However, buying a home is a serious financial and life decision that shouldn’t be taken lightly.
For most people, buying a home is the biggest purchase they will make in their entire lives. That’s why you want to do your research and be prepared before signing that contract. This is more important now with how white-hot the real estate market is.
Here are five tips for homebuyers in this crazy market.
1. Don’t Blow All Your Money on the Down Payment
You often hear talk of people saving up for that big down payment. While 20% is the number often thrown around, banks are typically much more flexible. Depending on the type of loan, you can put 10%, 5%, or even nothing down! The important thing is that you don’t blow everything you have on the down payment. You have to take into account closing costs, any home repairs that need done, and more. Always have more money set aside for your big purchase.
2. Get a Home Inspection Done
While this seems like common sense, you’d be surprised how many people are foregoing home inspections. Just because others are doing it, doesn’t mean that you should, though. A home inspection is practically necessary before every purchase. It typically costs around $300, but you’ll get to know everything that’s wrong and right with your new home (everything from your sump pump to your air vents will get a thorough evaluation). Furthermore, many home inspectors offer warranties and other helpful coverages that can help you if anything goes seriously wrong.
3. Don’t Time the Market
This isn’t just a tip for homebuyers, but for anyone ready to invest. Timing the market is bound to end up in headache. No one can predict the market, especially now. The best time to buy is when you have the money ready and see a home you like. As long as you buy smart and take good care of your property, it will appreciate in value over time.
4. Keep Emotions Out of It
Buying a home is a serious decision. As such, it can come with lots of emotions. However, emotions lead to bad financial decisions. Don’t “fall in love” with a home right away, as it can lead you to forego an inspection or offer more than it’s worth. Be honest with yourself about each home you see. The more pragmatic you are, the less headaches you’ll have down the road.
5. Get Pre-Approved Before Looking
One of the first steps before you start seeing homes is to get that pre-approval. Visit with some banks and fill out applications to see how much you’d be approved for. That way, you’ll have a concrete idea of how much you can borrow for a home. Many sellers won’t accept your offer without a pre-approval, and most real estate agents will point you in that direction as well.
Bonus tip: Hire a real estate agent
There are so many documents to sign, red tape to cut, and hoops to jump through when buying a home. Having a real estate agent in your corner makes that entire process a breeze and ensures you don’t do anything incorrectly. An agent can also negotiate offers for you, so all you need to do is provide the paperwork and sign on the dotted line.