Buying your first home is an extremely daunting task full of blind corners and potential pitfalls, but think about the light at the end of the tunnel for a moment..
- The money you spend goes towards something you actually own
- Properties are an investment and can earn you more money down the road
- You can finally move out of your parents house
The reasons to buy a home are obviously there, but I’m not here to convince you of why you should be buying. Rather, I want to walk you through the initial process that I took when buying my first home. Often times getting started is the hardest part, so here are a few key steps I took to put me on the path to success.
Self Guided Research
Reading articles (like this one!) is the most fundamental place to start because you will immediately be exposed to a wide variety of opinions- some legitimate and others not so much. Start taking notes, not everything will make sense right away but by writing them down (or if you’re like me, typing them down) you will begin to immerse yourself in the property owners world. Law of attraction! One thing you will immediately find is the plethora of new vocabulary. Here are just a few terms that you will come across:
- Single family home: a free standing residential building, as opposed to a condominium or duplex (shared)
- HOA: Homeowners Association, they provided general rules for the property
- Enjoyment: An owners rights to possess and use their property without disturbance
If you did not know that definition of “enjoyment” in the context of property law, then you’re not alone. I was pretty embarrassed when a realtor I was meeting with mentioned it, and I casually responded with yes, of course I will enjoy having my own home..There are plenty of great resources online, start searching today.
Take a Home Buyers Course
I don’t work for Redfin, but I will say that their first time home buyers course is very helpful. We met at a restaurant in town (free food) with a group of about 20–30 people and sat through a presentation that covered the entire home buying process. All those terms I had learned from my own research made understanding the presentation way easier. Plus I looked really, really cool when I asked the presenter if down payments greater than 15% on FHA loans release me from needing mortgage insurance. You can see upcoming events in your area on the Redfin website.
The presenters were active realtors/lenders with years of experience and our group had the opportunity to pick their brains for all that sweet, juicy real-estate knowledge.
Meet with Lenders and Realtors
This is really where things start getting serious. Until now you’ve just been gathering data, feeling out the general temperature of the home buying world and setting up mental checkpoints for what to expect on the horizon. Now, you need to secure the team you will be working with and evaluating your specific case. There are two key individuals you will be working with:
- Realtor: the person that will correspond on your behalf with the seller, lender, city (for deeds, etc) and procure all documentation for you to review and sign. Realtors do not review your financial situations, in fact the only finances they work with is the selling price of the home and the underwritten, approved loan amount you recieve from your lender.
- Lender: the person that will deep dive into your financials and, after a careful review and underwriting process, present you with a loan package that you qualify for. Your lender is someone who you need to feel comfortable with, as you will be working with them for quite some time!
As you can tell, these two individuals are critical to your home buying experience- with great power comes great responsibility. Finding a realtor and lender that you have a relationship with is an absolute must. With the amount of hoops that have to be jumped through, it is very easy for a “bad” realtor or lender to act without your best interest in mind. The best way to avoid a toxic situation is to meet with multiple realtors/lenders before choosing one to move forward with.
The biggest thing that I look for is transparency. As someone who works in tech, I am highly detail oriented, and am not comfortably satisfied until I fully understand the task at hand. Realtors and lenders should always be patient and help you work through your uncertainties. If they don’t, I strongly suggest looking for someone else to work with.
Purchasing a home is a huge financial undertaking. The better equipped you are to understand what’s happening, the less likely you will find yourself in a risky situation. I am currently in the lender/realtor choosing phase, sitting down with multiple people each week to find the best relationship to move forward with. Soon, I will be onto the next phase of the home buying process and will be sure to write another article about it.
Tagged in : Real EstateMillenial
Originally published at millennialmoderator.com.