Top 10 First Time Home Buyer Tips

I’m sure you’ve seen plenty of “top #,” “best #,” “tips,” articles about buying a home. Many of them are focused on the first time homebuyer simply because the perception is that you will need more help than someone who has bought and sold homes in their lifetime. The great thing about the Internet is that you can do a ton of research and find many of these “top” type articles to build a powerhouse of knowledge. But, is it useful knowledge?

The massive amount of free content on the Internet is in large part due to the desire of businesses to attract customers, so they create free content to draw them to their websites. I’m not saying that you can’t trust or use a lot of this content, only that you need to be selective, as much of it has an agenda in mind. An example might be a real estate agent website. The focus of the content there is educational, but definitely from the perspective of it’s almost always a good time to buy a home.

A lot of real estate content out there is on sites that really want to spur home buying, whether they’re real estate sites, mortgage sites, or even home improvement websites. Again, you’ll find

lots of useful information, but sometimes you may want a little “devil’s advocate” coverage as well. I’m not necessarily taking that stance here, but my top 10 tips for the new home buyer are more focused on making decisions that even include whether to buy or not, as well as where and when. So, let’s get to it.

1. Are you sure it’s the right time for you to buy? – This one is mostly about your family and employment situation. If you purchase a home today, you’ll likely not break even in a sale for at least five years, more likely approaching eight. Be as sure as you can that you’ll be able and want to stay in the area for at least that long.

2. Can you afford what you may need in two to five years? – If you’re starting a family, don’t buy a small starter home and then end up forced into cramped quarters later or a sale before you have recouped your costs of ownership and sale. Plan ahead, and don’t buy a one bedroom or loft situation when you may need another bedroom or even a work-at-home office in a couple of years.

3. Be careful with real estate agent recommendations. – Real estate agents work hard for referrals, as they are the very best source of business. People trust their friends and family when it comes to recommendations like this. However, your Uncle Fred who has purchased and sold several homes may not be the best source for a real estate agent recommendation. You want one who likes to work with first time buyers and does a good job for them.

4. Use a dedicated buyer agency if you can. – Most real estate brokerages work with both buyers and sellers. They take listings. They also double their commission if they sell you a home they have listed. If you can find a dedicated buyer brokerage that doesn’t take listings, you’ll not have an agent with a possible conflict of interest. If you must work with a regular brokerage, don’t let them focus mostly on showing you only their listings.

5. Avoid signing a representation agreement or get a cancel clause. – Some agents want to work only with buyers who sign up front to only work with them. In other words, you agree that no matter how you find a home, you will use them as your agent and they will get a commission. If you do decide to sign one of these, make it consumer friendly with a clause that allows you to cancel it if you aren’t happy with the service.

6. Remember who the boss is. – Sure, you want advice and help from your real estate agent, as they’re supposed to be the local market expert. However, they need to listen to your desires and requirements and show you only homes that are in line with your needs. They’re not, even though many may try to be, a sales person whose job is to get your signature on the bottom line for whatever property they can.

7. Read and understand EVERYTHING. – You’re going to be handed a lot of documents. From title insurance binders to surveys, you will get hundreds of pages of them. Don’t let anyone tell you that it’s just boilerplate stuff without at least a cursory glance at every page. Sure, your title insurance binder will have exceptions for old land grants or other things that can’t be changed and don’t really mean much to you now. But, it will also have subdivision restrictions and covenants. You don’t want to buy a home and find out that you’re not even allowed to put your boat in the garage and leave your car in the driveway.

8. Definitely do the walkthrough. – Even if it’s a brand new home, you want to do a walkthrough in the one or two days prior to closing. No surprises is the goal after closing when you get the keys.

9. Don’t expect perfection in an existing home inspection report. – Not one out of a hundred homeowners stay totally on top of regular maintenance. There will be problems in the inspection report. Depending on the price you negotiated and the seller’s situation, you may not be able to get them to fix everything. The lender may require some problems be fixed, but if they don’t you may just have to deal with them later.

10. Don’t expect great things from a home warranty policy. – A lot of buyers are very happy to hear that the homeowner is paying for a homeowner warranty policy for them. Yes, you can get some major appliances fixed or replaced under their coverage, but expect hefty deductibles and service call fees from many as well. Read the fine print.

There you go, my tips that probably aren’t in many of the articles you’re reading. Just put them into yor research pile and make better decisions.