The process of buying a home can be a bit daunting if you have never done it before. This is why it helps to know the following tips that will help you buy your very first home.
Get Pre-Approved For A Loan
Once you're ready to start looking at homes, it will help to get pre-approved for a mortgage with a local lender. The pre-approval process is different from the pre-qualification process. While pre-qualification will give you a general idea of what kind of loan you can get for a home, it is done with estimates based on what you tell your mortgage lender. Pre-approval requires submitting documentations to prove your income and will provide a letter from the lender that you can show to a seller if they have doubts about you being able to get a mortgage.
Understand Buyers And Sellers Markets
It is important to understand real estate trends in your area and what it means to be either a buyer's or seller's market. A buyer's market will favor the home buyer, with there being plenty of homes for sale but not many interested buyers. This means you are more likely to negotiate a price below the list price and not deal with much competition when making an offer. A seller's market is the complete opposite, where there are more buyers looking for a home than the number of homes for sale. This can lead to multiple offers being made on a single home and the seller getting to pick which one they want to go with. Your real estate agent can help let you know what kind of market it is in your area.
Know When You Can Back Out Of An Offer
When you make an offer on a home, you'll need to give earnest money to the seller to show that you are truly interested in buying the property. However, know that the earnest money is not gone forever. There are several points in the process where you can back out of the sale and not lose your deposit. Some common areas where you can back out are if the home inspection comes back with information that you were not aware of when you made the offer, if your mortgage is not approved, or if the appraisal comes in low. Your contract should have verbiage that allows you to back out if there are problems at any of these steps.
For help looking for a new home, contact a real estate agent in your area.Share