Tips for New Home Buyers: I Learned The Hard Way

By MyVine | September 16, 2011

Shopping for a new home can be a daunting task, even for someone who has owned several properties. Anyone who has recently purchase a home will tell you that there are many voices and many varying opinions out there. You had to learn a lot on our own, but at least now you probably feel comfortable and knowledgeable about the whole process.

I recently purchased a new home. Here are some useful suggestions we picked up along the way:

1. Use all of the online sources offered. Almost every state and local government has a web site where you can research real property information. The data on home sales, property taxes, and neighborhoods is invaluable when you are shopping for a home. By finding out the recent real estate prices on these sites, we were not at the mercy of the data given to us by the real estate agent. Doing the research yourself will make you more knowledgeable about the market, which is key to making a good purchase.

2. Sit down before you go looking and determine how much you can afford to spend on a new house. Try to buy a home in a price range that allows you to put down 20%. If you put down less than this, you will have to pay PMI (private mortgage insurance) to protect the lender in case you default on the loan. I know that 20% is a lot, but it’s not unrealistic. You may well not be capable to do it on your first house, but hopefully you can on your second home. On your second home purchase, you will use the principle from your existing house to fund the deposit on the new home. You may, nevertheless, want to put some of the profits from your house sale away to cover unexpected moving expenses. We recommend that you do the same.

3. A good time to go shopping for a new home is during the winter season. Around the holidays is even better. Throughout the winter holidays, most individuals are not interested in purchasing a house. You will be one of the handful of buyers out there. We purchased our home right before Christmas time, and it was certainly a buyers market. Even in one of the hottest real estate markets in the country, we were able to under bid the asking price for several homes we looked at.

4. Use a smaller mortgage firm that can offer personal service. The large, well known national firms are typically the first types individuals call because the names are familiar. If you are searching for better assistance and better interest rates, then you can’t beat the smaller sized regional companies. Since they don’t advertise and instead rely on word-of-mouth, they have to be good in order to get your service. We started off with a big-name firm, but in the long run, we went with a regional company because they had better interest rates as well as much better customer service.

5. A home inspection is a MUST. In a difficult real estate market, it is tempting to skip the house inspection. It can be easy to purchase your dream house at a fire-sale price and neglect the inspection. It is not unusual to hear of folks who have waived the inspection so they could snap up a good deal. You expose yourself to many problems that could cost you thousands of dollars if you neglect the inspection. As a final note, try to remember that buying a home doesn’t have to be scary. The negative are far out weighed by the benefits of owning your own home. If you follow the advice above, then you should be well-equipped to make it through unscathed.

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Topics: Buying Tips, Financing, General, Investing, Selling Tips | Comments Off

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