Buying your first home can be a tricky endeavor, especially since you’re not entirely sure what exactly you’re getting yourself into. Everyone seems to have different ideas about where the market is headed and what you should do to get the best deal. You might not be able to avoid some mistakes when buying your first home, but it’s possible for you to keep them to a minimum.
Don’t put all your trust on your real estate agent’s house inspector. Buying a home is a huge investment and an accurate home inspection can keep you from getting a bad house. It’s best to ask for referrals from other buyers and interviewing at least three before hiring your home inspector.
Set limits on how much you want to borrow and how you intend to pay for it. Limit your housing costs to about 25% of your gross income.
Investigate the neighborhood and observe the activity in the area during the day and late afternoon. You’ll discover good and bad things about it – that it’s a popular shortcut during rush hour, for instance. Talk to your neighbors and ask them what they like or what they don’t like about the neighborhood.
Do be cautious about signs that indicate the market in the area is weakening. Usually this is when the properties stay in the market longer or when there’s a large discrepancy between the cost of renting and the cost of owning. If you’re financially capable of purchasing a home, however, don’t let your fears or uncertainties get the better of you. Don’t put off your purchase for years because the prices in the future will be higher than the rates today.