Approximately 32% of homes sold above the asking price in March of 2021. This demonstrates how competition to buy a house has been at an all-time high since the start of the pandemic. This makes finding the perfect home especially challenging.
In order to find a home for a first-time homebuyer, you have to understand what you want and how to get it. Continue reading to learn how to find the perfect house as quickly as possible.
1. Decide if You’re Ready
While there’s no such thing as the perfect time to find the perfect house, there are better times than others. That’s why you should take the time to decide if you’re truly ready to buy a house.
As a first-time homebuyer, the process to find a house, especially the perfect house, is daunting. Plus, you’ll be taking on a huge financial burden.
Understand the Process
Dealing with house-hunting, loans, and inspections is a lot, but it’s important to understand how the entire process works from start to finish. You don’t want to miss a crucial step when buying your dream house only to lose it.
Talk With Your Partner (if You Have One)
If you’re buying a house with another person or partner, you should both sit down and discuss the details below. This will help you decide if you’re ready to take concrete steps toward finding a new home.
Be Ready to Commit
The average mortgage length is 30 years, so be sure you’re prepared to stick around for at least that long. If you aren’t sure whether you love the area you’re house hunting in, then you should consider holding off.
While you can sell a house with a mortgage, you may be subjected to prepayment penalties. If you’re not sure if you’ll need to move before paying off the mortgage, you may want to discuss the consequences with a lender beforehand.
2. Do Your Research
A first-time homebuyer may assume they know what they want and what they can afford when it comes to buying a house. However, you need to do your research ahead of time to understand the current status of the housing market.
You might be surprised by small details you didn’t factor in or that a house in one area of interest is significantly higher than a similar house in another area of interest. You’ll be able to set realistic expectations if you spend time researching in advance.
3. Create a Wish List for the Perfect Home
Creating a wish list is an important aspect of househunting for a first-time homebuyer who wants to find the perfect home. While you might be inclined to think, ‘I’ll know it when I see it,’ having some wish list items can make the process easier.
The benefit of creating a wish list is that it can be done at almost any point. Maybe you loved having a big backyard growing up and want that in your own house. Maybe you hate how small your apartment sink is.
Whatever your preferences, write them down on your wish list. Then, you can reference your wish list during the househunting process.
4. What the Perfect House Must-Have
If you want to find a house you’ll be happy with, it’s a good idea to categorize your wish list. The first category should include features that your perfect home must have. These should be your non-negotiables.
Be Reasonable
It’s important to be reasonable with this list. No house is going to be without its flaws, especially if you have a must-have list that’s a mile long. You should only include features that you can’t change (or are difficult to change) once you own the house.
Some home features such as a certain cabinet style, wall colors, or even a type of flooring tile don’t belong on this list. These are things you can change later and aren’t worth passing on an otherwise great home.
What to Include
Instead, include should be things that directly affect your daily life. Examples include things like square footage, yard size, and the number of bedrooms/bathrooms. These are difficult to change without a serious remodel.
5. What You Want but Can Live Without
Just because we told you to leave something off of your must-have list doesn’t mean that you shouldn’t factor them in. The next category for your wish list is the home features you want but could live without.
You can get pretty creative with this list and even organize it by importance. This can include things you can change but may not want to. You may have a preference for a certain type of flooring or bathtub size, both of which are perfect for this category.
Don’t Miss Out but Don’t Settle Either
While missing a few small features shouldn’t cause you to miss out on a great home, you also shouldn’t stick too closely to these common guidelines.
Even though these guidelines are intended to help you, your dream house is yours to choose. If you want to hold out for a house with the exact countertops you want, then do so. Just remember it may take longer to find what you’re looking for.
6. Deciding Factors
The next category we recommend adding to your wish list are features that affect your final decision. Let’s say you’re comparing two very similar properties in the Triangle real estate area. It can be difficult to make a decision.
Creating a list of deciding factors can help push you toward one property over another. To do this, create a list of factors such as good neighborhoods, commute times, and safety records. Then, determine which features are the most important to you.
7. Create a List of Deal-Breakers
The final wish list category should be a list of deal-breakers. This is especially important if you’re buying the house with another person or partner. If you have personal deal-breakers, you should discuss this as a team.
This can help prevent one person from getting too attached to a certain property that the other person can’t stand. It can also help narrow your search.
8. Determine Your Budget
Creating a budget as a first-time homebuyer can be daunting because there is a lot to consider. One method you should consider is the 28% rule. This rule states your monthly mortgage shouldn’t be more than 28% of your gross monthly income.
However, you also have to factor in your debt-to-income ratio. The amount of money you spend on other financial obligations such as credit card debt and car loans counts against the 28% rule.
Understanding the Pre-Approval Process
The pre-approval process helps you understand what you can really afford once all of your financial obligations are factored in. It also gives you a better opportunity to discuss your financing options with a lender.
It’s important to understand that the pre-approval process requires a credit check. Since the credit check is so thorough, it can impact your credit score since it shows your intention to make a large purchase.
Benefits of the Pre-Approval Process
One of the main benefits of the pre-approval process is that it narrows down the search to find a home. You have a better idea of what you can afford and get approved for.
Plus, having the pre-approval means the sellers will take you more seriously. They don’t have to worry as much about whether you can get financing for the property.
It also helps move the sale more quickly when you have a pre-approval. The pre-approval process requires all of your financial documentation. Having this already organized means the lender can make a decision faster.
9. Consider the Future
If you want to find your dream home, you can’t just factor in your wants and needs at the present moment since people’s needs grow and change over time. While you may not know how your future will play out, you can make some educated guesses.
Number of Occupants
One of our first recommendations in considering the future is how many occupants you expect to live with you at any one time. For many people, this includes considering whether children or roommates will play a role.
Those that don’t have or want children should factor in the space needed for pets or elderly parents. This could mean a large backyard for multiple dogs or a mother-in-law-style apartment.
If you may be living with multiple people, consider the number of bedrooms and bathrooms you need. Even if you don’t have immediate plans for additional occupants, you can use the space for other reasons in the meantime.
10. Consider Renovation
If money is tight, but you’re determined to find your dream house, then consider buying a home to renovate. Buying a fixer-upper home can save you money and give you more creative freedom.
These types of homes can include abandoned homes and foreclosed homes. It’s common for these types of properties to need repairs and replacement. However, if you enjoy DIY, this can be a fun project to get the house exactly how you want it.
11. Take the Home Inspection Seriously
Don’t confuse a home inspection with a home appraisal. An appraisal determines the overall value of the house while a home inspection determines the condition of the house.
Many homebuyers request a home inspection contingency, which means you have a certain amount of time to have an inspection performed on the property.
Choose a Reputable Inspector
We recommend finding a reputable inspector to complete the inspection. Those with extensive knowledge can help determine you’re getting your money’s worth from the property.
Start by checking for review and experience. Ideally, your inspector has a lot of good reviews and years of experience. However, quality work can substitute for a lack of experience.
Create a Checklist
Keep in mind that your inspector is the expert. They know what they’re looking for and where to look. However, creating a list of possible concerns for them to reference can still be helpful.
Once they’re done with the inspection, they’ll provide a detailed report of every problem small or large. This can make for a long list of potential repairs, but this is common and it doesn’t mean you’re buying a dump.
Negotiate
Once you’ve had a chance to review the list of problems from your inspector, you can give a copy to the selling party. This is a great way to negotiate the price of the property or to ask for repairs before closing.
Be Reasonable
However, don’t be nit-picky. You should tally up the potential cost of repairs for every single problem on the list. All houses will have some minor damages from daily wear and tear.
This doesn’t mean a homeowner should (or would) pay for all of these problems. Instead, you should stick to major problems such as plumbing issues, mold, or damaged roof shingles.
You should also be aware of the current market. If houses are selling quickly and you’re asking for too much, a homeowner may pass on your offer. If this is the market is more aggressive than usual, consider whether or not the problem is worth missing out on the property.
12. Make an Offer Quickly
Once you find a house that is your dream home, don’t wait to make an offer. Finding what you want is hard enough without competition. Especially in the current real estate market, houses sell quickly and you could miss your shot.
However, be sure to know what you want and how much you’re willing to pay for it. Have everything ready just in case you decide to make an offer on a property. This will make the buying process quicker and easier for all parties involved.
Find the Perfect Home
Use the above steps to find a home that is your perfect home. A lot of buying a house is understanding what you want and what you can spend. Once you figure this out, you have to move quickly to get what you want.
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