13 Things Every First-Time Homebuyer Should Know

First-time home buyer, Norman home buying, Find a home in Norman

Looking back, the best decision is always apparent, but during the moment it’s hard to know if you are making the right choice.

It would be nice if you could travel back and forth through time to avoid mistakes and snatch up those missed opportunities. Since we haven’t figured out time travel yet, the best strategy is to look toward others who have been in your situation in the past and heed their advice.

If you are a first-time home buyer, the good news is there are many people (including us!) ready to tell you everything they wish they would have known before they took the plunge into home ownership.

 

1. Be realistic on the home style, size and location

A little too much HGTV could certainly affect the expectations you set for your home. Before you go to your very first showing, it is important to take time to reflect on what you absolutely need and then what you may want.

Consider your budget when you’re thinking about the size of the house, which also includes determining the average monthly utility costs, annual taxes and insurance rates. Style and location can also change the price. In some cities, you may be able to afford a larger house or a newer model in comparison to other areas.

The important thing is to ask yourself “what matters most to me?” Do you want a short commute or more land? Whatever you decide, make sure you stay realistic with your must-haves and wants.

 

2. Research available grants in your town and state.

If you are in Oklahoma, the state and some cities have available grants for first-time home buyers. There are also grants for renovations and down payments. Do your research, look for opportunities you qualify for and check out our guide to Oklahoma grants

 

3. Save for a down payment.

There are homes with a low down payment option (as low as 3.5%) through FHA loans. However, if you can’t make the recommended 20% down payment, you have to pay for additional insurance on the loan. A conventional loan will drop the insurance after you pay 20% of the principal, but an FHA loan will leave the insurance on for the life of the loan, which will ultimately cost you more in the long run. It is best to start saving now, even if you won’t be in the market for a few more years. It will help you to start with some equity in your new home.

 

4. Leave yourself breathing room in the budget.

Are you qualified for a $200,000 home loan? Don’t buy a $200,000 house. You will pull your hair out stressing about any surprise problems because you maxed out your available credit and depleted your savings on a $40,000 down payment on the home. Furthermore, the max limit purchase may be too much to handle on a monthly basis if there are any job transitions or life emergencies.

 

5. Keep detailed notes, photos and videos of every property you truly like.

Finally, you're out looking at homes and dreaming about the future, but there will be a lot of homes over the course of several months. Don’t depend on your memory to keep track of what you like. Take plenty photos and rate every property on a scale of 1 to 10. The homes you really love, use your smartphone to create your own personal video.

 

6. Know how to check building plans and zoning ordinances.

Are they planning on building a convenience store behind your prospective house? Are there plans for a future turnpike to run through your backyard? Sellers don’t always have to disclose future problems because anything could change the plans and reroute the road or stop the construction. Go to city hall, and look up the zoning ordinances for your home and several miles around your home.

Commercial encroachment is when businesses start making their way into a traditionally residential area. When city councils approve a zoning change, one thing they consider is the zoning of nearby properties. If you're surrounded by residential for several miles, it is unlikely a business, like a paint manufacturer, will show up in your backyard.

However, if you notice there are several manufacturers within a couple miles of your house (or within the same block), you should see if there are aging structures nearby. The company might look to expand by purchasing an old dilapidated building and tearing it down. Before you know it, your home is surrounded by loud noise or maybe weird smells.

Be proactive by looking at state highways and plans for future road development, and visiting the city and county planning commission (and maybe go to a meeting or two).

 

7. Look up school districts and crime rates.

If you are near a school, it doesn’t matter if you do or don’t have kids, the district will affect home values. Oklahoma provides a grade for each school in the state. Look up the nearby school and see how it compares to other schools in the area.

Check the local crime rates with sites like SpotCrime.com, Crimereports.com or Familywatchdog.com.  

Drive by the property at different times and on different days. Do you feel comfortable? If not keep looking. Don’t wait until you move to learn at night the area is a little more sketchy than you’re comfortable with.

 

8. Don’t be afraid to dream about the home’s potential after a little elbow grease.

Was the house perfect except the hot pink bedroom with a zebra stripe border, outdated fixtures and a lime green kitchen? Don’t be afraid of working with a property in your prime location and price even if it needs a bit of sweat equity.

Walls can always be painted, light bulbs can always be changed, but the structure, the foundation and the layout are the most important features you should love.

 

9. Give yourself a realistic renovation budget.

You decide to buy a “fixer-upper.” You have the imagination to see what a property could be and not its current condition. However, don’t underestimate how much time and more importantly, money will be needed to make your vision come true.

Consult with a contractor and get an expert opinion about the potential costs associated with the types of renovations you need to do to get the home up to your expectations.

If you are planning on doing a lot of work, it is more important you stay well below your approved credit.

 

10. Check everything (and we mean everything).

What should you check before you sign the dotted line? Everything, literally everything. If the inspector finds a problem, look deeper to make sure the issue isn’t a symptom of an even bigger problem.

We have a list of things you should definitely look at while at a showing.  Otherwise, there is no such thing as being too careful in looking at your home.

 

11. Don’t constantly lowball the sellers.

Don’t make the mistake of offering the seller an insultingly low number for their home especially in a seller’s market. Your agent should do a comparative market analysis to tell what the right offer should be for the property. Your main goal when it is time to put down an offer is to just be reasonable. You want to buy and they won't sell, so there will be some give and take on both sides.

 

12. Stop being picky

Yes, buying a home is a huge decision. It’s a massive commitment, but if you are looking for the perfect house, in the perfect location that doesn’t need any renovations or modifications to fit your style and personality, then you are going to struggle.

Offer some wiggle room on mild imperfections, and don’t get caught up in the process waiting for “the one.”  Eventually, you will just have to make a decision and take the plunge.

 

13. Don’t make any major purchases or life decisions after an offer is accepted

Great, the buyer accepted the offer! Don’t go purchase a new car, quit your job or make any other large investments. You don’t want the lender to lower your qualification down below the purchase price.It doesn’t mean you can’t make those decisions at a later date, it just means it’s not the best idea after an offer is accepted.

Now you know, what most first-time buyers should know. Ready to look at some homes? Give us a call to schedule a day for showings at 405.310.2796.