Buying a home is likely to be one of the largest purchases you’ll ever make. If you’re a first time buyer, taking your first step into the world of real estate can seem intimidating. Finding a home, submitting an offer, negotiating terms, and closing – each stage of the homebuying process can seem overwhelming, especially if you haven’t been through it before.
While buying your first home can feel like a real estate crash course, it’s totally achievable. It just takes some research and a lot of patience. The team at Palmetto Realty helps first time buyers land new homes every day, and we compiled this guide to help you buy yours.
First Time Buyer Checklist
Before you can begin shopping for a home, there are a few things you need to do first. Here is a quick checklist to help you prepare:
✅ Choose The Right Agent
You don’t have to navigate real estate transactions alone. Your agent will guide you through every step of the process and help you avoid costly pitfalls and mistakes along the way. However, the experience of your real estate agent can make or break your homebuying experience. Make sure to choose an agent that knows the area and has extensive experience representing both buyers and sellers.
✅ Get Pre-Approved
A mortgage pre-approval letter is an important first step, as it’s difficult to shop for homes without one. A mortgage pre-approval is a tentative commitment from a lender to finance your home purchase. You’ll fill out a form and provide historical paystubs, W2 forms, and tax returns, and then your lender will issue a pre-approval up to a certain amount. Keep in mind, your “pre-approved” amount isn’t necessarily what you should spend — it’s just what you’re authorized to spend. You’ll need to attach your pre-approval letter to any offers you submit.
✅ Set A Budget
Buying a home involves multiple costs. In addition to your monthly mortgage payment (which includes property taxes and homeowners insurance premiums), you’ll also have closing costs and pre-paid expenses. You’ll also want to set aside some funds for upgrades or emergency repairs. Work with your lender to fill-out a cost worksheet, which can help to estimate closing costs and monthly payments for various price points. This will provide some clarity on what you can afford.
✅ Define Your Criteria
In order to make your home shopping journey more productive, we always recommend making a list of your must-haves and nice-to-haves. Whether it’s location, size, budget, bathrooms, an attached garage, or other amenities, first time buyers often need to make a few sacrifices. By narrowing down the nonnegotiable, you can refine your home search and avoid wasting time on properties that miss the mark.
✅ Avoid Major Financial Changes
It’s important to maintain a consistent financial profile during the home shopping process, and especially after your mortgage application is submitted. This means you should avoid moving large sums of money between accounts, making major purchases, or taking out a loan. Major changes can disrupt your mortgage application or cause your lender to decline your mortgage altogether.
✅ Understand The Components Of An Offer
The amount you’re willing to pay for a home is the most important part of an offer, but it’s not the only consideration. You’ll also need to include inspection contingencies, an earnest money deposit (made immediately upon acceptance of your offer), and your closing date. Each of these components acts as a lever that can sweeten or detract from the quality of your offer. Your agent will work with you to craft the most effective offer.
✅ Schedule Your Inspections
You should always include a general home inspection contingency in your offer, and you should schedule your inspection within a week or so of offer acceptance. Your home inspector will examine your home for potential problems you may have missed during your initial home tour. Your home inspector will return a report detailing issues big and small. However, your inspector won’t catch everything. For example, they won’t move furniture or remove flooring, and they won’t climb on the roof. Once you receive a home inspection report, you’re entitled to go back to you buyer to negotiate repairs.
Buying a home doesn’t have to be complicated. If you’re a first time buyer looking for a Central Florida home, trust Palmetto Realty to guide you every step of the way. Call us at 386-200-1860 today.