First time buyer faq: a guide for new homeowners
Buying a home is one of the biggest decisions you will make in your life. This is why choosing a property should not be taken lightly. However, for a first-time home buyer, the experience can get quite overwhelming.
One surefire way to ensure the process is not too much for a new buyer is to be properly educated and well prepared for the road ahead. To do that, you need to ask the right questions to the seller or real estate agent. Below is a list of first time buyer FAQ.
AM I READY TO BUY A HOUSE?
The answer to this first time buyer FAQ depends on your financial status and lifestyle. To determine if you’re ready to own a brand new house, first, you need to look at your savings and expenses. Do you have emergency savings that can cover three to six months of your expenses? Apart from food allowance, also take into consideration your student debt, utilities, entertainment, usual activities and other items that require spending. If you’ve calculated your monthly budget and you have enough to cover up to 6 months without worries, then you might be ready to buy your very own house.
DO RENT-TO-OWN PROPERTIES EXIST?
While these are incredibly hard to find, they really do exist. However, if you choose this option, you should expect a higher downpayment and higher interest rate, which can be higher than a lender’s offer. More often than not, you will be better off with bank financing or lender since the terms are more favourable.
WHAT IS A SHORT SALE?
Before you rush and get yourself involved with a short sale, you must know what it is and what to expect. In layman’s terms, it happens when property sale proceeds are less than the debts secured by liens and the owner cannot pay the liens in full.
There are a few things to consider in a short sale. Some of these are the time it takes for a short sale response, the possibility of foreclosure, and the unpleasant condition of most short sale properties. Buying short sale properties is possible. However, it takes a great deal of patience, so you must not rush it.
WHAT IS A FORECLOSURE?
You may not know it, but foreclosed properties are easier to buy than those in a short sale. Foreclosure is sometimes called an REO, or the property owned by a lender. If you’re buying a foreclosed property, keep in mind that most of them are sold as-is.
HOW IS THE NEIGHBOURHOOD?
The neighbourhood is as vital as the property itself and should not be overlooked. Depending on the area, there are certain factors that might affect your daily life. Some of these include the crime statistics, status of the local economy, taxes, and local amenities. If you have a top-notch real estate broker to assist you in buying a home, you would most likely receive all of the essential information to help you make an educated final decision.
HOW ARE THE SCHOOLS?
If you have children, you need to ask about the schools or universities as well. Keep in mind that the better the schools, the higher the property value. Speak with your agent to determine whether or not the schools are ideal for you.
WHAT ARE THE AVERAGE UTILITY BILLS?
Apart from the monthly mortgage payment, utility bills should also be carefully considered. You can obtain the average utility cost from the previous owner. In other instances, the local utility company also provides the information for the last 12 months. But since not all people have the same preference in home temperature, your future bill may become lower or higher than the previous average cost.
DO I NEED A REALTOR WHEN BUYING A HOME?
There are many good reasons why you need a realtor when buying your home for the first time. For one, they make the house buying process easier. Second, they can efficiently help you find the perfect property for your needs and lifestyle. However, not all real estate agents are the same. When selecting an agent, make sure they are well-rounded in the area and have a good track record in the industry.
WHO PAYS THE REALTOR FEES WHEN BUYING A HOME?
The seller shoulders these fees, usually at the settlement table, where they subtract the payment from the proceeds of the home sale.
These are just some important first time buyer FAQ and answers to bear in mind when finding a new home for you and your family. Since a home is a huge investment, it is wise to exert as much effort as you can by asking these questions to your realtor and doing in-depth research on the property you are considering.