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7 tips for first-time home buyers

gracesmith's picture
gracesmith

Are you a first-time home buyer eager to get into the market? Here are steps to take to help you decide whether you're ready to take the plunge.

1. Check the selling prices of comparable homes in your area. Web sites such as Zillow and Homegain can give you a general idea of what you should expect to pay. You can also do a quick search of actual MLS listings in your area on a number of Web sites, including the site of the National Association of Realtors.

2. See what you can afford. Use Bankrate’s mortgage calculator to see what your payment would be. To get a sense of the maximum you should spend, use MSN Real Estate’s home affordability calculator (below).

3. Find out what your total monthly housing cost would be, including taxes and homeowners insurance. To get a feel for the maximum amount you should spend, including taxes and insurance, use MSN Real Estate's home affordability calculator. In some areas, what you'll pay for your taxes and insurance escrow can almost double your mortgage payment. According to the Insurance Information Institute, the average yearly premium can range from $477 in Utah to $1,372 for unlucky Texans.

To get an idea of what you'll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate. You won't be obligated to get the insurance, but you'll have a good idea of what you'll pay if you buy. For an idea of what you'll pay in taxes, Zillow publishes property-tax information for homes all over the country. Just remember that exemptions and the intricacies of local tax law (such as Florida's Save Our Homes value cap) can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.

4. Find out how much you'll likely pay in closing costs. The upfront cost of settling on your home shouldn't be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees. You can see what closing costs average in your state by looking at Bankrate.com's annual closing cost survey.

5. Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor.

6. Talk to reputable real-estate agents in your area about the real-estate climate. Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon?

7. Remember to look at the big picture. While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can drain your bank account.

So consider whether you're ready for the expense and effort of homeownership before pulling the trigger.

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JoeRomero's picture
JoeRomero

Great sharing! It’s really very helpful for the first time home buyer as it will help them in demystifying the process and get the most out of the purchase. While going through the post, I didn’t found anything that you missed to covered related topic.

joeanna anthony's picture
joeanna anthony

Thanks a lot for sharing those tips. I am going to copy it and save it so that when I buy a house, I shall definitely refer to  these tips.  For information on fencing, please check out http://californiafenceco.com/vinyl.htmlhttp://californiafenceco.com/wood.htmlhttp://californiafenceco.com/metal.htmlhttp://californiafenceco.com/chain.html 

roofrestorationquotes's picture
roofrestoration...

Very useful tips. All the important pointers for buying homes are here. Thanks for sharing :)

alinemknudsen's picture
alinemknudsen

gracesmith wrote:
Are you a first-time home buyer eager to get into the market? Here are steps to take to help you decide whether you're ready to take the plunge. 1. Check the selling prices of comparable homes in your area. Web sites such as Zillow and Homegain can give you a general idea of what you should expect to pay. You can also do a quick search of actual MLS listings in your area on a number of Web sites, including the site of the National Association of Realtors. 2. See what you can afford. Use Bankrate’s mortgage calculator to see what your payment would be. To get a sense of the maximum you should spend, use MSN Real Estate’s home affordability calculator (below). 3. Find out what your total monthly housing cost would be, including taxes and homeowners insurance. To get a feel for the maximum amount you should spend, including taxes and insurance, use MSN Real Estate's home affordability calculator. In some areas, what you'll pay for your taxes and insurance escrow can almost double your mortgage payment. According to the Insurance Information Institute, the average yearly premium can range from $477 in Utah to $1,372 for unlucky Texans. To get an idea of what you'll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate. You won't be obligated to get the insurance, but you'll have a good idea of what you'll pay if you buy. For an idea of what you'll pay in taxes, Zillow publishes property-tax information for homes all over the country. Just remember that exemptions and the intricacies of local tax law (such as Florida's Save Our Homes value cap) can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner. 4. Find out how much you'll likely pay in closing costs. The upfront cost of settling on your home shouldn't be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees. You can see what closing costs average in your state by looking at Bankrate.com's annual closing cost survey. 5. Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor. 6. Talk to reputable real-estate agents in your area about the real-estate climate. Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon? 7. Remember to look at the big picture. While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can drain your bank account. So consider whether you're ready for the expense and effort of homeownership before pulling the trigger.
 Hi,These tips are really awsome and I am agreed with the point of view of this story creator. Analysing different prices of homes in your area can give you a good idea about home prices. You can also take the help of some online real estate rent to own home sites such as Dallas TX rent to own homes where you can see the best rent to own home opportunities, their prices and other home description along with pictures. 

houseofblinds's picture
houseofblinds

Thanks a ton for sharing the tips on board, a must read for all first time home buyers, the tips would prove to be very helpful for them if they keep in mind at least some of the tips.  

emily66012's picture
emily66012

Glad you asked! Redfin has created a great Home Buying Guide that will guide you to purchasing your home.  It will walk you through the following categories: 1.  Picking An Agent2.  Finding The Right Home3.  Viewing Homes4.  Mortgages5.  Making An Offer6.  Closing The Deal If you have any questions you can also contact me directly, and I would love to help you.

Amith's picture
Amith

Great post ! thanks for the valuable information..Regards

JJInfra's picture
JJInfra

Good nice share , thank you..

HazelJosephine's picture
HazelJosephine

For selling a thing faster, the representation of the thing should be at its best same in the context to home. To sell a home faster the outlook of the home should be perfect, properly furnished and in appropriate area. To avoid the risk of loss evaluate property from expert he will provide you the best value you can get for the property.

ChalmersAbrams's picture
ChalmersAbrams

To safeguard from the forgery of the market, new buyer should be aware of the current market values and the terms. The terms related to market never changes like fashion but it is beneficial for the new buyer or seller of the house to acquire the complete knowledge about home building ,construction policies ,and current property rates so that he can safe himself from cheat and loss of money.

Gonzalo's picture
Gonzalo

HI,Thank you for sharing the great tips for us.That tips are really helpful especially for us who are first time home buyers, and still learning about investments.

tenantfile's picture
tenantfile

Buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and there's no landlord to turn to.One more tip for home buyers is check the selling prices of comparable homes in your area.Find out what your total monthly housing cost would be, including taxes and homeowners insurance.

thisdustyhouse's picture
thisdustyhouse

 Just to add one tip, Talk to the neighbours. They seem to know everything about the house and what has happened to it. I know this because we just bought a new place and it would have been nice knowing some of the things I now know.

lar789's picture
lar789

Thank you for sharing some of your tips..., that tips are really helpful, especially for us who are first time home buyers.., and still learning about investments.>!thank you..!

Estate07's picture
Estate07

Hi Andrew,
You shared with us really very Excellent tips. This tips are really very helpful for those people who buyer a house a first-time.
Thanks once again for this Important tips.

characteredu's picture
characteredu

Nice tips. I would like to thanks you for sharing. I 'll try to act upon these tips. I think these tips will prove to be very useful for me.

Nestor_Kelebay's picture
Nestor_Kelebay

Grace:

I own a small apartment block and have spent the past 20 years repairing, managing and renovating it.

About two years ago now, a guy I know to have had absolutely no experience in home repairs and renovations came to me wanting to know what things he could do to increase the value of his house prior to selling it. He was thinking he was going to build a deck himself and install new hardwood flooring and ceramic tile and the whole 9 yards. All by himself, relying completely on beginner's luck and advice from the nice men in orange aprons at Home Depot.

I told the guy he'd probably be best off just cleaning the house and painting the inside and outside of it. And, he didn't like that answer.

I explained my thinking as follows:

He wants to do all this work and expects it's going to result in a big payday when he sells his house, but it very well might not. That's because the buyer might not be willing to give a beginner the benefit of the doubt that all the work was done properly and would last as long as it should be expected to. People do buy things entirely on their appearance, but that's because someone who doesn't know any more about it has little to go on except appearance. When a house is built by a company that builds houses, the customer assumes that it was built properly, but no customer is going to do that in a house that was renovated by the owner.

So, by spending all the money on materials, and investing his time, all he may do is cause a greater difference in expectations between the buyer and seller on what the price should be. He's going to be expecting the deck is going to add $15,000 to the price of the house, and the buyer is wondering if he's going to have to spend $15,000 to make it safe to stand on.

I think I hurt the guy's feelings by even suggesting that there's a learning curve associated with doing home renovations that he needs to climb before expecting that people are going to pay extra for the work he did in his house. He didn't want to accept that opinion.

What would you have said? I expect that having the house properly inspected before the sale would reveal how well those renovations were done, and that might cool the heals of my friend. Still, no one is going to start tearing open walls to see how they were built, like in a bathroom ceramic tiled wall, so the inspector is going to be limited in what he can and can't inspect.

Angie1313's picture
Angie1313

Great tips! I think every first time home buyer should be aware of some if not all of these. I remember how overwhelming it was when I was first looking for a home. I wish I had some help instead of trial and error.

Jennabutala's picture
Jennabutala

Hello Grace

nice tips, i will keep them in my mind next time, thanks for sharing them on the board

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