
It can be tough not to get stressed when you are looking for your own home as there is a usually a lot of emotional involvement. Doing your homework is the best way to go, work out how much you can afford (with a couple of rate hikes factored in), be realistic and stick to your budget. While we all might like it to be, your first house is rarely your dream home, but if you are smart it can be great stepping stone.
Excellent points – especially about getting qualified first. No point spending the time looking for a house if you won’t qualify for that loan! (Unless of course you can pay cash for it. 😉 )
We took a very systematic approach when we were looking to buy a house. We got approved for a mortgage. Went to a broker and got the best rate and shopped around by looking at numerous homes before we bought one. We wanted to maximize our opportunities with good research and planning.
You made several good points. When I bought my house, I probably saw total of 30 houses in span of 4 months. It wasn’t too bad but toward the end, I was getting tired of seeing the houses. However, I recommend seeing as many houses as possible because when you run into the house you like, then it will stand out pretty quickly.
Getting pre-qualified is so important as it saves you from wasting time looking for homes that you can no afford. Hiring a good real estate agent is also very important so make sure you interview several.
Stressful… yes it can be. In fact, I decided to hire a real estate agent that prescreened the houses… so I didn’t end up going to 10 houses with only 1 being close to what I was looking for (that happened once adding to the stress).
I totally agree on the carbs. You’re BEAT at the end (just went through this three years ago and I’m still tired and hungry). Another tip: bring a camera with you and take tons of shots of every house. My father in law is great at real estate and looked through the pics with us, noticing many things I hadn’t seen, like potential water damage and opportunities to increase the value of the property with little money.